ArchPundit

Empirical evidence is apparently not important in Jim’s world.

Via Progress Illinois who has been doing excellent work on the issue.

As I discussed below, CRA loans outperform the loans responsible for the credit market meltdown.

Campaign for America’s Future put up a point by point rebuttal of claims about the CRA.

Let me add, State Farm Insurance has undertaken a project similar to CRA requirements and insures in inner cities where many insurance companies generally refuse to do business or charge exorbitant rates.  They are finding it to be incredibly profitable after about 10 years.

CRA doesn’t require lower standards–in fact it encourages the same standards as other loans in areas that are underserved—including rural areas (farm loans are a significant aspect of CRA).  The institutions that are covered by CRA aren’t having the degree of problems that the institutions that aren’t covered by CRA are. Why? Much stricter regulation.  Go figure.

Furthermore, loans made by Fannie and Freddie products aren’t the problem. Those loans met fairly strong standards for creditworthiness and even required credit counseling in some cases. The problem that got Freddie and Fannie in trouble is investing in Mortgage Backed Securities created by other institutions. They also didn’t focus on the gimmick loans and the adjustable rate mortgage loans and balloon payment loans that have caused loans made at prime rates to default at relatively high rates.  Those ARMs were pushed by the Fed and the market to increase demand for the mortgage products and ultimately are the biggest problem we face.  Freddie and Fannie didn’t do exotic loans and CRA institutions didn’t push exotic loans.  Less regulated entities like Countrywide did.  That’s the core of the problem.

But Jim won’t let those facts get in the way of scapegoating poor people.