Dems Get Hammered For Causing Subprime Disaster

[Beta84]

OMG!!! You mean Democrats tried to defend the people paying for their campaigns? Isn't that how politics work? Why do you think Obama is trying to eliminate that? It's a terrible system because it screws up your views sometimes, which is extremely unfortunate.

And by the way...Democrats have been in control of Congress for less than 2 years. We were already going under due to the subprimes by the time they took over (and that says Republicans called it in 2003...when they had full control of executive and legislative branches). So pray tell, if the Republicans knew...why didn't they do something during the long period of time prior to that, when they had the ability?

Exactly. Everyone is to blame, or at least it's not 1 specific party...even if some people were actually trying to blow the horn.

[cwo_ghwebb]

Larry, I respectfully disagree with some of your comments. I'm not that pessimistic about the job Bush as done. I'm not entirely happy with government by a long shot. It's gotten too big and the American people have gotten too complacent. If something goes wrong in their lives, look to the government to bail them out.

The way I look at it, there is a large difference in the two major parties with splinter parties that are further left/right. (I'm not sure if they'll have an influence on this election.)

Democrats look at government as the all-knowing savior of the ignorant, bitter folks.

Republicans look at government as the ignorant one.

One party wants socialism, one wants some sort of Republic to continue.

It sounds as if you support taking a page from the 90s, when Perot split the vote (yes, I voted for the nut the first time) and the reaction to losing brought together the conservatives under Newt and they took back the House. By the way, that's the only way Clinton was kept in check and he was/is far right of Obama.

Consider this scenario: Obama wins by a landslide, Democrats get their 60 votes in the Senate and control the pursestrings in House. You really think they will screw up so badly again that the Republicans can take back the House in two years? I don't.

I also think the Federal government will mirror what we have here in Maryland. Funds diverted from the majority of the country to the unproductive, social leaches of society. It has definitely sucked here in Maryland the last two years, mostly as a result of local government meddling. I'm a transplant, been all over as most career military folks are prone to do. I really love this area and the people of Southern Maryland. But, after the little one graduates next June, we're probably outta here and head for someplace more rural, probably more south. And Costa Rica is still in the mix. We're not like those two kids threatening to move, we WILL move. (And I'll probably comment from afar to stay under my favorite poster's skins).

Thank the Lord for the beautiful day we have and don't be so pessimistic Larry. I do hope the country takes a turn toward what I believe is better, but that's up to the voters.

[cwo_ghwebb]

Originally Posted by Beta84

OMG!!! You mean Democrats tried to defend the people paying for their campaigns? Isn't that how politics work? Why do you think Obama is trying to eliminate that? It's a terrible system because it screws up your views sometimes, which is extremely unfortunate.

And by the way...Democrats have been in control of Congress for less than 2 years. We were already going under due to the subprimes by the time they took over (and that says Republicans called it in 2003...when they had full control of executive and legislative branches). So pray tell, if the Republicans knew...why didn't they do something during the long period of time prior to that, when they had the ability?

Exactly. Everyone is to blame, or at least it's not 1 specific party...even if some people were actually trying to blow the horn.

Beta, I don't consider Wiki to be the most reliable source but dates of when laws were passed, and dates changes were made to the laws are pretty factual. Look at this entry and tell me what you see.

Original Act

The CRA was passed by the 95th United States Congress and signed into law by President Jimmy Carter in 1977 as a result of national pressure for affordable housing.[2] In Congressional debate on the Act, critics charged that the law would "distort credit markets, create unnecessary regulatory burden, lead to unsound lending, and cause the governmental agencies charged with implementing the law to allocate credit." In response Congress included little prescriptive detail and gave agencies considerable regulatory flexibility.[3]

The CRA mandates that each banking institution be evaluated to determine if it has met the credit needs of its entire community. That record is taken into account when the federal government considers an institution's application for deposit facilities. The Act charged the Federal Reserve System to implement the CRA through ensuring banks and savings and loans met their CRA obligations.[2] The CRA is also enforced by the Federal Deposit Insurance Corporation ("FDIC") CRA Statute. Community groups only slowly organized to take advantage of their right under the Act to complain about law enforcement of the regulations.[4][5]

