Submitted by GreyGeek (not verified) on November 25, 2008 - 5:06pm.
Ten years ago, Andrew Cuomo, Clinton's Housing & Ubran development secretary, made an announcement of a $2.1 BILLION "agreement" against Citi Bank for not giving loans to people who cannot afford them. Hear Cuomo agree that this suit forces the bank to give loans to people who would not qualify for them if the loans were based on good credit ratings. He also agrees that the CRA loans will INCREASE the risk of losses the bank will be exposed to.
Now the other 80% of the banks who weren't "under the law" could see the writing on the wall - give the loans or risk getting sued by either the government or ACORN.
So, claiming that the CRA didn't cause the meltdown because it only applied to 20% of the banks is disingenuous at best, deliberate lies at worse.
IF you were the CEO of a small bank in middletown, USA, and you saw ACORN harassing the CEO of another small bank, picketing their house, harassing their family and making harassing phone calls, and then the Feds SUE a branch of the BIG BANK for not complying with CRA and ancillary laws, what would you do, especially since you were told that the FHA, Fannie May and Freddit Mac would guarantee the loans? Some choice: law suits and fines, or profit. A no brainer.
It's like the current interest rate debacle. To generate taxable income, Delaware passed laws allowing businesses out of state to form corporations in state, and also passed laws allowing interest rates on credit cards and loans to climb to levels the other 49 states had declared as exorbitant and illegal usury. Not to be outdone, and in need of tax revenues, South Dakota followed suit. Pretty soon other states were noticing that their tax revenues were declining as a result, so they soon relaxed their laws on usury. Now we have "check cashing" stores in most states that charge 452% interest rates for those who cannot afford to pay the credit card companies 32% rate. And, to make things worse, the credit card companies have modified their terms so egregiously that hair triggers, which the companies can set off themselves, are now in place, guaranteeing that the "low introductory rate" of 5% or 3% or even 0% can soon be jacked up to 15%, then 18%, then 32%.
Were the states "being greedy" or just trying to stay alive?
Shall we discuss the State Lotteries, which are nothing less than taxes on the poor, and in which the state and federal governments are 66% partners?
CRA not responsible? In a pig's eye.
Ten years ago, Andrew Cuomo, Clinton's Housing & Ubran development secretary, made an announcement of a $2.1 BILLION "agreement" against Citi Bank for not giving loans to people who cannot afford them. Hear Cuomo agree that this suit forces the bank to give loans to people who would not qualify for them if the loans were based on good credit ratings. He also agrees that the CRA loans will INCREASE the risk of losses the bank will be exposed to.
http://www.youtube.com/watch?v=ivmL-lXNy64
Now the other 80% of the banks who weren't "under the law" could see the writing on the wall - give the loans or risk getting sued by either the government or ACORN.
So, claiming that the CRA didn't cause the meltdown because it only applied to 20% of the banks is disingenuous at best, deliberate lies at worse.
IF you were the CEO of a small bank in middletown, USA, and you saw ACORN harassing the CEO of another small bank, picketing their house, harassing their family and making harassing phone calls, and then the Feds SUE a branch of the BIG BANK for not complying with CRA and ancillary laws, what would you do, especially since you were told that the FHA, Fannie May and Freddit Mac would guarantee the loans? Some choice: law suits and fines, or profit. A no brainer.
It's like the current interest rate debacle. To generate taxable income, Delaware passed laws allowing businesses out of state to form corporations in state, and also passed laws allowing interest rates on credit cards and loans to climb to levels the other 49 states had declared as exorbitant and illegal usury. Not to be outdone, and in need of tax revenues, South Dakota followed suit. Pretty soon other states were noticing that their tax revenues were declining as a result, so they soon relaxed their laws on usury. Now we have "check cashing" stores in most states that charge 452% interest rates for those who cannot afford to pay the credit card companies 32% rate. And, to make things worse, the credit card companies have modified their terms so egregiously that hair triggers, which the companies can set off themselves, are now in place, guaranteeing that the "low introductory rate" of 5% or 3% or even 0% can soon be jacked up to 15%, then 18%, then 32%.
Were the states "being greedy" or just trying to stay alive?
Shall we discuss the State Lotteries, which are nothing less than taxes on the poor, and in which the state and federal governments are 66% partners?