Obama Boosts CRA Authority To Force Banks To Make Low-Income Loans

Despite new evidence the Community Reinvestment Act led to riskier lending and played a key role in the subprime mortgage crisis, the Obama administration is broadening the anti-redlining regulation's authority and scope, spooking bankers.

A recent study by the National Bureau of Economic Research, the nation's pre-eminent economic research group, states that the CRA "clearly" had a major impact on the flood of subprime loans made in the late 1990s and 2000s, which directly led to the housing crisis.

By quietly expanding the regulation, analysts say President Obama is picking up where President Clinton left off in April 1995, when he rewrote rules for what had been a largely toothless law as first drafted in 1977....


The CRA overhaul "has been a disaster," said ex-BB&T CEO John Allison in his recent book on the financial crisis. He argued it's forced "banks to participate in making high-risk housing loans to low-income buyers who would not meet traditional bank lending standards."

Added Allison, who now heads the Cato Institute: "The default rates on these low-income loans are extraordinarily high."


Still, the Obama administration wants banks to step up approval of such low-income mortgages. And it's using the CRA to spur more lending, including:


• Forcing banks through threat of prosecution to expand their CRA assessment areas to include inner-city areas blighted by subprime foreclosures, where they are compelled to invest in new brick and mortar.

Many banks, in fact, are under direct federal orders to open new branches or ATMs in high-risk and unprofitable areas of Detroit, St. Louis and other cities hit hardest by the recession.

"If your assessment area looks like something you can eat — a bagel or is crescent shaped — that should be a red flag for your bank," senior Department of Justice official Tom Perez warned bankers serving areas mainly outside the inner city.

"DOJ wants banks to have a physical presence in the inner city," Washington-based Buckley Sandler LLP recently told clients, adding that "banks should carefully monitor loan data to determine whether an appropriate volume of loan originations emanate from minority areas."

• Ordering bank defendants accused of lending bias to underwrite riskier CRA loans at discounted rates.

For instance, Justice has ordered First United Security Bank of Alabama to "ensure that residential and CRA small business loan products are made available and marketed in majority African-American census tracts," while offered on terms "more advantageous to the applicant" than normal......

But the ignorant voters and media blowhards think he sounds cool and can read a TP like the best Hollywood actor, and think that is all it takes to run the country.

Case in point: look st the media fixation with Rubio's 4-second break to drink some water (after having already delivered the response in spanish and then in english) and completely ignoring the content of his response, while Obama had dozens of pauses and applause periods to allow him to wet his whistle. And most did not bother to even cover Rand Paul's response at all.

Case in point: look st the media fixation with Rubio's 4-second break to drink some water (after having already delivered the response in spanish and then in english) and completely ignoring the content of his response, while Obama had dozens of pauses and applause periods to allow him to wet his whistle. And most did not bother to even cover Rand Paul's response at all.

You couldn't ignore Rubio's 'Watergate'. You couldn't ignore it if Obama did it either. There's no double standards here.

Really?

did you hear anything about that?
I seriously doubt it.

or this?


any talk in the media about that ending HER presidential aspirations, like the scum at CNN [newsbusters.org]? HAHA, don't bother to search, you wont find any.

Anyway, that's not the point of this thread, so let's not take it OT

The odd thing about Rubio is not that he drank water, but that he ducked out of camera view to do it in the middle of his speach. Never seen that before, including your examples.

It looks like Obama was just waving when he took a sip and Hillary is testifying before Congress; something she did for what, 5 hours?

And Rubio could not even hold out for 20 minutes.

You couldn't ignore Rubio's 'Watergate'. You couldn't ignore it if Obama did it either. There's no double standards here.

If Fox News didn't even air Rand's response, can you really expect the MSM to do that?

Say nic, what are your thoughts on the topic of discussion?

The author of the article seems to be pimping his latest book. I don't see him as being very credible, ohno.

Hide"Great American Bank Robbery"

His latest book "The Great American Bank Robbery" is about how the government's attempt to increase minority home-ownership helped create the sub-prime housing crisis.

http://en.m.wikipedia.org/wiki/Pa...#section_2

If you want to blame government, blame it for letting the banks do whatever they wanted.

That's different. What happened to it all being Bush's fault?

Huh?

I blame Clinton for FNMA1999, and CFTMA2000.

"For instance, Justice has ordered First United Security Bank of Alabama to "ensure that residential and CRA small business loan products are made available and marketed in majority African-American census tracts," while offered on terms "more advantageous to the applicant" than normal......"