Affirmative-action lending took off in the 1990s as a result of the poverty lobby’s insistence that everyone should be able to own a home, even if they can’t pay the mortgage. Durham should be more than familiar with that line of reasoning. The Carter-era Community Reinvestment Act enshrined that line of reasoning in statute, and institutions like Durham’s Self-Help Credit Union took up the call for mortgages for deadbeats. Experts blame this risky lending for the financial meltdown of the past year, so, of course, the Obama administration’s answer is to give us more of it:
As our old Hoover Institution friend Peter Schweizer points out in his Forbes column “Expanding the CRA,” in the nine years running up to the economic crisis, banks operating under the constraints of the CRA to offer more than $4.2 trillion in loans to people they would ordinarily not lend money to. Now they want to expand the CRA to cover credit unions, other mortgage lenders and insurance companies. This would mean trillions more in what Peter refers to as affirmative action lending.
Insanity reigns in Washington.
