Hi Everyone,

There was a question as to whether the Community Reinvestment Act forced Fannie, Freddie and banks to make loans that eventually lead to the meltdown.  Here is some research for you by Nobel Laureate Economist Paul Krugman disputing this claim…and an excerpt from an interview:

Watertown, Conn.: Do you agree that the Community Reinvestment Act (CRA) is the cornerstone of subprime lending, the root cause of financial meltdown?

Paul Krugman: No, and I’m glad someone brought that up. CRA has been in existence since 1977; plus, it only applies to depository institutions (regular banks). Meanwhile, we had a subprime bubble that mostly took place after 2002, with most of the loans made by institutions that weren’t subject to the CRA.

That’s why everyone who’s looked at this honestly says that the Community Reinvestment Act had nothing to do with the crisis.

The attempt to blame it all on the CRA is just an attempt at blame-shifting — an attempt to make liberals and nonwhite people the villains of a story that is actually about runaway financial institutions and the free-market ideologues who refused to regulate them.

Next, it looks like the CFPB has released their new examination manual for how they’ll be regulating non-depository lenders and brokers.

Do you want to give the CFPB input on the new GFE/TIL? Here’s your chance.

Here’s Rhonda Porter’s twitter account, which provides a great example of how to follow the new WA State DFI advertising rules.

Here’s the story about the indictment of Shawn Portmann…and the Seattle PI story

Here’s the deceptive “Lower My Bills” website.

Here’s a link to Paramount Equity’s disclosure page showing the really low LTV required to get the rate advertised.

Here’s the story that posted today in the Puget Sound Buz Journal about Wa State’s troubled banks.