On Friday, Investor’s Business Daily posted a story about some recent documents released by the Clinton Library. These documents actually tell the correct story about the cause of the 2008 financial crash. I have posted stories about the cause of that crash before that included the YouTube video below:
The video is a few years old, but it is still worth watching if you have not seen it.
The article at Investor’s Business Daily explains the role that the Community Reinvestment Act (CRA) played in creating the housing bubble. The CRA pressured banks to make risky home loans.
The article reports:
Clinton’s changes to the CRA let ACORN use the act’s ratings to “target merging firms with less-than-stellar records and to get the banks to agree to greater community investment as a condition of regulatory approval for the merger,” White House aide Ellen Seidman wrote in 1997 to Clinton chief economist Gene Sperling.
“Community groups have come to recognize how terribly powerful CRA has been as a tool for making credit available in previously underserved communities,” Seidman added.
Seidman later boasted that Clinton’s 1995 CRA revisions created not only the subprime mortgage market but also the subprime securities market. Of course, subprime loans and their high default rates ruined minority neighborhoods when the market crashed.
Memos also reveal how Clinton aides held repeal of the Glass-Steagall Act hostage to strengthening the CRA. They gave Republicans deregulation of banking activities in exchange for over-regulating how those banking activities applied to low-income communities.
A 1993 memo, “Racism in Home Lending,” captured the tone of Clinton’s affordable-housing crusade. It proposed coordinating with the Washington Post and Congressional Black Caucus on bank investigations.
These White House papers are smoking-gun evidence of Clinton’s culpability in creating the subprime bubble. The mainstream media’s silence is deafening.
It is entirely possible that Hillary Clinton will run for President in 2016. The role that the Clintons played in the housing bubble and the economic collapse that followed needs to be discussed during her campaign.