Kenny. The link you reffered me to talks about Gramm-Leach-Bliley Financial Services Modernization Act, which is an Act of the United States Congress which repealed part of the Glass-Steagall Act, opening up competition among banks, securities companies and insurance companies. The Glass-Steagall Act prohibited a bank from offering investment, commercial banking, and insurance services.
The bills were introduced in the Senate by Phil Gramm (R-TX) and in the House of Representatives by James Leach (R-IA). The bills were passed by a 54-44 vote along party lines with Republican support in the Senate and by a 343-86 vote in the House of Representatives. Nov 4, 1999: After passing both the Senate and House the bill was moved to a conference committee to work out the differences between the Senate and House versions. The final bill resolving the differences was passed in the Senate 90-8-1 and in the House: 362-57-15. This ‘veto proof legislation’ was signed into law by President Bill Clinton on November 12, 1999.
The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s. In 1987 the Congressional Research Service prepared a report which explored the case for preserving Glass-Steagall and the case against preserving the act.

Ain’t the internets great?

Kenny

Facts? Who cares about stinking facts?

I do which is why I’m disappointed to see Rob apparently running with the cranks on this issue. Having read this article a while back and seeing nothing that rebuts the facts contained within it, I’ve concluded that the CRA had next to nothing to do with the mortgage situation and the current credit crisis. Factors I consider much more germane include lax mortgage writing, low interest rates, the bursting of the housing bubble, unregulated derivative creation and trading, the general lack of oversight and regulation of the financial industry in general and corporate fixation on short term reward to the detriment of long term viability. Too many people took loans that they couldn’t afford, too many people assumed too much risk, too many government people looked the other way, etc. etc.

There’s lots of responsibility to go around IMO. The fingering of the CRA satisfies certain ideological demands but it doesn’t make sense in terms of the actual situation…again IMO.

My problem is that I find it hard to believe that you can be so wilfully dense on this subject, doubly so considering it’s within your field of expertise.

I know it to be true, and no amount of attempts at personal invalidation on your part will change that. I pity you your ignorance.

community organizers help to undermine the US economy by pushing the banking system into a sinkhole of bad loans. And Obama has spent years training and funding the organizers who do it.

Any bank that wants to expand or merge with another has to show it has complied with CRA – and approval can be held up by complaints filed by groups like ACORN.

In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America’s financial institutions.

In February 1990, Illinois regulators held what was believed to be the first-ever state hearing to consider blocking a thrift merger for lack of compliance with CRA. The challenge was filed by ACORN, led by Talbott. Officials of Bell Federal Savings and Loan Association, her target, complained that ACORN pressure was undermining its ability to meet strict financial requirements it was obligated to uphold and protested being boxed into an “affirmative-action lending policy.” The following years saw Talbott featured in dozens of news stories about pressuring banks into higher-risk minority loans.

IN April 1992, Talbott filed an other precedent-setting com plaint using the “community support requirements” of the 1989 savings-and-loan bailout, this time against Avondale Federal Bank for Savings. Within a month, Chicago ACORN had organized its first “bank fair” at Malcolm X College and found 16 Chicago-area financial institutions willing to participate.

The Woods Fund report makes it clear Obama was fully aware of the intimidation tactics used by ACORN’s Madeline Talbott in her pioneering efforts to force banks to suspend their usual credit standards. Yet he supported Talbott in every conceivable way. He trained her personal staff and other aspiring ACORN leaders, he consulted with her extensively, and he arranged a major boost in foundation funding for her efforts.

And, as the leader of another charity, the Chicago Annenberg Challenge, Obama channeled more funding Talbott’s way – ostensibly for education projects but surely supportive of ACORN’s overall efforts.

Now you can see with your own eyes what Robert108 posts as reasons for the failure of banks etc.

Another lie from you! That article was about the failure of Wachovia, specifically. You lie when you try to generalize to all banks.
Get help.

Et tu Rob? Blaming the CRA for this mess is nothing more than wishful thinking by cranky conservatives.

And they call liberals the dreamers.

