Community Reinvestment Act

Since some folks keep trotting out the lie that minorities are responsible for this financial crisis I thought I'd make an attempt at figuring out why. I've seen the Community Reinvestment Act cited as the primary cause of this subprime meltdown, as it supposedly forced lenders to make unwise loans to risky borrowers. The facts are however that the CRA was passed in 1977, 31 years ago. The current crisis is the second housing crunch since that time, and no one blames the S&L problems of the 80's on the CRA. Charles Keating and his like are widely accepted as the cause of that problem due to unscrupulous efforts to achieve deregulation.

Now, back to the current situation, it can in no way be attributed to the CRA. Nor can the blame be laid at the feet of minorities. The situation arose within the last few years as the result of a concerted push by the US government and various lobbying groups whose goal was to make "every American" a homeowner. One such lobbying group was the Homeownership Alliance, a Fannie Mae and Freddie Mac advocacy group headed by Rick Davis who now runs McCain's campaign for President. This folks is the reason for this current crisis. Ethics, or the lack thereof on the part of those with the most to gain from ensuring that as many people as possible have home loans.