[ QUOTE ]
I think the problem started with the Community Reinvestment Act under Jimmy Carter. This paved the way for cheap credit, placing mandates on banks to right these loans. Combine this with deregulation and you have a recipe for big trouble. It you had money in the market on 1929 and held it through the 1933 crash it took you 22yrs to recover your money. I will be happy if I recover the money that I lost in 10yrs. I say we need a viable third party and term limits
[/ QUOTE ]
Even the mighty Oak starts out as an acorn or is it ACORN?
I was involved in a de novo bank in 1990 and I can tell you for a fact that we were told by the OCC that we WOULD make loans in so-called 'red-lined areas' if we wanted to expand and borrow at the lowest fed rates. We scratched our heads in loan committee meetings, bit the bullet and made what we knew were bad loans.
We were capitalized at about $10mil. at that time so I can only image the quantity of bad loans mega banks had to make. This was the first I had seen of the Community Reinvestment Act up close and personal. CRA......... sounds harmless enough doesn't it?