Bankers were getting sued for not giving subprime loans
The CRA "Comunity Reinvestment Act".Jimmy Carter's idea made it mandatory to loan money to people who didn't even have a job.
Bill Clinton Saw banks were not complying with the CRA so they started sue'ing the banks. The banks went to Bill Clinton. and agreed to make the loans, but only if Clinton remove the Glass Steagall Act.
That made the taxpayer FDIC insure gambling in the markets.
The bankers came up with the NINJA loans. No Income No Job or Assets. The banks hid the very bad loans in the CDOs "Consolidated Debt Obligation" both republicans and democrats removed the Glass Steagall Act. We actually sued them if they didn't gamble with our money. The NINJA loans were a small %. But when they removed Glass Steagall to get the banks to give the loans to anyone with a pulse, abuse was imminent. I spliced these videos together back when we crashed. Stars would Include Bill Clinton bragging about forcing the loans.
Chair of the House Financial Services Committee. Maxine Waters is trying to keep the banks giving bad loans going. Then we put her as chair HFSC. Bill Clinton repealed Glass Steagall. It was like sending bankers to Las Vegas with our credit card. Without Glass Steagall, they had nothing to lose.
The CRA applies to FDIC-insured depository institutions, including national banks, state-chartered banks, and savings associations. However, credit unions backed by the National Credit Union Share Insurance Fund and other non-bank entities are exempt from the legislation.
Critics of the CRA, including some conservative politicians and pundits, point to the law as a contributing factor in the risky lending practices that led up to the financial crisis of 2008. They allege that banks and other lenders relaxed certain standards for mortgage approvals to satisfy CRA examiners.
However, some economists, including Neil Bhutta and Daniel Ringo of the Federal Reserve Bank, argued in 2015 that CRA-based mortgages represented a small percentage of the subprime loans during the financial crisis. As a result, Bhutta and Ringo concluded that the law was not a major factor in the market’s subsequent downturn.
The CRA has also received criticism that it has not been particularly effective.
read more CRA, Investopedia.com
