ConservO’Vision and master of the nonanswer

ConserO’Vision where Republicans never take responsibility for anything

Media conservatives baselessly blame Community Reinvestment Act for foreclosure spike

Several conservatives in the media have recently blamed the Community Reinvestment Act (CRA) for the current financial crisis — when, in fact, the CRA does not apply to institutions making what some experts have estimated to be the vast majority of troubled loans underlying the crisis. In a September 28 Boston Globe column, Jeff Jacoby asserted: “The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless. Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to ‘meet the credit needs’ of ‘low-income, minority, and distressed neighborhoods.’ Lenders responded by loosening their underwriting standards and making increasingly shoddy loans.” Likewise, during the September 25 edition of The Radio Factor with Bill O’Reilly, guest Jonathan Hoenig, a regular panelist on Fox News’ Cashin’ In and managing member of Capitalistpig Asset Management LLC, asserted that the CRA “makes banks give loans to bad risks.” Similarly, during the September 25 edition of Fox News’ The O’Reilly Factor, radio host Laura Ingraham said that “the problem here is government intervention in the free markets” and baselessly suggested that 1995 rules strengthening the CRA “pushed all these institutions to lend to minority communities, many were very risky loans.”

Jeff Jacoby, Bill O’Reilly, Laura Ingraham, Jonathan Hoenig are all the the TeeVee saying stuff so it must be true. CRA, according to thse experts at Fox and elsewhere have declared that those with low income, minorities and “distressed neighborhoods” must have all, or at least most of them defaulted on their loans. Thus the housing and Wall Str crisis. CRA suffering that kind of default rate would make CRA loans unprofitable. Well, according to a report ordered by Alan Greenspan when he was head of the Federal Reserve that is not the case. In the summary to The Performance and Profitability of CRA-Related Lending Report (pdf)

Although much is known about the ways in which banking institutions have responded to
the CRA and about the volumes of CRA-related loans they have extended, little is known about
the performance and the profitability of such lending. To learn more about the performance and
profitability of lending activities undertaken in conformance with the CRA, the Congress, through the Gramm-Leach-Bliley Act of 1999, directed the Board of Governors of the Federal Reserve System (the Board) to “conduct a comprehensive study . . . of the Community Reinvestment Act of 1977, which shall focus on (1) the default rates; (2) the delinquency rates; and (3) the profitability; of loans made in conformity with such Act, and report on the study” to the Senate and House Banking Committees. The Board was directed to make the report and supporting data available to the public.

First CRA loans were not just for the purchase of a home, but also for home improvement, community development lending and small business loans.

* A caveat from the report and note that if the Fed doesn’t know then none of O’Reilly’s expert’s know: Survey responses and follow-up telephone contacts suggest that banking institutions generally do not separately track the performance and profitability of CRA-related lending. Except for community development lending, fewer than half of the banking institutions that responded to the survey provided quantitative information on the performance of CRA-related lending

*Whether measured on a per institution or per CRA dollar basis, virtually all banking institutions providing responses, regardless of asset-size category, report that their CRA-related small business lending is either profitable or marginally profitable (figures 5 and 6).

*On a per institution basis, nearly all banking institutions that provided responses, regardless of asset-size category, report that their community development lending is either profitable or marginally profitable (chart 7a).

*Survey responses indicate that home purchase and refinance lending is profitable or  marginally profitable for most institutions on a per institution basis (figure 1)

Summary of data tables,

Chart 1a: Profitability of CRA-related Home, Purchase and Refinance Lending, (percent of institutions)
Profitable
50%
Marginally
Profitable
32%
Break Even
3%
Unprofitable
8%
Marginally
Unprofitable
7%

Chart 1b: Profitability of Overall Home Purchase, and Refinance Lending, (percent of institutions)
Profitable
70%
Marginally
Unprofitable
0%
Unprofitable
2%
Break Even
4%
Marginally
Profitable
24%

Chart 2b: Profitability of Overall Home Purchase, and Refinance Lending, (weighted by percent of CRA dollars originated)
Profitable
91%
Unprofitable
0%
Marginally
Profitable
8%
Break Even
1%
Marginally
Unprofitable
0%

Its the usual drill when it comes down to any issue and Republicans accepting responsibility for their lack of ethics, out right law breaking or generally abysmal governing skills, they blame shift. I can put up all the statistics in the world and it just won’t break through the bubble.

Kind of funny. A Republican pol in Alaska on Sarah Palin, Easy answer…..

After reading my opinion column in the Anchorage Daily News this morning, fellow Alaskan blogger Tom Lamb, asks “Why is it that Andrew Halcro who is so critical of Palin, wanted to be on the same ticket with her.”

That’s an easy answer; because I believed Sarah Palin had the qualifications to be a terrific Lt. Governor. And watching her struggle to give coherent answers on the national stage, I believe more today than ever before she has the qualifications to be a terrific Lt. Governor.

The same gentleman wrote this piece for the CSM, What it’s like to debate Sarah Palin, I know firsthand: She’s a master of the nonanswer.

“Andrew, I watch you at these debates with no notes, no papers, and yet when asked questions, you spout off facts, figures, and policies, and I’m amazed. But then I look out into the audience and I ask myself, ‘Does any of this really matter?’ ” Palin said.

While policy wonks such as Biden might cringe, it seemed to me that Palin was simply vocalizing her strength without realizing it. During the campaign, Palin’s knowledge on public policy issues never matured – because it didn’t have to. Her ability to fill the debate halls with her presence and her gift of the glittering generality made it possible for her to rely on populism instead of policy.

Palin is a master of the nonanswer. She can turn a 60-second response to a query about her specific solutions to healthcare challenges into a folksy story about how she’s met people on the campaign trail who face healthcare challenges. All without uttering a word about her public-policy solutions to healthcare challenges.

Which is what Palin did with Katie Couric.

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