In 1993 CRA covered institutions made 65% of all LMI (Low and Moderate Income) loans in the country. In 1998 CRA institutes made 63% of LMI loans. You may remember, no subprime leanding crisis during those years. By 2006, CRA institutions made only 22.7% of LMI loans. Also in 2006, CRA institutions only made 11.7% of all LMI and high cost loans (subprime loans). Guess what we had in 2006? That's right a subprime mortgage crisis. As noted in both the above studies. CRA institutions are much more likely to make loans to credit worthy borrowers and that the growth in high cost loans (subprime) loans is almost exclusively due to non-CRA institutions.
Bear did, and CRA did not have anything to do with it.
CRA enforcement changed under the Financial Modernization Act, which also allowed the securitization of loans. However, check the above links carefully. Especially compare the Treasury Department FMA CRA impact baseline report:
http://www.treas.gov/press/releases/docs/crareport.pdf
and
http://www.traigerlaw.com/publications/traiger_hinckley_llp_cra_foreclos...
In 1993 CRA covered institutions made 65% of all LMI (Low and Moderate Income) loans in the country. In 1998 CRA institutes made 63% of LMI loans. You may remember, no subprime leanding crisis during those years. By 2006, CRA institutions made only 22.7% of LMI loans. Also in 2006, CRA institutions only made 11.7% of all LMI and high cost loans (subprime loans). Guess what we had in 2006? That's right a subprime mortgage crisis. As noted in both the above studies. CRA institutions are much more likely to make loans to credit worthy borrowers and that the growth in high cost loans (subprime) loans is almost exclusively due to non-CRA institutions.