I saw no bankers go to congress and complain concerning this, no bankers talking to the media about this

In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America’s financial institutions.

What part of intimidation tactics is unclear. Left wing zealonts have a strong record of bullying and extorting American businesses.

And Talbott continued her effort to, as she put it, drag banks “kicking and screaming” into high-risk loans. A September 1993 story in The Chicago Sun-Times presents her as the leader of an initiative in which five area financial institutions (including two of her former targets, now plainly cowed – Bell Federal Savings and Avondale Federal Savings) were “participating in a $55 million national pilot program with affordable-housing group ACORN to make mortgages for low- and moderate-income people with troubled credit histories.”

If Talbot had to drag bankers into the subprime business, they obviously were not that eager to go. Was there greed? Yes. And a lot of ass covering once bankers and brokers realized they had been bullied and tricked into buying shitty mortgages.

With groups like Acorn and La Raza using their well practiced intimidation techniques, everyone who tried to do anything about this was slapped down immedietly.

Chief. Wake up from your self induced hypnosis. You linked us to a page with someones opinion which is devoid of facts.

The truth in IMO is this:ellinas on September 29, 2008 at 04:52 pm

This is what enabled the currernt situation.

Et tu Rob? Blaming the CRA for this mess is nothing more than wishful thinking by cranky conservatives.

Facts? Who cares about stinking facts?

Blaming the CRA for the mortgage crisis is like blaming alcohol, fear, and selfishness for for Mary Jo’s death at Chappaquiddick.

Pretty much. Or blaming the blowjob for Clinton’s perjury.

I saw no bankers go to congress and complain concerning this, no bankers talking to the media about this, their lobbyists were able to convince congress and the president for the need of bankruptsy “reform” but were unable to stem this? Bullshit.

That’s so dishonest it’s not even funny.

http://www.highbeam.com/doc/1G1-54541743.html

The only bullshit is you repeatedly coming around and lying about what caused this. Article after article comes up showing the CRA as a major part of this problem and Freddie and Fanny as the rest. Yet you continue to scream “La La La, it’s all pure capitalism. La, La, La.” What crap.

Bear. And these are merely the most blatant examples that prosecutors could not overlook.

Oh hell, why not. I’m not against kicking you while you’re down, Ellinas. Exposing liars is always more fun when you can bury them in evidence they’re liars.

http://www.mibankers.com/publications/ARarchieve.asp
http://financialservices.house.gov/banking/92299ro2.htm
http://www.iibonline.org/pdfs/newsletter/2003-02/pg2.pdf
http://blj.ucdavis.edu/article.asp?id=606
http://www.nhi.org/online/issues/108/harvey.html

So not only did banks oppose it, as Bear says “kicking and screaming”, but they continued to oppose it and tried to significantly weaken it during the Clinton administration. It was big news. Unless you’ve had your head in the sand til this crisis, you’re just lying like crazy.

Again, I do hope for your sake that you’re insanely hot.

“Insanely” is the key word.

e.

sold aggressively to unsophisticated home buyers

is an opinion. Trying to make the buyer unable to comprehend what he was signing?

So you admit that the statement is The Truth.

Now to your other contention:

lending to unqualified minorities.

Do you really want to debate this?
If you do, then we will have to define a minority and what is unqualified.
I know a “little bit” about this from several sources. I know what was qualified before 1964.

The “root cause” besides the CRA and its next arm twister is the almost complete lack of personal responsibility to repay a loan. My father was VP — loans at Bankers Trust in NYC. I learned quite a bit about risk and loans. One bad one would put you out of a job. That was then. This is now. Now, banks are forced to make loans to unqualified people or face lawsuits from organizations (tax funded) such as ACORN and others. This is the root cause of our “financial crisis”
Let the chips fall where they may. We should not bail out these deadbeats.

It’s not that there were too few regulations but rather there were too many bad regulations and too many corrupt democrats who gladly turned a blind eye-wink wink nod nod-toward the asinine accounting practices of their democrat appointed redistributionist-take from the rich and give to the poor socialist banking cronies.

