As I and others have pointed out, the federal government has been forcing banks to make bad loans to unqualified or “sub-prime” borrowers for more than 30 years under the 1977 “Community Reinvestment Act.” Such loans comprise a large portion of all the sub-prime foreclosures. But the effect of the CRA is even worse than that. The chairman of the board of a major bank writes me: “Mortage originators not subject to the CRA (presumably because they are not registered banks or thrifts) will still be subject to market pressures to make sub-prime loans. If banks and thrifts are pressured … Continue reading The Community Reinvestment Act Cancer