Despite efforts to blame the collapse of subprime mortgages and the economic downturn on private sector failings, the Community Reinvestment Act should still be viewed as a major cause of the crisis. As pointed out here, Bank of America has revealed that while the CRA accounts for 7% of the total in residential mortgages, it also accounts for 24% of the losses. As the article states, “[t]hat alone doesn’t put all the problem on the CRA’s shoulders, but obviously the losses in this portfolio are way out of proportion.”
Anyone really believe that the story isn’t similar for other banks? If it is, how can anybody claim that government didn’t play a significant role in bringing about the economic crisis?