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Posted by: hyperbola 1 year, 1 month ago
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hyperbola1 year, 1 month ago
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Well Jose, that is another of the lying chants being pushed by the GOP at present. It is every bit as much a lie as the ACORN craapppp.
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GOP lies about affordable housing initiatives and the financial crisis
Conservative and other media figures, echoing a reported strategy on the part of Republicans, have attempted to deflect blame
for the financial crisis onto proponents of the expansion of affordable housing and legislation and institutions created to effect that expansion. The attacks are premised on several myths and falsehoods and, in the case of CRA and attacks on minority lending, have taken on a racial tinge.
MYTH: The 1977 Community Reinvestment Act forced lenders into irresponsible lending. ....
The suggestion that the financial crisis was caused by banks lending irresponsibly to comply with the CRA is widely discredited. According to housing experts, a large number of subprime loans were not made under the CRA, which applies only to depository institutions. A study released earlier this year by a law firm specializing in CRA compliance estimated that in the 15 most populous metropolitan areas, 84.3 percent of subprime loans in 2006 were made by financial institutions not governed by the CRA. Moreover, Janet Yellen, president and CEO of the Federal Reserve Bank of San Francisco, stated in a March 2008 speech that "studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households".
MYTH: Excessive lending to undocumented immigrants is responsible for the financial crisis....
MYTH: Congressional Democrats, led by Barney Frank, opposed strengthening oversight over Fannie and Freddie...
In fact, Frank did not "s[i]t by." Frank's efforts to enhance regulatory oversight on Fannie Mae and Freddie Mac include: ....
MYTH: Fannie Mae and Freddie Mac caused the "current financial mess"...
...in a 2006 Securities and Exchange Commission filing (available here) covering its activities in 2004, Fannie Mae stated: "We did not participate in large amounts of these non-traditional mortgages in 2004 and 2005." In the report, Fannie Mae also noted the growth of subprime lending and reported, "These trends and our decision not to participate in large amounts of these non-traditional mortgages contributed to a significant loss in our share of new single-family mortgage-related securities issuances to private-label issuers during this period." ...
...Investment banks created a demand for subprime loans because they saw it as a new asset class that they could dominate. They made subprime loans for the same reason they made other loans: They could get paid for making the loans, for turning them into securities, and for trading them-frequently using borrowed capital....-
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hyperbola1 year, 1 month ago
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MYTH: Sen. Barack Obama's campaign has significantly more ties to Fannie Mae and Freddie Mac than does John McCain's...
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MYTH: Democrats sought to divert funding in the Emergency Economic Stabilization Act to ACORN....
MYTH: Former President Clinton has blamed Democrats for the financial crisis....
... Clinton said, "I think the biggest mistake, by the way, that contributed to the current circumstance that almost nobody talks about, is the repeal after decades of something called the uptick rule, which allowed the hedge funds, heavily leveraged, and others to just drive down the market without any kind of automatic stoppers." In a separate interview aired that day with Matt Lauer, co-host of NBC's Today, Clinton stated of the financial situation: "[T]his thing really took off when the SEC, under this administration, exercised less oversight and they got rid of something called the uptick rule, which enabled betting down on housing stocks to go crazy."
The uptick rule, which was created in 1938, was a securities trading rule that regulated market short selling, the act of selling a stock that an investor does not own (but borrows from a broker or someone else) in anticipation that the stock's price will decrease. After a June 13, 2007, decision that became effective July 3, 2007, the SEC issued a final rule that repealed the uptick rule.
http://www.propeller.com/story/2008/10/12/gop-lies...
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