Kenny was debunked, you post rubbish, and Robert108 will dissown what he posted.

I wasn’t debunked. And if you have an honest bone in your body, you’ll retract such idiocy.

Which is to say..you wont.

Finally tracking down a few facts hidden in bureaucratic language like this:

“Distressed or underserved” middle-income rural areas, not just LMI rural areas, are now eligible for community development activity

Reference: roundtablepresentation1.ppt

And here from the Office of the Comptroller and Currency:

Alternatively, if a security, such as [ ]‘s security, is held, accounted for, and reported for CRA purposes by the financial institution as a loan, the institution may have it considered under the CRA regulations’ lending test.5

(the 5 being a footnote follows below)
Reference: http://www.occ.treas.gov/interp/sep97/cra798.pdf

Under the lending test,
examiners consider an institution’s originations and purchases of loans, including community development loans

Reference:
http://occ.gov/interp/may/cra723.pdf

Getting close to decoding: Section 711—
I

mportantly, section 711 applies only to written agreements that are “made
pursuant to, or in connection with, the fulfillment of the Community Reinvestment Act.”
Section 711 defines “fulfillment” of the CRA as a “list of factors” that the appropriate
agency determines have a material impact on the agency’s decision to approve or
disapprove an application for a deposit facility under the CRA or to assign a CRA
examination rating.

and now from same, (my emphasis)

The Act and proposed rule also do not apply to any specific contract or commitment for any type of loan or extension of credit to individuals, businesses, farms or other entities if the funds are loaned at rates that are not substantially below market rates and the purpose of the loan or extension of credit does not include any re-lending of the borrowed funds to third parties.

finally, the words— credit history!
For example, should the agencies provide that the
relevant market rate for a loan is the rate that would be charged on a comparable transaction (e.g., a construction loan, permanent financing, a small business loan, or an
unsecured consumer loan) with a comparable person (e.g., a person with similar financial
resources and credit history) that is not a party to the agreement?

and now we read a similar sentence (what the definition of is is !! In this case, factor!

The agencies request comment on this reading of section 711 and on whether
the list of factors properly identifies the “factors” that are material to a CRA evaluation.

Punishment for non-compliance: Ten Years.

Prohibit the individual from being a party to any covered agreement for a period not to exceed 10 years.

and all this just part of a 110 page attachment!
http://www.federalreserve.gov/boarddocs/press/boardacts/2000/200005102/attachment.pdf

US government rules of engagement. Any questions?

Activist groups such as Greenlining, ACORN, and National Council of La Raza were encouraged to agitate by the Carter-era Community Reinvestment Act, which enshrined in law a kind of lending protection racket.

Leftist political activism drove banks to make irresponsible decisions, and that now threatens to put taxpayers on the hook for bank bailout packages costing potentially trillions of dollars.

Even though the left’s pathological preoccupation with economic egalitarianism never takes a vacation, the left isn’t entirely to blame for Wall Street’s current troubles.

The Federal Reserve Board encouraged bad behavior by keeping interest rates artificially low for far too long. Since money was cheap, bankers went overboard with exotic mortgage products, and investors kept inflating the housing bubble, sending home prices into the stratosphere.

But no one can deny the fateful role that liberal financial activist groups contributed in making a bad situation much worse.

It’s too bad that time and energy must be spent to fight the results of the Power Elite’s propaganda efforts to deflect blame away from the Republican history of deregulation that has actually caused this mess we are all in:

‘Myth: The Community Reinvestment Act forced banks to make loans to all low-income families and people with poor credit, fining banks that refused to comply.’