Congressional Changes 1989 - 1994

The Financial Institutions Reform Recovery and Enforcement Act of 1989 (FIRREA) was enacted by the 101st Congress and signed into law by President G. H. W. Bush in the wake of the savings and loan crisis of the 1980s. As part of a general reform of the banking industry, it increased public oversight of the process of issuing CRA ratings to banks. It required the agencies to issue CRA ratings publicly and written performance evaluations using facts and data to support the agencies' conclusions. It also required a four-tiered CRA examination rating system with performance levels of "Outstanding," "Satisfactory," "Needs to Improve," or "Substantial Noncompliance."[3]


According to Ben Bernanke, Chair of the Federal Reserve System since 2006, this law greatly increased the ability of advocacy groups, researchers, and other analysts to "perform more-sophisticated, quantitative analyses of banks' records," thereby influencing the lending policies of banks. Over time, community groups and nonprofit organizations established "more-formalized and more-productive partnerships with banks."[2]


Bernanke also stated that CRA was affected by the United States Congress passing the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. This act required the Federal National Mortgage Association, commonly known as Fannie Mae, and the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, to devote a percentage of their lending to support affordable housing. This in part, contributed to increased Fannie Mae and Freddie Mac pooling and selling of such loans as securities , (i.e. securitization), and expanded the secondary market for those loans.[2]


In 2000, in order to expand the secondary market for affordable community-based mortgages and to increase liquidity for CRA-eligible loans, Fannie Mae committed to purchase and securitize $2 billion of "MyCommunityMortgage" loans. [6][7]

Clinton Administration Changes 1995

In July 1993 President Clinton asked regulators to reform the CRA in order to reduce paperwork and reward performance.[8] The CRA regulations were substantially revised and featured requiring numerical assessments to get a satisfactory CRA rating; using federal home-loan data broken down by neighborhood, income group, and race; encouraging community groups to complain when banks were not loaning enough to specified neighborhood, income group, and race; allowing community groups that marketed loans to targeted groups to collect a fee from the banks.[3]


During March 1995 congressional hearings William A. Niskanen, chair of the Cato Institute, criticized the proposals for political favoritism in allocating credit and micromanagement by regulators, and that there was no assurance that banks would not be expected to operate at a loss. He predicted they would be very costly to the economy and banking system, and that the primary long term effect would be to contract the banking system. He recommended Congress repeal the Act.[9]


Responding to concerns that CRA would lower bank profitability, a 1997 research paper by economists at the Federal Reserve found that "[CRA] lenders active in lower-income neighborhoods and with lower-income borrowers appear to be as profitable as other mortgage-oriented commercial banks".[10] Speaking in 2007, Federal Reserve Chair Ben Bernanke noted that, "managers of financial institutions found that these loan portfolios, if properly underwritten and managed, could be profitable" and that the loans "usually did not involve disproportionately higher levels of default".[2]

/continued next post

[cwo_ghwebb]

Howard Husock, vice-president of the market-oriented conservative Manhattan Institute and author of a book on American housing policy, writes that once in effect, the new rules substantially increased the number and aggregate amount of loans to low- and moderate-income borrowers for home loans. The Senate Banking Committee estimated that as of 2000, as a result of CRA, such groups had received $9.5 billion in services and salaries. As of that time such groups also had received tens of billions of dollars in multi-year commitments from banks to loan to local communities, including the ACORN housing advocacy organization $760 million; Boston-based Neighborhood Assistance Corporation of America $3 billion; a New Jersey Citizen Action-led coalition $13 billion; the Massachusetts Affordable Housing Alliance $220 million.[11]
According to a United States Department of the Treasury study of lending trends in 305 U.S. cities between 1993 and 1998, 467 billion dollars in mortgage credit flowed from CRA-covered lenders to CRA-eligible borrowers. The number of CRA mortgage loans increased by 39 percent. Other loans increased by only 17 percent.[12]

