Tag Archives: President Bush

JIMMY CARTER’S COMMUNITY REINVESTMENT ACT

How the Community Reinvestment Act oppressed blacks and other people of color

On September 2, I authored an article entitled “My Thoughts on Colin Kaepernick.” My thoughts when I initially learned about Kaepernick’s actions were, how is the United States currently oppressing black people or all people of color, for that matter? Affirmative action programs are still in place which allow blacks to get “bumped up” ahead of whites with respect to employment, promotions, college acceptance, etc. Along that line, Jimmy Carter’s Community Reinvestment Act paved the way for many people to qualify for loans to purchase homes when those same people were not capable of making the house payments. A lot of those folks were black. Furthermore, being able to collect welfare for having a child out of wedlock, a part of Lyndon Johnson’s Great Society, was directed toward blacks in order to keep them voting Democrat.

According to discoverthenetworks.org, in his book, Back to Work, former president Bill Clinton attributed the housing market crisis of 2008 to the greed of banks that were over-leveraged, with too many risky investments, especially in subprime mortgages and securities and derivatives that were spun out of them. Clinton opined that the crash occurred because there was too little government oversight of, and virtually no restraint on, risky loans without sufficient capital to back them up. President Obama attributed the crisis to the failed policies of the days when Wall Street, unencumbered by government regulators, played by its own rules.

Discoverthenetworks.org further indicated that the earliest roots of these government policies can be traced back to the mid-1970s when progressive Democrats in Congress began a campaign to help low income minorities improve their economic condition through homeownership. At that time, the homeownership rates of blacks and Hispanics alike were just above 40%, while the white rate hovered nearly 70%. Because the Congressional Democrats felt that these inequities were evidence of America’s persisting racial injustice, many Democrats pushed for measures to rectify the situation.

Henry Reuss, a far-left McGovern Democrat sponsored the Housing and Community Development Act of 1977. Title VIII of this bill, known as the Community Reinvestment Act (CRA), required each appropriate Federal financial supervisory agency to assess each bank’s record of helping to meet the credit needs of its entire community, including low and moderate income neighborhoods. In other words, this was a mandate for banks to make special efforts to seek out and lend to minority borrowers of meager to modest means. The bill passed with near unanimous Democrat support and was signed into law by President Carter in 1977.

The law was founded upon a principle with far reaching implications that government intervention was necessary to counteract the racist and inequitable nature of American society, including the free market. In the early 1990s, implications of this premise began to “hit the fan” when studies showing disparate mortgage loan approval rates for blacks and whites resulted in sensational media headlines. In 1992, researchers at the Federal Reserve Bank of Boston released the results of a seminal study which found that whites and blacks with equivalent incomes had been denied mortgages at the rates of 17% and 38% respectively.

As a result of the study, then Attorney General Janet Reno warned that no bank would be immune to an aggressive Justice Department campaign to punish discrimination in lending practices. Also, Comptroller of the Currency, Eugene Ludwig told the Senate Banking Committee, “We have to use every means at our disposal to end discrimination and to end it as quickly as possible.”

Media institutions including not only the liberal Boston Globe, but Business Week jumped on the bandwagon with Business Week sporting a headline that read, “There’s no Whites Only Sign, but…”

A second study that was done for the Federal Reserve Bank of Boston showed that black loan applicants not only had greater debt burdens and poorer credit histories than their white counterparts, but also tended to seek loans covering a higher percentage of proper values in question. The later study determined that after correcting for these and other standard credit criteria such as income, net worth, age, education, and probability of employment, the loan rejection gap between racial groups dwindled to 11% for whites and 17% for blacks. By manipulating the numbers, The Boston Federal Reserve Bank report chose to imply that racism played a role in the disparity. For additional statistics, visit DiscoverTheNetworks.org.

The Federal Reserve Board in Washington later re-examined the original Boston Fed Study and found its conclusions difficult to justify. Similarly, Nobel Prize winning economist, Gary Becker, found that the first Boston Fed study had some serious methodological flaws, making its results dubious. Furthermore, in 1988, it was reported that the data used by that study contained literally hundreds of errors via such variables as the net worth of the applicants and the interest rates of the loans they sought. When those data errors were corrected, evidence suggesting that lenders had discriminated against minority borrowers disappeared.

As we all know, Democrats don’t use facts when determining their plans of action, they float on emotions while considering how they, the governing powers, can further intrude into our lives and make us more dependent on big government. Thus, the Clinton administration was determined to transform the CRA from an outreach effort into a strict quota system. Under this new arrangement, if a bank failed to meet its quota for loans to low income minorities, it ran a high risk of failing to earn a satisfactory CRA rating from the FDIC (Federal Deposit Insurance Corporation). Because this could derail bank operations and expansion, the banks had no recourse other than to drastically lower their standards on down payments and underwriting in order to approve many loans even to borrowers with weak credit credentials.

