Housing/Mortgages
The federal government has been involved in housing since the formation of a Congressional commission in 1892 to investigate slum conditions in the nation’s cities. During WWI and WWII the federal government constructed and managed housing for defense workers and military personnel. Since the National Housing Act was signed into law by FDR in 1934 the federal government has helped middle and working class families acquire home loans through regulation of savings and loan industry, subsidized loans and other mechanisms. These policies have transformed and dramatically expanded the opportunity for homeownership and helped to create the middle class in the U.S.
Cry Wolf Quotes
I say that when you set up that type of corporation and you set up that sort of insurance company and operate it in the manner proposed, you are going to close every building association in the United States. They cannot survive under it to save their souls. This is the heart of this whole bill.
Gentlemen, most of the home owners want to keep their credit. We are not asking that we escape our responsibilities; we just want to find a way to pay, and we do not want you to make it harder for us.
…we object to the bill on the ground that there is no limitation of interest to be charged to home owners by agencies that enjoy the benefit of the act at the expense of all taxpayers, including the victimized home owners.
Taken as a whole, the effect of the creation of the insurance corporation is to put the Government directly into the lending business, not only for the repair of homes, but for the installation of frigidaires, water heaters, and other equipment, and as to which there would be no lien whatever. Furthermore, it puts the Government directly into the business of lending as much as 80 percent for the construction of new homes, and an unlimited percent for low-cost housing. The practical application of this act would be to drive existing lending institutions out of business; and by reason of loans where there is no security, will mean untold losses to the Government.
Related Laws and Rules
Evidence
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Federal Reserve Bank of San Francisco Shuts Down Critics of the Community Reinvestment Act
The Community Reinvestment Act had nothing to do with the subprime crisis.
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Community Reinvestment Act Did Not Fuel the Subprime Crisis
The Community Reinvestment Act did not create an overabundance of risky loans.
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Inclusionary Housing: A Good Solution to Create Affordable Housing
In defense of inclusionary housing.
Backgrounders & Briefs
Good Rules: Ten Stories Of Successful Regulation
Demos looks at ten laws and rules that we take for granted.
Community Reinvestment Act Policy Brief
By Philip Ashton, UIC
The Community Reinvestment Act (CRA) has been critical to the expansion of responsible credit for low- and moderate-income borrowers since its passage in 1977.
Resources
The Center for Responsible Lending promotes and advocates legislation to defend lower income Americans from abusive or predatory lending practices.
