Wednesday, September 23, 2009
"Acorn: Creature of the CRA"
The Community Reinvestment Act.
Sounds beneficial, doesn't it? Well, it's not!
It is likely to have been the root cause of our current horrible economy.
It is very clear that citizens should be very vigilant when government steps in to be helpful.
Things that sound good most likely have some immediate benefit to politicians; and a disastrous effect on those who have to live with it in the future...
Sounds beneficial, doesn't it? Well, it's not!
It is likely to have been the root cause of our current horrible economy.
It is very clear that citizens should be very vigilant when government steps in to be helpful.
Things that sound good most likely have some immediate benefit to politicians; and a disastrous effect on those who have to live with it in the future...
This is from an article by Steven Malanga at FrontPageMag.com:
"Acorn found its way into the mortgage business through the Community Reinvestment Act, the 1977 legislation that community groups have used as a cudgel to force lenders to lower their mortgage underwriting standards in order to make more loans in low-income communities. Often the groups, after making protests under CRA, were then rewarded by banks with contracts to act as mortgage counselors in low-income areas in return for dropping their protests against the banks. In one particularly lucrative deal, 14 major banks eager to put CRA protests behind them in 1993 signed an agreement to have Acorn administer a $55 million, 11-city lending program. It was precisely such agreements that helped turn Acorn from a network of small local groups into a national player. And Acorn hasn't been alone. A U.S. senate subcommittee once estimated that CRA-related deals between banks and community groups have pumped nearly $10 billion into the nonprofit sector."
