Democrats and the media insist the Community Reinvestment Act, the anti-redlining law beefed up by President Clinton, had nothing to do with the subprime mortgage crisis and recession.
But a new study by the respected National Bureau of Economic Research finds, "Yes, it did. We find that adherence to that act led to riskier lending by banks."
Added NBER: "There is a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam. Moreover, the effects are larger for loans made within CRA tracts," or predominantly low-income and minority areas."
Except as I've been saying for years now, the CRA's effect on the housing collapse was minimal because the banks that made the vast majority of bad subprime loans never made them under the CRA. Investor's Business Daily has been pushing this outright falsehood for four years now.