Dateline 1999: Impact of the CRA
A Look Back Courtesy of LA Times
There has been much debate about the impact of the Community Reinvestment Act (CRA) on the home mortgage crisis. A libertarian friend of mine discovered this 1999 article by Ronald Brownstein at the LA Times of the proud achievements under the CRA during the Clinton presidency. This article contains references to the contributions of Clinton, Fannie and Freddie, and Andrew Cuomo. It is pointed out that in “1992, Congress mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers.” Note the date is 1992, when the Democrats had control of Congress.Brownstein promotes how home ownership among minorities increased substantially:
It’s one of the hidden success stories of the Clinton era. In the great housing boom of the 1990s, black and Latino homeownership has surged to the highest level ever recorded. The number of African Americans owning their own home is now increasing nearly three times as fast as the number of whites; the number of Latino homeowners is growing nearly five times as fast as that of whites.
and touts its huge gains:
All of this suggests that Clinton’s efforts to increase minority access to loans and capital also have spurred this decade’s gains. Under Clinton, bank regulators have breathed the first real life into enforcement of the Community Reinvestment Act, a 20-year-old statute meant to combat “redlining” by requiring banks to serve their low-income communities. The administration also has sent a clear message by stiffening enforcement of the fair housing and fair lending laws. The bottom line: Between 1993 and 1997, home loans grew by 72% to blacks and by 45% to Latinos, far faster than the total growth rate.
Now, you ask, why would these gains happen? Well, it’s those two alphabet agencies again:
Lenders also have opened the door wider to minorities because of new initiatives at Fannie Mae and Freddie Mac–the giant federally chartered corporations that play critical, if obscure, roles in the home finance system.
However, all that being good, the bureaucrats were still not satisfied. HUD pushed for more loans to minorities. It was supposedly a known fact that discrimination against minorities still existed in the banking industry, and that the government needed to force bankers into making loans that they preferred not to.
We conservatives need to remember that while the liberals and progressives may attempt to rewrite history, once an item is printed, it is permanent. And with google, finding the artifacts is more possible than ever.