Posted by Tina
The Clinton Library has been releasing documents for public scrutiny lately. The latest memos show the degree to which Clinton’s regulatoryand policy changes became a driving force for trouble down the road:
Exhibit A in the 7,000-page Clinton Library document dump is a 1999 memo to him from his treasury secretary, Robert Rubin.
“Public disclosure of CRA ratings, together with the changes made by the regulators under your leadership, have significantly contributed to … financial institutions … meeting the needs of low- and moderate-income communities and minorities,” Rubin gushed. “Since 1993, the number of home mortgage loans to African Americans increased by 58%, to Hispanics by 62% and to low- and moderate-income borrowers by 38%, well above the overall market increase.
“Since 1992, nonprofit community organizations estimate that the private sector has pledged over $1 trillion in loans and investment under CRA.”
Other documents reveal how the community-activist group ACORN and other organizations met with Rubin and other top Clinton aides on “improving credit availability for minorities.”
Clinton’s changes to the CRA let ACORN use the act’s ratings to “target merging firms with less-than-stellar records and to get the banks to agree to greater community investment as a condition of regulatory approval for the merger,” White House aide Ellen Seidman wrote in 1997 to Clinton chief economist Gene Sperling.
“Community groups have come to recognize how terribly powerful CRA has been as a tool for making credit available in previously underserved communities,” Seidman added.
Seidman later boasted that Clinton’s 1995 CRA revisions created not only the subprime mortgage market but also the subprime securities market. Of course, subprime loans and their high default rates ruined minority neighborhoods when the market crashed.
Memos also reveal how Clinton aides held repeal of the Glass-Steagall Act hostage to strengthening the CRA. They gave Republicans deregulation of banking activities in exchange for over-regulating how those banking activities applied to low-income communities.
Clinton aides viewed ending the Glass-Steagall Act as a way to “extend the CRA to Wall Street firms” and wanted to extend it to insurers, mutual funds and mortgage bankers. But due to GOP opposition, that was “not politically feasible,” Rubin told Clinton in a 1997 memo.
In 2000, HUD Secretary Andrew Cuomo lit the fuse on the subprime bomb by requiring Fannie Mae and Freddie Mac to purchase subprime, CRA and other risky mortgages totaling half their portfolios.
A 1993 memo, “Racism in Home Lending,” captured the tone of Clinton’s affordable-housing crusade. It proposed coordinating with the Washington Post and Congressional Black Caucus on bank investigations.
Is it any wonder Clinton was dubbed the first black president?
But you have to admit, Obama has played, “I can top that” to a tea!
Many thanks to IBD.