A letter to the editor in today’s (9/19)Globe spouts a fast-growing urban myth of the right wing: that the Community Reinvestment Act of 1977 (CRA) is at the heart of the mortgage/foreclosure crisis. The writer asserts, we should blame the Democrats for the problem and praise Bush for trying to fix it.
This isn’t true. The fact is that independent mortgage companies, which are not covered by CRA, made high-priced loans at more than twice the rate of the banks and thrifts. Beginning in 2005, the Bush administration exempted banks with less than $1 billion in assets from the most stringent CRA provisions, but these smaller banks did not expand substantially their subprime lending in poor areas. Reliable estimates are that about one in four sub-prime loans were made by the institutions fully governed by CRA.
Urban myths die hard. This one should be exposed for the right wing delusion that it is.
In addition to your information, which I didn’t know, here is an article that shows how bad the Bush administration’s regulation was. They identified the problem in 2004 and then took until September 2006, after the housing b00m fizzled, to put out guide lines. http://www.nytimes.com/2007/12…
<
p>In addition, these shaky mortgages were addressed in the 2004 Democratic platform – and it’s another reason we would be better off if Ohio would have had sufficient voting machines.
<
p>”Mr. Kerry’s principal mortgage proposal would prohibit lenders from using balloon mortgages in most subprime loans, which often go to low-income people at higher rates.”
http://query.nytimes.com/gst/f…
Everyone knows the Republicans have controlled the government for most of the past decade.
the GOP/WSJ ed page talking points enough, and maybe they’ll come true.
<
p>First of all, Frank wasn’t the Chairman when this stuff was originally proposed. Second, the administration wanted two things in a bill — the ability to put the companies into receivership and to force them to sell off some of their portfolios.
<
p>All of the other regulatory changes they were fine with (as was Rep. Frank), but they wouldn’t come to the table and actually work out a compromise on these issues. The bill, championed by then-Chairman Mike Oxley (R-OH), died. Don’t believe me? Here’s what Oxley had to say about it earlier this month.
<
p>But yeah, it was all Barney’s fault.
… if that was why…
<
p>
<
p>… because you offer no support for an allegation I’ve heard nowhere else.
<
p>
As did the New York Times
<
p>Frank is quoted towards the end as ranking Democrat (No, he wasn’t Chair in 2003, as the Democrats didn’t control Congress at that time). This was Frank then –
<
p>”These two entities-Fannie Mae and Freddie Mac-are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
<
p>Today, of course, he’s whipping our press releases about how it’s all Bush’s fault.
… I don’t get how a statement, made in support of affordable housing, in 2003 (TWO-THOUSAND AND THREE) somehow turns Barney Frank into a killer of the administration proposal for stricter oversight”… and thus, presumably, marks him being responsible for derivative swaps, the housing bubble, lax regulation and overall general stupidity…
<
p>
As ranking member, Frank fought stricter regulation. That’s all. Without psychic abilites, he didn’t know how badly that oversight was needed, and how it could have avoided this problem now.
<
p>I NEVER said or implied Frank was involved in derivatives, swaps, etc. I DO think it is cheesy for him now to put out press releases decrying the lack of oversight regulations he fought at the time.
<
p>And please – spare me your self-rightous “Two Thousand THREE”, as BMG is home of the twenty and thirty year old quote (since you can’t find any current scandal about Romney or McCain, unlike Marzilli, Petrolati, Rogers, Asselin….)
that statement mean he fought stronger regulation? The paragraph before his quote states that some groups were fighting the proposal, but Barney’s comments don’t say anything about that.
<
p>If he fought so hard against it, then why did he, when he became Chairman, pass the bill? The Bush administration was on an idealogical jihad against Fannie and Freddie. Back in 2003, they wanted to shrink the companies so that the private sector (ie Wall Street) could securitize more mortgages.
<
p>Now, I don’t know about you, but after the subprime mess, I’m not sure I want the wizards of Wall Street securitizing my kid’s allowance.
to reform they wanted passed in 2003 and 2005 does not hold water. The Republicans controlled both houses of Congress then and there is nothing that Barney Frank could have done to stop any bill passing in the House.
<
p>I looked at the Senate record and there was no vote in either year on the Senate floor. Clearly neither Shelby or Frist wanted this voted on. Had the Republicans brought it to a vote, I seriously doubt the Democrats could have filibustered it. They succeeded at very few filibusters and there are many Democrats who had argued that oversight and regulation were needed. (there was even a plank dealing with it in the 2004 Democratic platform.)
<
p>We know which is the party of de-regulation.
<
p>The other right wing lie is that Congress (specifically, “liberals in Congress”) forced the banks and other companies to make bad loans. In fact, they fought for de-regulation and saw the ability for hugh short term profits.
http://query.nytimes.com/gst/f…