Wow. Right wing media would have us believe that the credit crisis can be blamed on minorities and poor people who couldn’t afford their mortgages (via the “democratic congress who forced banks to make loans to people who couldn’t afford them”). Their basis for this claim is the Community Reinvestment Act which was enacted in 1977 by democratic president Jimmy Carter and was intended to prevent discrimination in mortgage lending and encourage banks to make loans to customers who reside within the community that they operate.
Two of the most glaring problems with trying to blame the CRA:
1.) Only 20-25% of the bad loans behind the crisis were made by depository lending institutions that are subject to CRA. That means that 80% of the subprime mortgages had nothing to do with the CRA.
2.) Banks that were subject to CRA loans were substantially less likely than other lenders to make the high cost, high risk loans that fueled the subprime mess. CRA lenders were more than twice as likely as other lenders to hold originated loans in their portfolio (as opposed to selling them off to Fannie, Freddie, or other mortgage buyers). In fact, CRA loans were generally less risky and less likely to foreclose than other mortgages.
This is just more evidence of the right’s pathological inability and/or unwillingness to correctly identify the true source of a major disaster and hold the appropriate parties/policies accountable.
Some useful information that you won’t hear on Fixed News or talk radio: