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5. The Community Reinvestment Act’s Responsibility for the Financial Crisis

Experts will likely be debating the constellation of factors that led to last year’s financial downturn for years to come, but many conservatives arrived at

Jul 31, 2020
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Experts will likely be debating the constellation of factors that led to last year’s financial downturn for years to come, but many conservatives arrived at the answer early. In late 2008 and early 2009, pundits and politicians on the right were quick to single out the Community Reinvestment Act (CRA) — a Carter-era law aimed at preventing discriminatory housing practices — as the chief cause of the housing collapse and, by extension, the financial crisis. Fox anchor Neil Cavuto put it most baldly, asserting, “Loaning to minorities and risky folks is a disaster.” The claim reverberated through the conservative echo chamber, and was picked up by elected officials like Rep. Jeb Hensarling (R-Texas), who saidof the CRA in March, “I know the intent was noble, but the effect has been devastating.” By the time Ben Bernanke and othermembers of the Federal Reserve began pushing back with facts, it had already become conventional wisdom in many quarters that it was not Wall Street greed or years of lax oversight that had caused the financial crisis, but a bullying gang of anti-poverty activists and irresponsible homeowners of color.
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Camilo Wood

Camilo Wood

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Camilo Wood has over two decades of experience as a writer and journalist, specializing in finance and economics. With a degree in Economics and a background in financial research and analysis, Camilo brings a wealth of knowledge and expertise to his writing. Throughout his career, Camilo has contributed to numerous publications, covering a wide range of topics such as global economic trends, investment strategies, and market analysis. His articles are recognized for their insightful analysis and clear explanations, making complex financial concepts accessible to readers. Camilo's experience includes working in roles related to financial reporting, analysis, and commentary, allowing him to provide readers with accurate and trustworthy information. His dedication to journalistic integrity and commitment to delivering high-quality content make him a trusted voice in the fields of finance and journalism.
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