Curious about how we arrived arrived at this pass and whether a trillion dollars and massive government interference in our lives is going to help instead of just hurt more? If so, you’re the only ones. Our current President and his Democrat conspirators in Congress don’t seem very curious at all. If they were, they’d not prescribe poison to counteract the infection we find ourselves afflicted with today. Except these men and women aren’t dumb. They realize that the poison won’t heal. They just don’t care.
If you care (and I think that you do), check this out. There are reasons that things happen in this world. Things cause other things. Nothing happens by magic. Our current economic crisis can be explained. If we’re to fix it, we’ve got to treat the cause…and not use it as an excuse to serve narrow aspirations to Socialism.
As originally enacted in 1977, the [Community Reinvestment Act] vaguely mandated regulators to consider whether an insured bank was serving the needs of the “whole” community. For 16 years, the act was invoked rather infrequently, but 1993 marked a decisive turn in its enforcement. What changed? Substantial media and political attention was showered upon a 1992 Boston Federal Reserve Bank study of discrimination in home mortgage lending. This study concluded that, while there was no overt discrimination in banks’ allocation of mortgage funds, loan officers gave whites preferential treatment. The methodology of the study has since been questioned, but at the time it was highly influential with regulators and members of the incoming Clinton administration; in 1993, bank regulators initiated a major effort to reform the CRA regulations.
In 1995, the regulators created new rules that sought to establish objective criteria for determining whether a bank was meeting CRA standards. Examiners no longer had the discretion they once had. For banks, simply proving that they were looking for qualified buyers wasn’t enough. Banks now had to show that they had actually made a requisite number of loans to low- and moderate-income (LMI) borrowers. The new regulations also required the use of “innovative or flexible” lending practices to address credit needs of LMI borrowers and neighborhoods. Thus, a law that was originally intended to encourage banks to use safe and sound practices in lending now required them to be “innovative” and “flexible.” In other words, it called for the relaxation of lending standards, and it was the bank regulators who were expected to enforce these relaxed standards.
It gets much better, so please read the whole thing.