Additional pressure was applied to banks by community organizations such as ACORN and the Greenlining Institute. By accusing banks, however frivolously or unjustly, of having engaged in racially discriminatory lending practices that violated the mandates of the CRA, these groups could stall or prevent banks from expanding or merging as they wished. Moreover, these groups routinely threatened to file lawsuits or negative publicity campaigns against such banks.

As a result of such pressures, CRA commitments, which from 1977 to 1991 had cumulatively totaled just under $9 billion, suddenly jumped to $34 billion in 2991 alone. Then over the next 16 years, those commitments would amount to $6 trillion.

However, the CRA was not the only mechanism designed by government to impose lending quotas on financial institutions. The Department of Housing and Urban Development (HUD) under the leadership of Henry Cisneros, developed rules encouraging lenders to increase their approval rates for loans to minority applicants by a hefty 20% within one year. In 1993, HUD began filing legal actions against mortgage bankers who had turned down a higher percentage of minority applicants than white applicants, regardless of their reasons for doing so. This caused lenders to lower their down payment and income requirements for minorities. Moreover, HUD pressured the government sponsored institutions, Fannie Mae and Freddie Mac, the two largest sources of housing finance in the United States, to earmark a rising number of their own loans for low-income borrowers.

No one supported these reckless lending practices more fervently than Democratic Congressman, Barney Frank, a member of the powerful House Committee on Financial Services. Subsequently in 2004, Frank said that the federal government had probably done too little rather than too much to push Fannie and Freddie to meet the goals of affordable housing.  Democratic Senator Christopher Dodd, chairman of the Senate Banking Committee, called Freddie and Fannie, of the greatest success stories of all time.

It should be noted, though, that some Republicans were also in favor of lower mortgage approval standards. In 2002, the Bush administration pressed Congress to pass the American Dream Down Payment Initiative to subsidize the down payments and closing costs of low income and first time home buyers. After ADDI was enacted, President Bush also pushed Congress to pass legislation permitting the Federal Housing Administration (FHA) to make zero down payment loans at low interest rates to low income individuals.

These political pressures entirely restructured the landscape of the mortgage lending business. Subprime loans, which had constituted just 7% of all mortgages in 2001, accounted for 19% of mortgages by 2006. The situation was exacerbated further by the fact that many banks securitized the risky loans.

The result of these ill-conceived lending practices was a full-blown financial crisis characterized by countless home foreclosures and skyrocketing employment rates. The primary victims of these calamities were non-white minorities of modest means, the very people who were the intended beneficiaries of the CRA, the ADDI, and the aforementioned HUD and FHA policies. As of November 2011, approximately one quarter of all black and Hispanic borrowers had either already lost their homes to foreclosure or were seriously delinquent, compared to just under 12% of white borrowers. These disparities in foreclosure rates were, for the most part, due to African Americans and Hispanics having comparatively poor credit ratings and being disproportionately represented among those who had fallen into the financial trap of the high-priced subprime mortgages encouraged by the CRA and similar government policies.

Is stated by discoverthenetworks.org that the housing market crisis cast a black cloud over what had been one of America’s greatest success stories, the rise of the black middle class. Between 1949 and 1994, the proportion of African Americans in the middle class had nearly quadrupled, from 12% to 44%, an unprecedented advance for any formerly oppressed group in any society on record.

In addition to foreclosures, other indignities suffered by non-white minorities included the loss of jobs and the rising unemployment rates. And if these blows to the black community were not enough, left-wing Democrats, for reasons of promoting economic justice, tried to resurrect the CRA in 2009. In that year, 53 Congressional Democrats sponsored the Community Reinvestment Modernization Act in order to close the wealth gap in the United States by increasing home ownership and small business ownership for low and moderate income borrowers and persons of color. Specifically, the legislation sought to extend the CRA’s strict lending requirements to credit unions, insurance companies and mortgage lenders and to make its mandates more explicitly race-based by applying lower lending standards not only to low and moderate income borrowers, but to any non-white minorities, regardless of income.

Every American, man, woman, and child, was hurt by the Community Reinvestment Act and other  liberal/progressive policies that were put in place over the years since the late seventies, with minorities and people of color being hit the hardest.

While very few people “on the street” can intelligently discuss the Community Reinvestment Act, implemented by the far left and signed into law by President Jimmy Carter, this law, to date, as wreaked more suffering on the American people than any other piece of passed legislation and it took it took nearly a generation after its enactment for the full effects to be realized.

I have often said that the Affordable Care Act AKA Obamacare is the most insidious piece of legislation that has ever been wrought on the American people and I sticking to my statement. It took thirty years for the American people to realize the full results of the Community Reinvestment Act. What is in store for the American people thirty years from now?

Note: The facts and substances of this article originated from the website, http://www.discoverthenetworks.org.

 

 

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BUSH EMAIL SCANDAL VS. HILLARY EMAIL SCANDAL

Some liberals are whining with respect to the FBI’s findings on the Hillary Clinton email scandal, citing the Bush email scandal of 2007. They’re lamenting that the situations are similar and the Bush email scandal didn’t get near the press coverage as Hillary’s email scandal.