[edit] Congressional Changes 1999

In 1999 the Congress enacted and President Clinton signed into law the Gramm-Leach-Bliley Act, also known as the "Financial Services Modernization Act," which repealed the part of the Glass-Steagall Act prohibiting a bank from offering a full range of investment, commercial banking, and insurance services. The bill was killed in 1998 because Senator Phil Gramm wanted the bill to expand the number of banks which no longer would be covered by the CRA. He also demanded full disclosure of any financial deals which community groups had with banks, accusing such groups of "extortion." In 1999 Senators Christopher Dodd and Charles E. Schumer broke another deadlock by forcing a compromise between Gramm and the Clinton administration which wanted to prevent banks from expanding into insurance or securities unless they were compliant with the CRA. In the final compromise, the CRA would cover bank expansions into new lines of business, community groups would have to disclose certain kinds of financial deals with banks, and smaller banks would be reviewed less frequently for CRA compliance.[13][14][15] On signing the Gramm-Leach-Bliley Act, President Clinton said that it, "establishes the principles that, as we expand the powers of banks, we will expand the reach of the [Community Reinvestment] Act".[16]

[edit] GW Bush Administration Changes 2005

In 2002 there was an inter-agency review of the effectiveness of the 1995 regulatory changes to the Community Reinvestment Act and new proposals were considered.[3] In early 2005, the Office of Thrift Supervision (OTS) implemented new rules that – according to Congressional Democrats – substantially weakened the CRA.[17] This culminated when the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System, and the Office of the Controller of the Currency put a new set of regulations into effect in September 2005.[18] In April 2005, a contingent of Democratic Congressmen issued a letter protesting these changes, as they undercut the ability of the CRA to "meet the needs of low and moderate-income persons and communities".[17]
The regulations included less restrictive new definitions of "small" and "intermediate small" banks.[2] "Intermediate small banks" were defined as banks with assets of less than $1 billion, which allows these banks to opt for examination as either a small bank or a large bank.[18] Currently banks with assets greater than $1.061 billion have their CRA performance evaluated according to lending, investment and service tests. The agencies use the Consumer Price Index to adjust the asset size thresholds for small and large institutions annually.[3]

[PsyOps]

Originally Posted by Larry Gude

If McCain and our beloved GOP get WIPED out this fall, THAT is the first step towards better government; the ashes of bad government. If McCain only loses by a little, it will start the cycle all over again of excuse making and woulda shoulda coulda's and hey, we really mean to be conservative this time!

If what you're doing isn't working. Do something else.

I completely get where you're coming from with this and, on principle, I agree. But I can't get past two things...

1) Will this GOP-clean-house make us safer? Will having a dem controlled Congress (by an even larger margin than we have now) AND a dem in the WH provide us the national security we need. If your answer is no then ask this... With the current condition of our economy can we handle another 911-like attack? With the belief that Obama will do nothing for national security can we expect to see IEDs in American cities? Will we be safer under Obama vs. McCain? If not do you trust that one of your own won be their target? You're willing to risk our national security for cleaning house and rebuilding the conservative base?

2) I mentioned this to you before... Once the dems get control of Congress and the WH nothing with stop them from instituting universal healthcare and a plethora of other social programs that, once started, you can't stop. Couple this with the possibility of point 1… I can’t imagine the damage that would be done; all for the sake of cleaning up the conservative base. I’m not sure it’s worth it.

Originally Posted by PsyOps

I can’t imagine the damage that would be done; all for the sake of cleaning up the conservative base. I’m not sure it’s worth it.

Aww Come On PsyOps ... what are a few 1000 more dead Americans

...maybe a little Death and Destruction @ the Local Mall is what is needed to break the Apathy of MSA and show the PEOPLE once and for all how Socialists in Congress and the White House do not have our best interests in mind, but instead their own self serving interests ... and maybe people will also wake up to the threat by Global Islam ....

[Larry Gude (Premo)]

Originally Posted by ImnoMensa

You seem to enjoy pointing out the crimes of the GOP and placing blame and saying how if they get wiped out this year its the first step to better government.

Thats Horsecrap ----If the GOP gets wiped out the democrats who you named as at fault will be in charge, How does that mean a first step to better government??? .

