re: #691 Rightwingconspirator

The meme is it wrecked the economy. The truth is it wrecked some banks and many, many low middle class consumer lives. Loans without strict means testing are fools errands.

The fact is that the vast, vast majority of the loans you’re talking about were given out by firms not subject to the CRA, they were given out voluntarily and without strict regulatory oversight. There was a frenzy to loan out as much as possible, then make more money bundling and reselling the derived products with the magic of credit default swaps.

It’s telling that, amid all the recent recriminations, even lenders have not fingered CRA. That’s because CRA didn’t bring about the reckless lending at the heart of the crisis. Just as sub-prime lending was exploding, CRA was losing force and relevance. And the worst offenders, the independent mortgage companies, were never subject to CRA—or any federal regulator. Law didn’t make them lend. The profit motive did.

And that is not political correctness. It is correctness.