Democrats To Promote More Bad Loans Under The Guise Of “Consumer Protection”
Because nothing says “consumer protection” like pressuring banks into making loans to people who have no business taking them.
Remember that subprime loans were at the heart of the financial meltdown that led to our current recession, and that all those subprime loans were the result of the government mandating and/or incentivizing their existence through regulatory pressure and manipulations through government-backed lenders Fannie Mae and Freddie Mac.
Expect to see more bad mortgages as a result of a House committee’s vote Thursday to create the so-called “Consumer Financial Protection Agency.” That agency, contrary to its deceptive name, will harm savers and consumers by forcing banks to make loans to people with bad credit, leaving banks with less money to pay interest. “The agency would be in charge of enforcing the Community Reinvestment Act, a law that prods banks to make loans in low-income communities.”
Government pressure on banks to make more risky loans in low-income neighborhoods was a key reason for the mortgage meltdown. Yet President Obama’s disturbing proposal would empower the new agency to enforce the Community Reinvestment Act without regard for banks’ financial safety and soundness. …
The mortgage crisis was also caused by the reckless government-sponsored mortgage giants (”GSEs”) Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary.
This is what happens when “social justice”, or equality of outcome, is the goal instead of equality of opportunity. For the liberals, at least per their actions, the optimal situation is for everyone to get a loan regardless of their ability to pay it back. But in reality, things like mortgages should be something individuals earn through fiscal responsibility. Remember that loans are meant to be mutually beneficial. Lendees get the capital they need for whatever investment they’re making. Lenders get interest payments. Nobody is best served by a defaulted loan, so without government interference lenders are for the most part only going to make loans to people with a high probability of paying them back.
With government interference, however, lenders are forced to also make loans to people with a low probability of paying them back. Which serves the liberals’ skewed sense of fair lending practices.
Yet outside of said skewed notions, there is also a disturbing desire for government control on display here. The federal government wants to dictate loan standards so that instead of loans being a mutually-beneficial relationship for lenders and lendees they’re something lendees are entitled to even if it isn’t a best business practice for lenders.
And when lenders take on too many bad loans under pressure from the government? They’re declared “too big to fail” by the government and they’re nationalized.
Meaning that this isn’t just about stupid notions about social justice. This is also a government power grab.
A post devoid of fact.
Congratulations
In what way, bark? I see a lot of facts here.
Still, not a reference to anything in the bill
Because they haven’t admitted to the real cause of the meltdown, which is using home loans to implement “affirmative action” fiscal policy, the cause of the problem continues.
None of the economic policies of the Dem/Libs ever work. They spend billions of dollars on programs, declare them failures and then pronounce the remedy is to spend more. We are told that the intentions are good so there is no need to review the results. It took many years for me to save and qualify to buy a home. Home ownership is not a right. This is a result of people expecting the government to give them something for nothing. There is no free lunch. If the government gives you something you can rest assured it will cost dearly.
Einstein was wrong: it’s not insanity that makes people repeat things and expect a different result, it’s stupidity. And the dems are going to show us just how fucking stupid they are, again. It would be laughable if their complete lack of understanding on economics wasn’t destroying this country. And when the next housing meltdown occurs, and the economy incinerates, the lefties won’t even be honest enough to look in the mirror and blame themselves, again.
“Ironic statement considering we just ended a 30 year period of conservatism’s domination of fiscal and economic policy.”
What you leftards lack in common sense, you make up for with your ability to say the most ignorant things without any sense of irony.
AWESOME! lets give poor people NINJA loans for big houses again! sweet!!!
Ironic statement considering we just ended a 30 year period of conservatism’s domination of fiscal and economic policy.
What you people lack in honesty and brains you more than make up for with chutzpah.
Great, they want to issue loans to low-income inner city people to do what? Buy expensive homes in the suburbs they cannot afford so they can MAYBE land a job that pays enough back in the city they moved out of?
It’s as if they are somehow magically gifted with choosing everything that will corrode and disintegrate the cities.
Cutting the taxes and offering loans to actual businesses WITHIN those cities CONTINGENT upon hiring a certain percentage of locals who would then be kicking back a portion to the city via their taxes, this never occurs to them.
Someone with an axe to grind and some money to burn has a ready made population in cities across the nation and the day is coming that the Dems in charge are going to be shown as the poverty pimps they are.
This is happening because Senators like Byron Dorgan have no idea how bank financing works. Dorgan calims the financial crisis was caused by ‘un-regulated’ banks — it was created by big government telling banks who they have to make home loans to and then having Fanny and Freddy buying these loans from banks.
This IS a factual posting that people need to understand if we are to save our country.
Yeah, poodle. Wave your hand and pretend like it’s not happening.