In early 1993 Bill Clinton ordered new regulations for the CRA which would increase access to mortgage credit for inner city and distressed rural communities. The new rules went into effect on January 31, 1995 and featured the following provisions:

1: Federal home-loan data to be broken down by neighborhood, income group, and race;

2: Community groups were granted the opportunity to complain when banks were not loaning enough to specified neighborhood, income group, and race. (The Obama – Acorn connection)

3: Community groups that marketed loans to targeted groups could collect fees from the banks.

According to a Treasury Dept. study of lending trends in 305 U.S. cities between 1993 and 1998 467 billion dollars in mortgage credit flowed from CRA-covered lenders to eligible borrowers. The number of CRA mortgage loans increased by 39 percent. Other loans increased by only 17 percent.

We hear lots of talk about the government forcing banks into making bad loans. Matthew, in this blog said:

Activist groups were encouraged to agitate by the Carter-era Community Reinvestment Act, 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. Banks that paid enough — whatever that means — got left alone, but banks that didn’t, got their legs broken.

I never hear anyone however, talking about HOW the govt was able to force the banks to do this. If you think about it for a moment, it’s puzzling. Why would the banks acquiesce ? And what constitutional authority would the govt have to force them to do so?

The answer that I’ve heard from several knowledgeable insiders in the banking community is that the govt used extorionist tactics to achieve this, by threatening to withdraw their FDIC certification if they didn’t comply. Without their FDIC membership, nobody would put any money into the bank.

So when Michelle Bachmann said we now have a gangster govt, perhaps it;s best for us to remember that our government has been a pack of gangsters for longer than we suspect.

In early 1993 Bill Clinton ordered new regulations for the CRA which would increase access to mortgage credit for inner city and distressed rural communities. The new rules went into effect on January 31, 1995 and featured the following provisions:

1: Federal home-loan data to be broken down by neighborhood, income group, and race;

2: Community groups were granted the opportunity to complain when banks were not loaning enough to specified neighborhood, income group, and race. (The Obama – Acorn connection)

3: Community groups that marketed loans to targeted groups could collect fees from the banks.

According to a Treasury Dept. study of lending trends in 305 U.S. cities between 1993 and 1998 467 billion dollars in mortgage credit flowed from CRA-covered lenders to eligible borrowers. The number of CRA mortgage loans increased by 39 percent. Other loans increased by only 17 percent.

We hear lots of talk about the government forcing banks into making bad loans. Matthew, in this blog said:

Activist groups were encouraged to agitate by the Carter-era Community Reinvestment Act, 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. Banks that paid enough — whatever that means — got left alone, but banks that didn’t, got their legs broken.

I never hear anyone however, talking about HOW the govt was able to force the banks to do this. If you think about it for a moment, it’s puzzling. Why would the banks acquiesce ? And what constitutional authority would the govt have to force them to do so?

The answer that I’ve heard from several knowledgeable insiders in the banking community is that the govt used extorionist tactics to achieve this, by threatening to withdraw their FDIC certification if they didn’t comply. Without their FDIC membership, nobody would put any money into the bank.

So when Michelle Bachmann said we now have a gangster govt, perhaps it;s best for us to remember that our government has been a pack of gangsters for longer than we suspect.

In early 1993 Bill Clinton ordered new regulations for the CRA which would increase access to mortgage credit for inner city and distressed rural communities. The new rules went into effect on January 31, 1995 and featured the following provisions:

1: Federal home-loan data to be broken down by neighborhood, income group, and race;

2: Community groups were granted the opportunity to complain when banks were not loaning enough to specified neighborhood, income group, and race. (The Obama – Acorn connection)

3: Community groups that marketed loans to targeted groups could collect fees from the banks.

According to a Treasury Dept. study of lending trends in 305 U.S. cities between 1993 and 1998 467 billion dollars in mortgage credit flowed from CRA-covered lenders to eligible borrowers. The number of CRA mortgage loans increased by 39 percent. Other loans increased by only 17 percent.

We hear lots of talk about the government forcing banks into making bad loans. Matthew, in this blog said:

Activist groups were encouraged to agitate by the Carter-era Community Reinvestment Act, 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. Banks that paid enough — whatever that means — got left alone, but banks that didn’t, got their legs broken.

I never hear anyone however, talking about HOW the govt was able to force the banks to do this. If you think about it for a moment, it’s puzzling. Why would the banks acquiesce ? And what constitutional authority would the govt have to force them to do so?

The answer that I’ve heard from several knowledgeable insiders in the banking community is that the govt used extorionist tactics to achieve this, by threatening to withdraw their FDIC certification if they didn’t comply. Without their FDIC membership, nobody would put any money into the bank.

So when Michelle Bachmann said we now have a gangster govt, perhaps it;s best for us to remember that our government has been a pack of gangsters for longer than we suspect.