Posted on 01/20/2020 9:08:01 AM PST by karpov
The Trump administration is under fire for daring to touch a third rail of liberal financial regulation: the 1978 Community Reinvestment Act, or CRA. The proposed new regulations would affect 70 percent of banks by replacing requirements that bank lending target specific geographies or borrowers, such as low-income minorities. Instead, banks would set total dollar goals for lending to low-income borrowers, with the aim of helping poor communities broadly, rather than focusing on specific neighborhoods.
Some of these loans might have occurred anyway, and critics (which include the Federal Reserve) oppose the idea that banks could get “CRA credit” for them. But the new policy should be welcomed as an improvement for lower-income business and mortgage borrowers. Operating in a far more competitive financial-services industry than the late 1970s, lenders will better serve poor neighborhoods by treating them no differently than more affluent areas.
The CRA has become a liberal icon—and a conservative bête noire, cast as a partial accessory to the 2008 financial crisis, on the view that pressuring banks to make loans based on borrowers’ location, rather than on their creditworthiness, leads to poor underwriting practices. Regardless of how one sees the CRA’s history, the Trump administration is right to revise the law; it would be right to repeal it, too, though repeal is unlikely.
The CRA doubtless pushes banks to allocate capital in unconventional ways. For groups like the National Community Reinvestment Coalition, a defender of the law, that’s exactly the point. In their eyes, low-income minority areas are “underserved” by lenders. The New York Times echoes that view. “Banks don’t like lending in lower-income neighborhoods,” its editorial board declared, “even as they profit from deposits taken from those same communities.” Many neighborhoods, the paper continued, are “credit deserts.”
(Excerpt) Read more at city-journal.org ...
Good! Bawney Fwank and Chris Dodd should be in jail!
When the whole thing fell apart, I tried to cash in, went to AG Edwards to buy Fannie Mae and Freddie Mac, AIG at 25c the share.
They told me to go to hell.
Bet Barney and Chris made a packet.
*spit*!!
The CRA was the genesis of the 2009 housing crisis.
Fannie Mae is $3.24 a share!
I could have made a killing on the taxpayer!
Fannie Mae is $3.24 a share!
I could have made a killing on the taxpayer!
25c vs $3.24, do the math.
Now all they crow about is Apple and Googoo.
Good luck getting in at the TOP!
25c vs $3.24, do the math.
Now all they crow about is Apple and Googoo.
Good luck getting in at the TOP!
Freddie Mac $19.50 a share!
AIG, $52.90 a share!
Bastards would not let me in!
I took a day off work to buy this stock and they told me they don’t trade in this stuff.
Jayjus I hate the inside bastards
I took a day off work to buy this stock and they told me they don’t trade in this stuff.
Jayjus I hate the inside bastards
So will this be added to the list of impeachable offenses?
My sentiments exactly!
We’ll get by. *spit*
What, isn’t that right?
No is right know is not.
I'm going to remember that, so next time I'll no.
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