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Could you be specific about these legal moves? Are you referring to the Community Reinvestment Act (CRA)[1]? Most of the subprime lending was done by banks tha

Could you be specific about these legal moves? Are you referring to the Community Reinvestment Act (CRA)[1]? Most of the subprime lending was done by banks that weren't held to those standards [2]. And CRA conformant loans have had better repayment records than the bulk of the pre-crisis securitized subprime lending. I believe it was bad judgement^H^H^H^H^H^H^H^H^H a business decision on the part of the bank(s). [1] http://en.wikipedia.org/wiki/Community_Reinvestment_Act http://en.wikipedia.org/wiki/Community_Reinvestment_Act [2] http://www.ritholtz.com/blog/2009/06/most-subprime-lenders-werent-covered-by-cra/ http://www.ritholtz.com/blog/2009/06/most-subprime-lenders-w...

protomyth 12y ago
Yes, the CRA as modified by follow-up legislation. Your [2] actually gets its data from an article in the Orange County Register [3] which claims to do an analysis of a database that they do not provide or reference. A article of history [4] and the numerous WSJ articles provide a pretty clear picture. CRA had some very foolish amendments including some that affected the deployment of ATMs of all things. It wasn't the single cause, but it was a major player. Which brings me back to my original question "Were German banks compelled to make bad loans or was it their failed risk judgement?" 3) http://www.ocregister.com/articles/loans-20542-subprime-banks.html http://www.ocregister.com/articles/loans-20542-subprime-bank... 4) http://www.businessinsider.com/the-cra-debate-a-users-guide-2009-6 http://www.businessinsider.com/the-cra-debate-a-users-guide-...
- crdoconnor 12y ago
  >It wasn't the single cause, but it was a major player. It wasn't a cause at all, as I pointed out above (with citations to the relevant studies). The line you keep spinning is the same line used by the banks as they tried to dodge responsibility for the subprime crisis: blaming it on Congress "forcing" them to lend to black people.
  - protomyth 12y ago
    Wow, bringing race into this? really? Nope, not going to discuss anything with someone who substitutes race to win an argument when we are talking about economics. Unable to pay has nothing to do with race. This is a shameful tactic.
    - crdoconnor 12y ago
      >Wow, bringing race into this? really? The Community Reinvestment Act was at its heart about ending redlining of poor, black neighborhoods. This is not at all a controversial part of the story.

protomyth 12y ago

Yes, the CRA as modified by follow-up legislation. Your [2] actually gets its data from an article in the Orange County Register [3] which claims to do an analysis of a database that they do not provide or reference. A article of history [4] and the numerous WSJ articles provide a pretty clear picture. CRA had some very foolish amendments including some that affected the deployment of ATMs of all things. It wasn't the single cause, but it was a major player. Which brings me back to my original question "Were German banks compelled to make bad loans or was it their failed risk judgement?" 3) http://www.ocregister.com/articles/loans-20542-subprime-banks.html http://www.ocregister.com/articles/loans-20542-subprime-bank... 4) http://www.businessinsider.com/the-cra-debate-a-users-guide-2009-6 http://www.businessinsider.com/the-cra-debate-a-users-guide-...

crdoconnor 12y ago
>It wasn't the single cause, but it was a major player. It wasn't a cause at all, as I pointed out above (with citations to the relevant studies). The line you keep spinning is the same line used by the banks as they tried to dodge responsibility for the subprime crisis: blaming it on Congress "forcing" them to lend to black people.
- protomyth 12y ago
  Wow, bringing race into this? really? Nope, not going to discuss anything with someone who substitutes race to win an argument when we are talking about economics. Unable to pay has nothing to do with race. This is a shameful tactic.
  - crdoconnor 12y ago
    >Wow, bringing race into this? really? The Community Reinvestment Act was at its heart about ending redlining of poor, black neighborhoods. This is not at all a controversial part of the story.