‘Fact: The Community Reinvestment Act has encouraged banks to lend fairly and responsibly for over 30 years. The Community Reinvestment Act does not impose fines; it periodically examines FDIC-backed banks and issues them a CRA-compliance rating. [Community Reinvestment Act] To receive a high rating, banks must meet the financing needs of as many members of their community as possible and must not discriminate against racial and ethnic groups or certain neighborhoods. However, a bank cannot receive a high rating unless it is also maintaing “safe and sound banking practices.” [Community Reinvestment Act] In other words, the CRA requires banks to lend to working-class families and people of color, but only when those people have been deemed credit-worthy.’
http://www.ourfuture.org/fact-sheets-briefs/2008094029/truth-about-community-reinvestment-act

It’s not that there were too few regulations but rather there were too many bad regulations and too many corrupt democrats who gladly turned a blind eye-wink wink nod nod-toward the asinine accounting practices of their democrat appointed redistributionist-take from the rich and give to the poor socialist banking cronies.

Kenny

2. Mortgages are not all covered by federal regulation.
This is a blatant lie. ALL mortgages are covered by federal law. This leads us to our next point.

The article doesn’t say that some mortgages are exempt from federal regulation. The article says that the CRA does not apply to those institutions who wrote the majority of the sub-prime loans. I find it difficult to fault minority mortgage programs for the current crisis when most of the bad mortgages weren’t covered by programs like the CRA.

3. CRA is the problem.
NO ONE. And I do mean no one has even remotely suggested this.

Of course they have…if no one was suggesting this then I wouldn’t have typed so many words on the topic over the past few weeks.

CRA is PART of the problem.

This might be true but I have yet to see any evidence for this. I would agree that the CRA could be held responsible if it led to a significant number of mortgages which ended up in default but I would have to see evidence of that and I would have to see a number of defaults high enough to wipe out the positive impact of the loans that didn’t fail.

I’m actually quite comfortable assuming that many mortgages written under the auspices of the CRA went to high risk folks, to folks who should never have signed a mortgage and that ended up in default. I don’t question the premise that it’s not good business to lend money to people who can’t pay you back but I do question the significance of failed minority lending program mortgages within the universe of failed mortgages generally. It then follows that I can’t point a finger at those mortgages as the cause of the current situation. Even if the CRA did produce mortgages which have failed, and it undoubtedly did, the number is so small compared to all of the mortgages which have failed that the CRA’s share of the responsibility must be minimal when compared to other factors I have listed.

I appreciate your comments.

Mickey, good summary. Just like the 1964 “civil rights acts” were supposed to make people all equal. What morphed was/were quotas, preferences and affirmative action–which meant hire an incompetent person, train them and then you can not fire them because they were hired based on their skin complexion.

I have been involved and seen this disgrace in numerous organizations, most recently in a local and state health department, putting peoples’ lives at risk.

This same type thing happened to the CRA of 1977.

Before the Dem affirmative action mandates, the foreclosure rate was very low, and if it wasn’t, the loan requirements would be tightened to bring it back to a manageable level. The Dem affirmative action mandates prevented them from doing that, which has produced the inevitable result we observe today.

Do you have any insight as to the proportion of CRA mandated mortgages in default as compared to mortgage defaults in general? Provide some evidence and I’ll gladly revisit my position.

You have yet to provide any evidence that the present default rate is not significant, while claiming that.

If you’re going to claim that the CRA is responsible for the current crisis then you should expect to be asked for supporting evidence. We’ve already confirmed that the CRA was not involved in the majority of sub-prime mortgages…do you have evidence that the CRA was involved in the majority of sub-prime mortgage defaults? If yes, then I’ll reexamine my position…if not then whatever.

In fact, the default rate is higher than it was before the mandates.

That surprises no one…the high default rate is an important factor in the development of the credit crunch. If the majority of sub-prime mortgage defaults was CRA related then you might be on to something but they’re not so you’re not.

Blaming minority lending programs merely deflects responsibility away from the genuine causes that need to be addressed in order to clean up the mess and to ensure that it doesn’t happen again.

Mike: I do hope you are aware of the fact that the “conservatives” to whom Mill referred bear no resemblance to the American conservatives of today; unless you were trying for a deliberate smear, of course.

The conservatives of Mill’s time were much closer to the lefties of today, with their desire for a totalitarian central govt, with them as the ruling elite.
Today’s American conservatives are much closer to the liberals of Mill’s time; all that liberty and individual independence stuff, you know.
You do know that, don’t you?

