That video has got it all wrong. The guy finds one piece of banking regulation way back when and blames it and the dems for the problem? cmon....
The thing about the CRA is that it only covers INSURED BANKS AND THRIFTS. Do you know how many mortgage lenders and investment banks were involved in this crisis that don't fall into that category? The whole video is a joke.
If you want to know about the CRA read this and the quotes from it that follow:
"One issue involves the coverage of the law itself. Because of changes in the industry, and the fact that many financial transactions are now being offered by nonbank service providers and other types of financial entities, some have suggested extending the coverage of the CRA beyond insured banks and thrifts. On the one hand, insured banks and thrifts institutions remain the primary conduit for many financial services, including the full range of deposit account services, and continue to provide capital to communities. For example, the Federal Reserve's 2004 Survey of Consumer Finances reveals that 77 percent of all households with at least one financial relationship identified a commercial bank or a thrift institution as their primary source for financial services, with 93 percent of those respondents acquiring services from a local bank or thrift--that is, one that is located within thirty miles of where they live. Further, the Federal Reserve's 2003 Survey of Small Business Finances indicate that 88 percent of all small businesses identified a commercial bank or thrift as their primary source for financial services, again with 96 percent of those respondents acquiring these services from a local bank or thrift.
On the other hand, institutions not covered by the CRA have become more active over time in the financial services market. Federal Reserve-sponsored surveys of small businesses and consumers document the increased use of nondepository institutions for financial services by small businesses and households. Small businesses surveyed between 1993 and 2003 reported a 14 percent increase in the use of nondepository institutions, and the percentage of households surveyed between 1992 and 2004 that used a nondepository institution nearly doubled to more than 60 percent."
"For example, overall mortgage loans to borrowers in lower-income neighborhoods by CRA covered institutions in their CRA assessment areas has increased from 13.4 percent of their assessment area mortgage loans in 1994 to 16.2 percent in 2006. This change suggests a greater focus on CRA-related lending by covered institutions. Research by Federal Reserve staff has found that such gains in lending appear to have had a tangible beneficial effect on local communities. The research found that the gains in homeownership rates from 1990 to 2000 were higher for neighborhoods deemed to be lower income under the CRA rules than similar neighborhoods that were not.5 Further, Federal Reserve research suggests that CRA covered institutions have been able to extend such loans profitably and that the performance of such loans is about the same as that of other mortgage loans.6"
Less than a 3% increase over a 12 year period in mortgage loans to borrowers in lower-income neighborhoods did NOT cause this whole disaster.
We don't need garbage like that video on this board.
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Poor Tim Russert just rolled over in his grave.
What does that video have to do with anything?
I loved the video..thanks.
Absolutely the best Youtube vid I’ve ever seen.
That video has got it all wrong. The guy finds one piece of banking regulation way back when and blames it and the dems for the problem? cmon....
The thing about the CRA is that it only covers INSURED BANKS AND THRIFTS. Do you know how many mortgage lenders and investment banks were involved in this crisis that don't fall into that category? The whole video is a joke.
If you want to know about the CRA read this and the quotes from it that follow:
http://www.federalreserve.gov/newsevents/testimony/braunstein20080213a.htm
"One issue involves the coverage of the law itself. Because of changes in the industry, and the fact that many financial transactions are now being offered by nonbank service providers and other types of financial entities, some have suggested extending the coverage of the CRA beyond insured banks and thrifts. On the one hand, insured banks and thrifts institutions remain the primary conduit for many financial services, including the full range of deposit account services, and continue to provide capital to communities. For example, the Federal Reserve's 2004 Survey of Consumer Finances reveals that 77 percent of all households with at least one financial relationship identified a commercial bank or a thrift institution as their primary source for financial services, with 93 percent of those respondents acquiring services from a local bank or thrift--that is, one that is located within thirty miles of where they live. Further, the Federal Reserve's 2003 Survey of Small Business Finances indicate that 88 percent of all small businesses identified a commercial bank or thrift as their primary source for financial services, again with 96 percent of those respondents acquiring these services from a local bank or thrift.
On the other hand, institutions not covered by the CRA have become more active over time in the financial services market. Federal Reserve-sponsored surveys of small businesses and consumers document the increased use of nondepository institutions for financial services by small businesses and households. Small businesses surveyed between 1993 and 2003 reported a 14 percent increase in the use of nondepository institutions, and the percentage of households surveyed between 1992 and 2004 that used a nondepository institution nearly doubled to more than 60 percent."
"For example, overall mortgage loans to borrowers in lower-income neighborhoods by CRA covered institutions in their CRA assessment areas has increased from 13.4 percent of their assessment area mortgage loans in 1994 to 16.2 percent in 2006. This change suggests a greater focus on CRA-related lending by covered institutions. Research by Federal Reserve staff has found that such gains in lending appear to have had a tangible beneficial effect on local communities. The research found that the gains in homeownership rates from 1990 to 2000 were higher for neighborhoods deemed to be lower income under the CRA rules than similar neighborhoods that were not.5 Further, Federal Reserve research suggests that CRA covered institutions have been able to extend such loans profitably and that the performance of such loans is about the same as that of other mortgage loans.6"
Less than a 3% increase over a 12 year period in mortgage loans to borrowers in lower-income neighborhoods did NOT cause this whole disaster.
We don't need garbage like that video on this board.
-----------------------------------------------
http://www.pnhp.org/news/2009/october/meet_the_new_health_.php
http://www.youtube.com/watch?v=DQTBYQlQ7yM
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