Submitted by StartThinkingPlease (not verified) on March 22, 2009 - 1:59pm.
I have personally been involved in "mystery shopping" banks for CRA purposes, and have never seen or heard of "maybe if you were black and made less money". In FACT, in analyzing CRA performance, what one does is find pairs of prospective borrowers as ALIKE as possible, and see if they are treated differently. Limbaugh may spout stuff like this, but in fact, it doesn't happen.
Facts are that CRA loans written by covered institutions clearly outperform subprime loans created by non-covered institutions by orders of magnitude. Facts are that greed and a thirty year bi-partisan agreement to lay off regulating the financial services industry effectively, and to allow the regulatory disparities between different sectors of the financial services market, created this. It is complicated. Lots of contributing factors, and you actually have to THINK instead of just finding a way to blame whatever party you don't like--I know this is difficult in America today (thinking, that is), but there is not a simple answer.
I've worked in commercial banking, investment banking, and several employers have had mortgage operations--I've seen CRA compliance at work and I have seen rampant greed where there was no CRA concern. I've seen stupidity in both arenas.
Let's stop trying to find the simple, kindergarten level answer, and worry about A) fixing the mess and B) making financial services regulation more coherent so this can't happen again.
Not true
I have personally been involved in "mystery shopping" banks for CRA purposes, and have never seen or heard of "maybe if you were black and made less money". In FACT, in analyzing CRA performance, what one does is find pairs of prospective borrowers as ALIKE as possible, and see if they are treated differently. Limbaugh may spout stuff like this, but in fact, it doesn't happen.
Facts are that CRA loans written by covered institutions clearly outperform subprime loans created by non-covered institutions by orders of magnitude. Facts are that greed and a thirty year bi-partisan agreement to lay off regulating the financial services industry effectively, and to allow the regulatory disparities between different sectors of the financial services market, created this. It is complicated. Lots of contributing factors, and you actually have to THINK instead of just finding a way to blame whatever party you don't like--I know this is difficult in America today (thinking, that is), but there is not a simple answer.
I've worked in commercial banking, investment banking, and several employers have had mortgage operations--I've seen CRA compliance at work and I have seen rampant greed where there was no CRA concern. I've seen stupidity in both arenas.
Let's stop trying to find the simple, kindergarten level answer, and worry about A) fixing the mess and B) making financial services regulation more coherent so this can't happen again.