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Politics : Mainstream Politics and Economics
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To: Broken_Clock who wrote (37501)1/10/2013 11:16:39 PM
From: i-node4 Recommendations  Read Replies (2) of 85487
 
>> The CRA was passed in 1977 and the RE bubble began after the stock bubble burst in 1999/2000.

The CRA as enacted in the late 70s wasn't the problem because it had no teeth.

In 1995, Bill Clinton expanded the scope of CRA by ordering changes to the regulations thereunder, which essentially required banks to make loans to unqualified borrowers. THAT, more than any other single thing, caused the crash five years ago.

In 2008 BOA had outstanding CRA loans amounting to 7% of its mortgages yet accounting for 30% of its losses.

An argument can be made there were other factors. But any goof who denies there was a role -- and a substantial one -- played by CRA doesn't have a clue what he's talking about.
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