Posts filed under “Regulation”

FDIC Chairman Sheila Bair on CRA: NOT Guilty

“Let me ask you, where in the CRA does it say to make loans to people who can’t afford to repay? Nowhere.”
-FDIC Chairman Sheila Bair

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This is old news to readers of the Big Picture, but I wanted to at least excerpt this:

“I want to give you my verdict on CRA: NOT guilty,” said FDIC Chairman Sheila Bair, according to a press release by the Federal Deposit Insurance Corporation. Before the Consumer Federation of America, Bair said Thursday she wanted to clear up the “myth” that the Community Reinvestment Act caused the financial crisis — and she set out to do so with vigor.

The Community Reinvestment Act — or CRA — is a 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. It has largely been criticized by conservative members of the GOP as promoting predatory lending practices.

“Point in fact,” she said, “only one in four higher-priced first mortgage loans were made by CRA-covered banks during the hey-day years of subprime mortgage lending.  The rest were made by private independent mortgage companies and large bank affiliates not covered by CRA rules.”

And “Let me ask you,” she proceeded. “Where in the CRA does it say to make loans to people who can’t afford to repay? Nowhere.” The facts are simple, Bair said. The lending practices that are causing problems today were driven by a desire for more market share and revenue growth, not because the government encouraged certain lending practices.

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Read the full item at Housing Wire.

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Source:
FDIC’s Bair Sets to Shatter CRA “Myth”
By KELLY CURRAN
December 5, 2008

http://www.housingwire.com/2008/12/05/fdics-bair-sets-to-shatter-cra-myth/

FDIC: Community Reinvestment Act is not cause of financial crisis, FDIC’s Bair said
Ronald D. Orol,
MarketWatch, 12:05 p.m. EST Dec. 4, 2008

http://tinyurl.com/fdic-cra

Category: Credit, Real Estate, Regulation

What Did the Repeal of Glass-Steagall Do ?

Here is a question that I have been wrestling with: What exactly did the repeal of the Glass-Steagall Act accomplish? Were there positives as well as negatives? Should the Gramm-Leach-Bliley Act be repealed, and Glass-Steagall reinstated? > ~~~ What say ye? >

Category: Bailouts, Credit, Finance, Legal, Regulation

Bush WH Ignored Mortgage Meltdown Warnings

“In hindsight, it was spot on.” -Jeffrey Brown, former top official at the Office of Comptroller of the Currency, one of the first agencies to raise concerns about risky lending. > A brutally damning article about the warnings the Bush administration received and ignored was published this morning by the Associated Press. The AP summed…Read More

Category: Bailouts, Credit, Finance, Legal, Real Estate, Regulation

The Lost Generation

The Obama team is keeping its cards close to the vest. That’s probably a good way to manage expectations, good politics and it may even be good policy. Until the new team can get in place, there doesn’t seem much point in sending signals or taking responsibility for actions they cannot control. More to the…Read More

Category: BP Cafe, Regulation

Regulation after Bush

What does the future hold for regulating Wall Street? Regardless of who wins today’s election, both Barack Obama and John McCain have staked out different positions on issues involving economic regulation – and each is very different than the outgoing president. The Economists’ Voice looks at what we might expect in the post-Bush era: While …Read More

Category: Markets, Politics, Regulation

Bush’s Push For Deregulation

In the final months of his administration, Pres. Bush and his aides are requesting a series of regulation changes ranging from issues concerning the environment to the economy:

CBS Sunday Morning:


Watch CBS Videos Online

Nov. 1, 2008

Category: Legal, Regulation, Taxes and Policy, Television, Video

Adam Smith Was a Socialist

I hate politics. I cannot stand the maneuvering to avoid discussing issues, and instead focus on name calling. The latest idiocy is the entire Socialist meme, which, having seen the banking industry nationalized, is a bizarre charge to make these days. It is especially odd, given the nature of wealth distribution in a capitalist system…Read More

Category: Markets, Politics, Regulation

Seven Deadly Sins of the Meltdown

Category: Bailouts, Economy, Investing, Markets, Politics, Regulation

Greenspan: “I Suck”

Category: Federal Reserve, Regulation