To shine a light on how CRA works for America, ReinvestmentWorks…the blog! is hosting a CRA contest and wants to hear from you! Please send us your best CRA success stories and tell us how CRA has made a positive difference in the lives of working families and communities. The winner of the CRA contest will be able to take pictures of community reinvestment projects with this Kodak camera!
In society, we have grown uncomfortable with calling out those who don’t live up to expectations. That has a lot of ramifications. Right now, it is most visible in our willingness to help out institutions whose products have not kept up with the expectations of consumers in the marketplace.
Do we want banks and thrifts to be measured by these new, lower standards?
Lending in America has been schizophrenic. The regulated part of the financial industry, banks, has by and large made responsible loans that enable communities to thrive. The unregulated part of the industry, independent mortgage companies financed by Wall Street, has issued reckless loans that have plunged this country into the most severe recession since the Great Depression.
CRA provides incentives for safe and sound lending, and should be applied more broadly throughout the financial services industry to safeguard against another economic crisis similar in scale and magnitude as the current one the US now suffers. Mr. Gramm’s recent op-ed demonstrates that sadly, he just doesn’t get it.
It’s not just about the bonuses. Nor is the solution taxing bonuses at bailed-out firms. It’s about regulating speculation gone wild and it’s about investing in and for communities.
