Looks like just another writer who either doesn’t know the difference between a commercial bank and an investment bank or ignores the difference because it would spoil his argument.
The CRA applied only to deposit taker banks. Banks and S&Ls that offer checking and savings accounts, that are covered by FDIC, that are regulated by the Fed and some offices of the Treasury.
It did not apply to investment banks, hedge funds, pure mortgage lenders and any other firm that raises its money from investors. They are regulated by the SEC, when regulated at all.
Moreover the CRA did not mandate low quality loans. Banks were free to write conforming loans and if they intended to sell the paper to the GSEs they needed to do that. The CRA mandated that a percentage of loans be made in the community where a deposit taking bank was getting its deposits- the C in CRA. It didn’t require them to be mortgages. It didn’t require them to be subprime. It didn’t require them to be non-conforming.
The greatest number of loans and the most exotic and risky mortgages were written by the non-CRA shadow banks of Wall Street. That’s where the No Income No Job No Asset NINJA loans came from, and the 120% Loan to Value, No Doc and all the rest. These firms wrote high risk, high yield mortgages for their own reasons, they actively wanted and developed that market and were under no pressure or requirement to do so. It was immensely lucrative for them but they badly miscalculated the risk involved, having misled themselves by, among other things, David X Li’s Gaussian copula function aka ‘the formula that killed Wall Street’. It’s worth reading the article Wired has on that gem:
https://www.wired.com/2009/02/wp-quant/
You’re missing the point — even though it was targeted to one segment of the market it changed all of it.