The Community Reinvestment Act of 2007

[American]

Link

Sponsor: Eddie Johnson (D-TX); co-sponsors all Dems

• • The Congress finds as follows:
    • (1) It is necessary to increase homeownership and small business ownership for low- and moderate-income borrowers and persons of color. It also is necessary to close the wealth gap in the United States and to increase access to insurance and securities products.
      (2) The Community Reinvestment Act of 1977 has been effective in increasing access to credit and capital because it imposes an affirmative and continual obligation on banks and thrifts to meet the needs of the local communities in which they are chartered.
      (3) The Community Reinvestment Act of 1977 [Jimmy Carter] has leveraged more than $4,000,000,000,000 in loans and investments for low- and moderate-income communities according to the National Community Reinvestment Coalition.
      (4) Major studies, including those conducted by the Secretary of the Treasury, the Board of Governors of the Federal Reserve System, and Harvard University, have found that the Community Reinvestment Act of 1977 increases home mortgage lending to minority and low- and moderate-income communities and that this lending is profitable.
      (5) The Community Reinvestment Act of 1977 has leveraged a tremendous increase in home mortgage lending to minority and low- and moderate-income borrowers as compared to whites and middle-income borrowers; from 1993 through 2002, home mortgage lending has increased by 79.5 percent to Blacks, by 185.8 percent to Hispanics, by 29.6 percent to whites, by 90.6 percent to low- and moderate-income borrowers, and by 51.4 percent to middle-income borrowers.
      (6) While the Community Reinvestment Act of 1977 has been effective, significant wealth disparities remain; in the fourth quarter of 2004, the white homeownership rate was 76.2 percent while the African-American and Hispanic homeownership rates were 49.1 percent and 48.9 percent, respectively.
      (7) In 2002, the median net worth for Hispanic and African-American households was $7,932 and $5,988 respectively, while, in sharp contrast, the median net worth for White households was $88,651.
      (8) Research conducted by the chief economist of the National Association of Insurance Commissioners found that after controlling for risk of loss, a 10 percentage point increase in the number of minorities in a zip code is associated with a 2 percentage point increase in the number of `FAIR plans', which are government-sponsored insurance plans of last resort for those who cannot obtain insurance in the private market.
      (9) In order to increase access to credit, wealth and insurance, it is necessary to modernize the Community Reinvestment Act of 1977 to reflect shifting trends in the financial services industry since, currently, only about 40 percent of the assets in the financial industry reside in bank and thrifts and are covered by the Community Reinvestment Act of 1977, which is down from about 60 percent in the early 1980s.

  Now what do you think the purpose of this act is? Hmmmm?

[SouthernDemocrat]

I ask again, what percentage of defaulted mortgages occurred in inner city economically depressed areas?

What percentage of subprime mortgages fell under CRA?

[American]

You're still answering questions with questions. When you see the words banks and thrifts, thrifts means S&Ls. Well we had this once before called the S&L Crisis. Same principles involved. Bad loans.

[Reverend_Hellh0und]

look racial preferences. how nice.

[SouthernDemocrat]

Originally Posted by American

You're still answering questions with questions. When you see the words banks and thrifts, thrifts means S&Ls. Well we had this once before called the S&L Crisis. Same principles involved. Bad loans.

The correlation is lax regulation. If you want to blame this on liberalism, then you need to empirically show where the bulk of these bad loans fell under CRA.

Its not enough just to say something, you need to back it up with some hard data.

You are also not taking into account that many mortgages in low income areas do not carry such a high risk because they have HUD backing.

[American]

Originally Posted by SouthernDemocrat

The correlation is lax regulation. If you want to blame this on liberalism, then you need to empirically show where the bulk of these bad loans fell under CRA.

Its not enough just to say something, you need to back it up with some hard data.

You are also not taking into account that many mortgages in low income areas do not carry such a high risk because they have HUD backing.

Lots of mortgages have government backing, I don't think that is the only factor.

[American]

Originally Posted by SouthernDemocrat

The correlation is lax regulation. If you want to blame this on liberalism, then you need to empirically show where the bulk of these bad loans fell under CRA.

Its not enough just to say something, you need to back it up with some hard data.

You are also not taking into account that many mortgages in low income areas do not carry such a high risk because they have HUD backing.

BTW, Rev is talking smack to you here.... http://www.debatepolitics.com/dungeo...-democrat.html

In case you were unaware.

[Iriemon]

Originally Posted by American

Lots of mortgages have government backing, I don't think that is the only factor.

It is a factor because loans to loan income groups were specifically known to be a risk factor and that they were explicitly backed by the government.

What is the percentage of bad loans that are attributable to government backed financing?

[Iriemon]

Originally Posted by American

BTW, Rev is talking smack to you here.... http://www.debatepolitics.com/dungeo...-democrat.html

In case you were unaware.

Another lame attempt to dodge.