Posts Tagged ‘Community Reinvestment Act’

Social engineering: National suicide

February 9, 2012 Leave a comment

Social engineering by government always ends in disaster.

Social engineering occurs when government passes laws and regulations that force citizens to behave the way government thinks they should behave. Prohibition is a great example of social engineering. In 1919, government decided that its citizens should not drink “intoxicating liquors.” This “government-knows-best” idea produced more than a decade of lawlessness far worse than citizen intoxication. Prohibition was repealed in 1933.

Free people in a free market always produce the best products, most efficiently, at the lowest price. Every time government “engineering” intrudes into the market, products, efficiency, price – and consumers – ultimately suffer.

Social engineering is always proposed with the best of intentions and sold with grandiose utopian promises. The promises are rarely realized, and the unintended consequences are never anticipated.

Among the goals of the social engineers in the 1970s was a “right” to affordable housing. A U.N. treaty set forth this right and Congress quickly enacted the Community Reinvestment Act, which required lending institutions to extend loans to people who would not qualify for a loan in a free market. Social engineers in the Clinton administration were not satisfied with the number of loans made to unqualified people and further intruded into the free market by further relaxing lending standards.

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Barry wants banks to make more bad loans

May 11, 2011 Leave a comment

Barry wants banks to make more bad loans

Barry wants banks to make more bad loans

Bloomberg Business Week ^ | 5/11/2011 | Clea Benson

Posted on Wednesday, May 11, 2011 2:41:03 PM by Astronaut

Community activists in St. Louis became concerned a couple of years ago that local banks weren’t offering credit to the city’s poor and African American residents. So they formed a group called the St. Louis Equal Housing and Community Reinvestment Alliance and began writing complaint letters to federal regulators. Apparently, someone in Washington took notice. The Federal Reserve has cited one of the group’s targets, Midwest BankCentre, a small bank that has been operating in St. Louis’s predominantly white, middle-class suburbs for over a century, for failing to issue home mortgages or open branches in disadvantaged areas.

Although executives at the bank say they don’t discriminate, Midwest BankCentre’s latest annual report says it is in the process of negotiating a settlement with the U.S. Justice Dept. over its lending practices. Lawyers and bank consultants say regulators and the Obama Administration are scrutinizing financial institutions for a practice that last drew attention before the rise of subprime lending: redlining.

The term dates from the 1930s, when the Federal Housing Administration drew up maps using red ink to delineate inner-city neighborhoods considered too risky for lending. Congress later passed laws banning lending discrimination on the basis of race and other characteristics.

(Excerpt) Read more at …

via BLOGGER: GUNNY.G.1984.+: Barry wants banks to make more bad loans.


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