Gramm-Leach-Bliley has helped more than it has hurt. Thanks to what this legislation now allows, mega-banks, not taxpayers, were able to bail out some of the lesser banks. Unfortunately, it looks like we’ll still be on the hook for others.

Gramm-Leach-Bliley was put into place by a Republican majority, initiated by Republican congressmen. Yes, Clinton signed it, but it was un-vetoable anyway because of its backing by Congress. This enabled banks to become super-banks that did everything – invest, issue credit, make mortgage loans, etc. So, if something went very wrong, it went wrong in a BIG WAY. And it made the whole business so complicated that it no doubt affected oversight.

The CRA was implimented by Democrats. It had a good intention, of course, of making things fair for everyone way back when it was first put into place. BUT, it was screwed up by poor implementation. It should have been clear that allowing fringe groups to rate banks would cause banks to have to “buy their favor” and do irresponsible things along the way if it wanted to do something new like merge (which seems like in the past 10 years is all they ever want to do).

And, of course, bank loan officers who wanted more and more mortgage loans and consumers who were giddy that they could flip a house and make big bucks are to blame also. They were GREEDY. As a person who purchased in the past year, I have little sympathy for those who willingly went into ARM’s beyond their means and raised home prices in the past decade way beyond what a lot of honest families could afford. Prey of predatory lenders are another story, but it seems like it will take a lot of work to disentangle the two groups.

In conclusion, if we didn’t have CRA, we wouldn’t have had the subprime loan problems. If we didn’t have the G-L-B Act, we could have a subprime loan problem or any other financial debacle and it wouldn’t be such a big catastrophe because it might have been caught earlier and wouldn’t be affecting so many financial sectors at once.

(By the way, can we please keep Rove and Co. and empty suit Obamas out of the comments. That just dumbs down the conversation. After all, we are self-proclaimed intellectuals, are we not?).

For anyone to say the CRA is not a major contributor to this mess is bizarre. If you truly believe what you wrote then you are as naive as the candidate that you support.

No one action or law brought about this financial crises. It evolved over time. However, to attempt to say that the CRA was not a part of the problem is just intellectually dishonest.

Banks, investment banks, and mortgage houses can always have pressure place upon by the government. You discount the individual States and the regulations that they place and the regulations of the Fed and beyond that even Freddie and Fannie and how they could influence lenders.

This is a very complex issue facing America and your weak attempts to make it a partisan issue shows your ignorance of finance, economics, and politics. Karl Rove? That comment alone shows you are a political hack devoid of any intellect beyond your fanatical loyalty to the great empty suit known as Barack Obama.

The basis behind the claim that the CRA caused the subprime crisis is relatively simple. The Community Reinvestment Act requires banks to make loans in the low- and moderate-income areas that they serve. Everyone knows that low- and moderate-income families are going to be bad risks, so this means that the banks are being forced to make subprime loans. Therefore, the CRA is the cause of the current problem.

The thing is, very little of this is true.

Let’s start with the Community Reinvestment Act and the reasons that it was passed. For decades prior to the law’s passage, banks engaged in a process known as redlining, where they declined to write loans in certain geographic areas – typically low-income areas with large minority populations. They did not decline to write bad loans in these areas; they refused to write any loans at all. For example, in 1975 the largest bank in the Bronx wrote a grand total of 32 loans in the entire borough. No loans means no new businesses, no new housing, no opportunity.

The CRA simply requires that any federally-insured bank that accepts deposits from people living in a certain area also write loans in that area. That’s all. It does not require a fixed number or percentage of loans to be made, and it does not require that the banks relax their lending criteria in CRA areas. In fact, the law specifies that federal agencies evaluating the covered banks:

“assess the institution’s record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, CONSISTENT WITH THE SAFE AND SOUND OPERATION OF SUCH INSTITUTION” [emphasis added]

Simply put, the claim that the CRA forces banks to make subprime loans is absolute nonsense. The law contains a clause that protects banks from having to take on unsafe levels of risk. It was also passed in 1977, more than a quarter-century before the current crisis began to unfold. But what about the rest of the claim. Isn’t there some truth to the claim that anyone lending money in a poor area is going to have to be willing to lend to subprime borrowers?

Apparently not. According to the President of the Federal Reserve Bank of San Francisco, over 80% of CRA loans made in 2006 by banks covered by the act are prime loans. Simply put, being poor does not mean that you are irresponsible, or that you have bad credit. It just means that you don’t have a high income or a lot of money. There is no shortage of responsible poor people out there, who have good enough credit and enough savings to qualify for a traditional, prime home loan.

It’s not the banks covered by CRA that are making most of the bad loans. They account for about a quarter of all subprime loans. Bank subsidiaries that are not necessarily subject to CRA account for about another quarter. The rest – representing slightly more than half of all subprime loans – were made by the mortgage companies.

To sum up, the Community Reinvestment Act was signed more than 25 years before the current subprime crisis erupted. Banks, which are the only financial institutions covered by the CRA, have made a little less than a quarter of the riskier loans. These riskier loans only account for 20% of the total number of CRA-eligible loans that they have been made. The majority of the subprime loans were made by mortgage companies that do not have to comply with the CRA, and 40% of the mortgage loans initiated in the mortgage company sector in 2006 were subprime. The claim that the CRA caused the subprime crisis is nothing short of asinine.

This latest “spin” is nothing less than an attempt to, once again, blame minorities for something the GOPers did. And since Barack “Hussein” Obama is a minority, you at Rove & Co. hope it will be that much more readily believed. Good luck in Novemeber…you going to need it.

Worse, that Washington cabal along with their minions will fix the problem by creating a bigger problem. I suspect they believe that shoe will drop when they’re out of office and either deceased or living in retirement with the loot they amassed for all their years of unfaithful service.

An unpleasant side note to this saga is that with every twist and turn, problem and solution, the Imperial Federal Government gets more powerful, more intrusive and more controlling of everyone’s life. Somewhere along the way the US Constitution has been ignored or forgotten.

In sum: this doesn’t bode well for the nation.