Why have Republicans and conservatives convinced themselves that banks were “forced” to lend to the poor?
Is seems like a talking point for Republicans and conservatives is that the real estate downturn and the following economic meltdown is some how the fault of the poor: in particular, poor minorities.
They somehow have the mistaken misconception that banks were somehow “forced” or “pressured” into lending money to poor, unqualified people, and usually the word CRA is thrown out there. But the CRA (Community Reinvestment Act) was designed to prevent banks and insurance companies from redlining; that is, to refuse someone financial services because they live in an area deemed to be poor financial risk. The CRA was not a green light for banks to just give credit to any minority they saw regardless of financial status.
Furthermore, the idea that poor people or advocates of the poor have the power to “force” banks to do anything is laughable. Banks hold the money and have considerable wealth and power; the government doesn’t “force” them to do anything these days. In fact, if anything, the banks control the government more than the other way around. I think this is evident by the “Wall Street First, Main Street last” mentality of government, making sure the banks got $ 700 billion in bailout before the American people got a penny.
There has been no empirical evidence to show that CRA contributed to the financial crisis, a sentiment echoed by FDIC chairman and Republican Sheila Bair, among others:
But despite the facts, Republicans and conservatives keep blaming the government for forcing banks to lend to poor lower and working class people when this didn’t happen. Banks chose who they wanted to lend to and they chose to lend to EVERYONE prime, sub-prime, et al. because THEY could profit, and they did. If they loaned to people without checking creditworthiness or verifying income, it was because THEY wanted to, not because they were forced. They loaned, the securitized, they profited and left the consequences for the rest of economy to deal with.
So why do Republicans and conservatives like blaming the poor, lower and lower classes, minorities, and the government for the economic crisis when the main culprits were banks and mortgage brokers??