Just because they were both email scandals, doesn’t make them similar. In fact, there are many differences. And while the Bush email scandal was certainly embarrassing, it pales in comparison to Hillary’s email scandal.

obama-clintons

The Bush Email Scandal:

According to politifact.com, in March 2007, eyes were on then-Attorney General Alberto Gonzales after the administration unexpectedly fired eight U.S. attorneys. Congress, recently taken over by Democrats, investigated the firings, alleging that the administration had cropped the prosecutors for political reasons.

Over the course of the investigation, it came out that some White House officials had conducted White House business over private email accounts set up on a server through the Republican National Committee. The officials had used the private domain gwb43.com, a server run by the RNC. The White House later admitted that some internal White House emails conducted on the RNC server might have been lost. Democrats in Congress accused the administration of purposefully circumventing recordkeeping processes, while the White House said staffers were supposed to use the RNC emails solely for political affairs, not official business.

Two years later, it was revealed that potentially 22 million emails were deleted, which was considered by some to be a violation of the Presidential Records Act.  Supposedly, the deleted emails were recovered from archives.

The Two Controversies Compared:

The Bush administration had two email accounts, one for official government business and another for RNC business. The RNC email server was not a home-grown system that President Bush installed in his home as was Hillary’s.

As Secretary of State and as a Senator, she signed a confidential agreement that all government emails would be sent and received through an official government account.  When she was Secretary of State, she used only the homegrown server set up in her home, a server which she personally had installed, for all her business as Secretary of State, and never used State Department email. By doing this, she put U.S. secrets at risk and her private email server was hacked by at least one person from a foreign government.

Furthermore, when the Bush email scandal came to light, Hillary Clinton said, “Our constitution is being shredded. We know about the secret White House email accounts. It is a stunning record of secrecy and corruption. Yet, she tells the whole world that she did nothing wrong.

All accounts of the Bush email scandal indicated that the president himself, was not directly involved. Instead, higher up White House officials, including Karl Rover were the ones implicated. Also, this controversy arose in 2007, the last phase of the Bush administration. When Hillary’s email scandal made the news, she was a candidate for President.

Will any liberals read the above? Perhaps. Will they understand it? Of course not!

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ON NET NEUTRALITY

The Federal Communications Commission past a set of Internet regulations known as “Net Neutrality” by a vote of 3-2 yesterday, February 26, 2015. What is Net Neutrality and what’s it going to mean to me are the questions most asked by private citizens such as myself.

According to USA Today, Net Neutrality is the principle that Internet Service Providers should give consumers access to all legal content and applications on an equal basis, without favoring some sources and blocking others. It prohibits ISPs from charging content providers for speedier delivery of their content on “fast lanes” and deliberately slowing the content from content providers that may compete with ISPs.

ISP stands for Internet Service Provider and is a company that provides you access to the Internet. Examples include ComCast, AT&T, Verizon, etc. Content providers include companies such as Amazon and NetFlix. In other words, content providers are companies that create and distribute content. I guess Wing Nut Gal is a content provider. Sometimes ISPs can also be content providers.

The regulations are 317 pages long, but it appears that only the commissioners have seen the regulations. According to TomsGuide.com, Net Neutrality is about treating all content on the Internet equally. Websites like NetFlix and Amazon won’t be given preferential treatment in relation to any other website, no matter how small. So, ISPs can’t give content providers preferential treatment/access to more bandwidth to the Amazons and the NetFlixes of the Internet.
This is like everything else the government throws out at us. It sounds good, but what are the unintended consequences or the intended consequences, for that matter. Since I started Wing Nut Gal, I’ve said this until I’m blue in the face. Our country was founded on the principle of limited government. Government would stay out of people’s lives and give the individuals room to take care of themselves and create wealth. So, anytime the government sticks its nose into something, we have to beware. Now, I’m not a libertarian. I’m a mainstream Republican. So, I realize that government has a role to play in a lot of aspects of our lives, but we’re headed down the road to becoming a socialist country where the government provides for its citizens womb to tomb everything. You don’t have to take responsibility for any aspect of your life, government will provide.

Do you think the government is going to stop with these 317 pages of regulations? If your answer is yes, I have some swamp land in Louisiana that you might be interested in. Eventually, it’s going to be costlier to access the Internet and it won’t be as user-friendly. Will certain types of speech be prohibited? I’m sure that somewhere within the government, some little bureaucrat monitors Wing Nut Gal. Could someone be watching me, monitoring my comings and goings? Am I on some kind of list? Will I be audited by the IRS while we have a Democrat administration?

I remember back during the later years of the Clinton administration, a government website was being developed. It was touted as the only website any of us would need to visit. It was a minor news story and didn’t get much traction. Once President Bush moved into the oval office, you never heard anything else.

I don’t want the government sticking its nose into the Internet. And even if these regulations sound good to you, please activate that second brain cell and think this thing through.

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