Blaming the banking industry mess on the Community Reinvestment Act, blacks, minorities and left wing Democrats is short-sighted at best. Supporting those arguments with twisted "facts" is irresponsible.
The Community Reinvestment Act was passed in 1977 and basically said a bank cannot refuse to do business with a community because it does not like the area. The CRA strongly encourages banks to decide loans based on sound banking practices, like credit worthiness and work history, and not on an address. The CRA never encouraged or required sub-prime lending or lending to anyone who wasn't credit worthy. Those practices are the sole responsibility of a greedy industry with little regulatory oversight. The revisions requested by President Clinton was to reduce paperwork and to make public comment and participation in a banks CRA rating easier.
Secondly, Fannie Mae and Freddie Mac were not created to facilitate any loans for the CRA. Fannie Mae, the Federal National Mortgage Association, was established in 1938 as part of the New Deal to help the housing market recover from the Depression. Fanny Mae was privatized in 1968 to remove it from the federal budget. Fannie instead became a governent sponsored enterprise with financial protection from the federal government, exemption from SEC oversight, exemption from income tax and a line of credit from the U.S. Treasury. Freddie Mac, The Federal Home Mortgage Corp., was established as a GSE in 1970 to prevent a monopoly in the home mortgage market.
Greed was the driving force in this disaster with blame to spread in several quarters. I sincerely hope the banking industry uses sound judgement in the future, but I doubt their ability to regulate themselves with dollar signs dancing in their eyes. I hope money lending is never returned to a discriminatory process as advocated by an earlier letter.