Ole Stand-By: GOP Still Blaming CRA for Financial Crisis
Worth noting from yesterday’s House Judicial subcommittee hearing on the foreclosure crisis: Republicans just can’t shake the temptation to blame the Community
Jul 31, 2020329K Shares4.6M Views
Worth noting from yesterday’s House Judicial subcommittee hearing on the foreclosure crisis: Republicans just can’t shake the temptation to blame the Community Reinvestment Actfor causing the current economic turmoil.
You’ve heard the critics’ argumentbefore: The CRA hasn’t so much empowered low-income borrowers as it has lowered lending standards, thus forcing banks to make the bad loans that led to the crisis.
Rep. Trent Franks (R-Ariz.), the subpanel’s senior Republican, summed up the sentiment nicely Thursday when he claimed the downturn was caused not by predatory lenders preying on people, but by a predatory government preying on banks for political ends.
Never mind that no less an authority than the Federal Reserve’s director of consumer and community affairssaid the CRA was “ Instead, the Fed found that CRA-covered banks were responsible for just 6 percent of the risky, high-cost loans that sparked the financial wildfire.
Franks’ comments weren’t overlooked by Rep. William Delahunt (D-Mass.), who used most of his Q&A time debunking the myth, picking from witnesses statistics like those reported by the Fed. Not that he imagined the Republicans were listening.
“When you’re looking for whipping boys,” Delahunt said, “the CRA is just a prime target.”
Paolo Reyna
Reviewer
Paolo Reyna is a writer and storyteller with a wide range of interests. He graduated from New York University with a Bachelor of Arts in Journalism and Media Studies.
Paolo enjoys writing about celebrity culture, gaming, visual arts, and events. He has a keen eye for trends in popular culture and an enthusiasm for exploring new ideas. Paolo's writing aims to inform and entertain while providing fresh perspectives on the topics that interest him most.
In his free time, he loves to travel, watch films, read books, and socialize with friends.
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