So many people can’t wrap their heads around this entire debacle. AND the truth is not being told. We see politicians coming out behind closed doors and not being able to make decisions. We the people need to take these worthless politicians to the garbage dump. Especially the ones who Encouraged these substandard loans! So many people are asking how did we get here? AND the ones who are truly responsible are not taking the blame. They are kicking back and letting GW Bush take the blame.

ZZ and I(along with many others) stand for the truth here.
You seem to be in deep denial, Mike.

ZZ…stop encouraging him.

ZZ

We see politicians coming out behind closed doors and not being able to make decisions.

That’s because they don’t understand the problem. It is very complex, much more so than r108 et al would have you believe. It’s also one of those problems that really only has bad solutions and so the least bad solution is the one to be pursued.

Lawyers and activists from the Clinton administration brought to court forcing banks to make loans to those who did not have the ability to repay. USA Today finally exposed the scam, publishing that 44% of these type forced loans were not repaid and in default as opposed to less than 5% of normal loans to those who passed bank’s standards for loans.
Do Franklin Delano Raines and Jamie Gorelick ring any bells?

Do you honestly believe that?

I know it. How many times do I have to say the same thing? What’s your problem?

You opined that Marx was a monarchist as I recall and it’s all been downhill from there.

Here is your big problem: You reply to what you think I said, according to your prejudices, rather than what I actually said.
I said Marxism is actually a form of monarchism, with his “dictatorship of the proletariat”. It’s the same old “ruling elite/peasant structure of monarchy, dressed in drab clothing, instead of jewels and finery. For the peasants(the proletariat), it’s the same old story.

Sorry you regard the truth as “downhill”. Very revealing.

Chief: All social engineering schemes are essentially welfare. They base reward on entitlement, not achievement.

Do you have any insight as to the proportion of CRA mandated mortgages in default as compared to mortgage defaults in general? Provide some evidence and I’ll gladly revisit my position.

You have yet to provide any evidence that the present default rate is not significant, while claiming that.
Please provide evidence for your position.
How high can the default rate go without being harmful?
What was the default rate before the affirmative action mandates?
I have already asked you these questions, and you failed to answer them. Without an answer, your assertion is simply an unsupported opinion.
In fact, the default rate is higher than it was before the mandates.

It all starts with eliminating the social engineering mandates. Without that, there is no cure; only temporary relief.

Got a link for this Chief?

forcing banks to make loans to those who did not have the ability to repay. USA Today finally exposed the scam, publishing that 44% of these type forced loans were not repaid and in default

Our study concludes that CRA Banks were substantially less likely than other lenders
to make the kinds of risky home purchase loans that helped fuel the foreclosure crisis.
Specifically, our analysis shows that:
(1) CRA Banks were significantly less likely than other lenders to make a high cost loan;
(2) The average APR on high cost loans originated by CRA Banks was appreciably lower
than the average APR on high cost loans originated by other lenders;

(3) CRA Banks were more than twice as likely as other lenders to retain originated loans in
their portfolio; and

(4) Foreclosure rates were lower in MSAs with greater concentrations of bank branches.

Testimony of Federal Reserve Board Chairman Ben S. Bernanke on Subprime Mortgage Lending and Mitigating
Foreclosures, before the Committee on Financial Services, U.S. House of Representatives, September 20, 2007.

The originate-to-distribute model seems to have contributed to the loosening of
underwriting standards in 2005 and 2006. When an originator sells a mortgage
and its servicing rights, depending on the terms of the sale, , contributed to the weakening of much or all of the
risks are passed on to the loan purchaser. Thus, originators who sell loans may
have less incentive to undertake careful underwriting than if they kept the loans.
Moreover, for some originators, fees tied to loan volume made loan sales a higher
priority than loan quality. This misalignment of incentives, together with strong
investor demand for securities with high yields
underwriting standards.1

http://www.traigerlaw.com/publications/traiger_hinckley_llp_cra_foreclosure_study_1-7-08.pdf -
CRA LOANS Outperformed the Mortgage Maket