We need more bureaucrats to strong-arm banks into doing the stupid things that got America and the rest of the world into this colossal financial mess in the first place, argues the Obama administration.
Well, the administration didnâ€™t use those words exactly, but in the interests of greater governmental transparency maybe it should have.
Thatâ€™s because there is no doubt that the Carter-era Community Reinvestment Act (CRA) and other misguided government policies helped to create the subprime mortgage bubble that violently burst and that continues to wreak havoc on the worldâ€™s financial markets. CRA allowed activists to blackmail lenders into handing out mortgages to people with little regard for their ability to keep up payments.
Yet the Obama administration is now demanding that the bank-killing CRA, which in practice has been used to emphasize a largely race-based version of financial so-called social justice at the expense of sound banking practices, be strengthened.
The administration laid out its counterintuitive position in the Treasury Departmentâ€™s new white paper, â€œFinancial Regulatory Reform: A New Foundation,â€ which calls for the creation of a new super-duper-regulator, the Consumer Financial Protection Agency (CFPA).
Another possible name for the measure could be the ACORN Activist Full Employment Act. The name would make sense because such legislation would help to keep the venal poverty predators at ACORN and similar groups — such as the Greenlining Institute, the National Council of La Raza, Neighborhood Assistance Corporation of America (NACA), and the RainbowPUSH Coalition — very busy.
The name is also appropriate because activist groups were encouraged to agitate by the CRA, which enshrined in law a kind of lending protection racket. Banking regulators were given the power to make trouble for banks that failed to lend enough money to so-called underserved communities. Spurred on by community organizers, banks that paid enough — whatever that means — got left alone, but banks that didnâ€™t, got their legs broken.