If you think the last seven years have been tolerable, OK or even good to great, then, by all means, keep on keeping on.

If you think, as I do, that the last seven years has been transformative for the worse for the nation, as a whole, as I do, then it's time to stop doing what I've been doing.

Voting for McCain and the rest of the gang is not, NOT, likely to get them to change. My guy, Roscoe Bartlett, voted against this horrific piece of legislation that has, over night, transformed the government/business relationship. For the worse.

There is NOTHING I can do to get the Dems to hold their people responsible. I railed against them for 8 years of excuse making for ol' Bubba. I am not and will not do the same. I regret support Bush. I regret making excuses for him and Rumsfeld and Cheney and Hastert and Frist. I feel like a victim of my own government except I asked for it. That Obama will be no better or worse, even much worse, may be what it takes for those people to hold their people responsible, if they even actually care.

I think I am betrayed in my beliefs by the GOP on several fundamental levels.

[Larry Gude (Premo)]

Originally Posted by cwo_ghwebb

Larry, I respectfully disagree with some of your comments. I'm not that pessimistic about the job Bush as done. I'm not entirely happy with government by a long shot. It's gotten too big and the American people have gotten too complacent. If something goes wrong in their lives, look to the government to bail them out.

The way I look at it, there is a large difference in the two major parties with splinter parties that are further left/right. (I'm not sure if they'll have an influence on this election.)

Democrats look at government as the all-knowing savior of the ignorant, bitter folks.

Republicans look at government as the ignorant one.

One party wants socialism, one wants some sort of Republic to continue.

It sounds as if you support taking a page from the 90s, when Perot split the vote (yes, I voted for the nut the first time) and the reaction to losing brought together the conservatives under Newt and they took back the House. By the way, that's the only way Clinton was kept in check and he was/is far right of Obama.

Consider this scenario: Obama wins by a landslide, Democrats get their 60 votes in the Senate and control the pursestrings in House. You really think they will screw up so badly again that the Republicans can take back the House in two years? I don't.

I also think the Federal government will mirror what we have here in Maryland. Funds diverted from the majority of the country to the unproductive, social leaches of society. It has definitely sucked here in Maryland the last two years, mostly as a result of local government meddling. I'm a transplant, been all over as most career military folks are prone to do. I really love this area and the people of Southern Maryland. But, after the little one graduates next June, we're probably outta here and head for someplace more rural, probably more south. And Costa Rica is still in the mix. We're not like those two kids threatening to move, we WILL move. (And I'll probably comment from afar to stay under my favorite poster's skins).

Thank the Lord for the beautiful day we have and don't be so pessimistic Larry. I do hope the country takes a turn toward what I believe is better, but that's up to the voters.

Last week presented a golden moment for McCain to prove, yet again, he's not going to be Bush III and to prove to conservatives he hears us and knows we're right and to, if only for pure political reasons, to profoundly distance and define himself from his opponent and, AND be in the right.

Happily/sadly, Sen. McCain reminded me in no uncertain terms why I did NOT support him in the first place until he went and waved a real conservative, or so I hope, in front of my face.

They, our elected leaders, have spent nearly TWO TRILLION on this cleanup and the most important thing to them seems to have been to hang together lest we start thinking a good many of them actually give a damn what we think.

This thing faced overwhelming objection by the American people. Not 51-49, but something like 70-80% against and that is after they all took a turn telling us simpletons they just HAVE to do this. For our own good.


Respectfully, we do disagree.

[Bann (Premo)]

Ditto to much of what ImnoMensa, cwo_ghwebb & PsyOps said.

I, too, see where you're coming from Larry.

But I said a while ago that the main issues I consider important for my boys' & my future were/are:

National Security
Supreme Court Nominees
Economy

They still are. I also voted for Ross Perot in 1992, which was an abysmal mistake. So I am going to be pretty darn sure there's someone else I believe in enough to do that again. So far, I don't.

[wintersprings]

"get the Dems to hold their people responsible"

is not going to happen...But they do see their hand prints all over this mess, and are trying to hush it up with our money....