There’s little doubt that the rating agencies helped inflate the housing bubble. But when we round up all the culprits, we shouldn’t ignore the regulators and affordable-housing advocates who pushed lenders to make loans in low-income neighborhoods for reasons other than the only one that makes sense: likely repayment… in 1995 the Clinton administration added tough new regulations. The federal government required banks that wanted 'outstanding' ratings under the act to demonstrate, numerically, that they were lending both in poor neighborhoods and to lower-income households. Banks were now being judged not on how their loans performed but on how many such loans they made. This undermined the regulatory emphasis on safety and soundness.
…the government has used regulatory and political pressure to force banks and other government-controlled or regulated private entities to make loans they would not otherwise make and to reduce lending standards so more applicants would have access to mortgage financing… the CRA was used to pressure banks into making loans they would not otherwise have made and to adopt looser lending standards that would make mortgage loans possible for individuals who could not meet the down payment and other standards that had previously been applied routinely by banks and other housing lenders... a law that was originally intended to encourage banks to use safe and sound practices in lending now required them to be innovative and flexible--a clear requirement for the relaxation of lending standards.
The roots of this crisis go back to the Carter administration. That was when government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and "redlining" because urban blacks were being denied mortgages at a higher rate than suburban whites. The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless. Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to "meet the credit needs" of "low-income, minority, and distressed neighborhoods." Lenders responded by loosening their underwriting standards and making increasingly shoddy loans.
There is definitely a major disconnect between our leaders in Trenton and the people who pay taxes and employ residents. Legislators and the governor seem to think our residents and employers have deep pockets and unlimited resources to fund their bloated bureaucracy, when that is far from the case. This madness has to end.
The CRA, by encouraging loosening underwriting standards, may have contributed to the massive increase in foreclosure rates.
I am here today to address the proposition that two provisions of the Energy Policy Act of 2005--that being section 327 concerning hydraulic fracturing, and section 328 regarding stormwater--have resulted in harm to drinking water resources in the United States. The evidence would strongly suggest otherwise. These two provisions simply removed unnecessary administrative burdens on the production of oil and natural gas in the United States.
In the first place, bureaucracies never become efficient; they're never going to get rid of administrative costs; they're never going to reduce them. That's not the purpose of bureaucracies. It's to increase those things.
This brings visions of private lawsuits by plaintiffs with bounty-hunting lawyers, instead of investigations by the state labor agency.
If implemented, they would require employers to establish burdensome and costly new systems intended to track, prevent and provide compensation for an extremely broad class of injuries whose cause is subject to considerable dispute.
[The ergonomics standard is] the most expensive, intrusive regulations ever promulgated, certainly by the Department of Labor and maybe by any department in history.
