Community Reinvestment Act

[Crotalus]

I am sick of the Republicans getting bashed for this economy when everything that happened was caused by a law enacted by Carter, rammed down the bank's throats by Clinton, and remedial action prevented by the Democrats during Bush.

The Community Reinvestment Act forced banks to give loans to people that were completely unqualified to pay back the loan. The law was supposed to correct _Redlining_. This is the supposed bank practice of denying loans to people that lived in poorer communities. The banks would be prevented from making a lot of acquisitions and other business unless they could show that 40 something percent of their loans were to underprivileged people. The banks invented "liars loans" where people made completely false applications to get the loans. Everyone knew the loans were toxic, so government controlled Fanny Mae bought the loans and had them guaranteed by an insurance company and sold them all over the world. When the loans failed the insurance company quickly went bankrupt leaving all of us holding the empty bag. Congress rigged it so the Fannie Mae people got rich while this was happening.

The biggest loan maker was Country Wide that made lots of cheap loans to Congressmen. Many that were never repaid.

Iceland bought so many bad derivatives that their economy is in collapse, but you never hear about it.