The Community Reinvestment Act is a United States federal law designed to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.

"The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA."

" University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. "

"Not surprisingly given the higher degree of supervision, loans made under the CRA program were made in a more responsible way than other subprime loans. CRA loans carried lower rates than other subprime loans and were less likely to end up securitized into the mortgage-backed securities that have caused so many losses, according to a recent study by the law firm Traiger & Hinckley"

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Finally, keep in mind that the Bush administration has been weakening CRA enforcement and the law’s reach since the day it took office. The CRA was at its strongest in the 1990s, under the Clinton administration, a period when subprime loans performed quite well. It was only after the Bush administration cut back on CRA enforcement that problems arose, a timing issue which should stop those blaming the law dead in their tracks. The Federal Reserve, too, did nothing but encourage the wild west of lending in recent years. It wasn’t until the middle of 2007 that the Fed decided it was time to crack down on abusive pratices in the subprime lending market."

Better targets for blame in government circles might be the 2000 law which ensured that credit default swaps would remain unregulated, the SEC’s puzzling 2004 decision to allow the largest brokerage firms to borrow upwards of 30 times their capital and that same agency’s failure to oversee those brokerage firms in subsequent years as many gorged on subprime debt"

"upwards of 35% of all subprime lending went to housing speculators. Speculators who expected rising values to continue indefinitely. Once again not the purview of the Community Reinvestment Act, more the purview of greedy house traders."

This is in fact unconstitutional.
I sencerely hope this law (if it passes) gets challenged in courts. It is unconstitutional on at least two counts:
1. You can not change the law retroactively (ex post facto)

"A large "exception" to the ex post facto prohibition can be found in administrative law, as federal agencies may apply their rules retroactively if Congress has authorized them to do so. Retroactive application is disfavored by the courts for a number of reasons,[4] but Congress may grant agencies this authority through express statutory provision. Furthermore, when an agency engages in adjudication, it may apply its own policy goals and interpretation of statutes retroactively, even if it has not formally promulgated a rule on a subject."

Banks were given 100s of billions of $$$ without questions asked. Automaker's CEOs were "grilled" in the Senat and still didn't get any $$$. Why not "grill" Bank's CEOs? ... Why not make them accountable? ... Why not appoint "Bank's Czar" to look after them? ...
Why different aproach to these 2 branches of economy? ...
Will anyone ever go to jail for issuing "bad mortgages"? ...
Any thoughts? ...
I wrote this dec 15th ... since then nobody could answer this topic ...
any thoughts, my Republican friends? :-) (fr)

Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA.

Лина, а где я сказал что сегоднешний кризис это результат CRA???
Пример с CRA был приведен в ответ Андрею на то что государство не влияет на банковскую систему.

Андрей, многих в тюрьму сажать придется, начиная с Wall Street. Всёравно ничего конкретно не докажите. Все будут друг на друга стрелки переводить. Wall Street скажeт что у нас никогда проблем с mortgage-backed securities небыло и поэтому мы не знали. Bank CEOs скажут что underwriters виноваты, те в свою очередь свалят на брокеров, брокеры на reals estate agents, и т.д.
В итоге, виноват будет тот, кто с доходом $5000/мес. берет $4000/мес. mortgage

i'm sorry, i don't have time to read all of this, but i see that everyone is still arguing. what's the problem now?