People taking loans they shouldn't really have is certainly a problem of individual responsibility. There's no question about that.
-spence[/QUOTE]
you are correct on the first point(first time for everything I guess
) but congress under the Clinton administrationcreated an (1992)environment that forced these institutions to make these loans in order to not be labeled racist institutions and be penalized by the govt....that's wasn't regulation, it was social engineering gone amuck...these loans were bundled and sold to the investment institutions who in turn sold them as mortgage backed investments all the while knowing that the feds would guarantee them....it's a mess that's been a long time in the making but it begun in 1977 and "put on steroids" in 1992 as just another feel good move with no consideration of the consequences...govt. never accepts responsibility or fault for crap like this, they just propose an even bigger beaurocracy to "fix" another disaster of their own making...Investor's Business Daily wrote a great article that should be read if you want to understand how this all came about.....
here's the genesis of this mess...some cut and paste huh Spence?
HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1977—TITLE VIII (COMMUNITY REINVESTMENT)
AN ACT
To amend certain Federal laws pertaining to community development, housing, and related programs.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled.
TITLE VIII—COMMUNITY REINVESTMENT
SEC. 801. This title may be cited as the "Community Reinvestment Act of 1977".
SEC. 802. (a) The Congress finds that--
(1) regulated financial institutions are required by law to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business;
(2) the convenience and needs of communities include the need for credit services as well as deposit services; and
(3) regulated financial institutions have continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered.
(b) It is the purpose of this title to require each appropriate Federal financial supervisory agency to use its authority when examining financial institutions, to encourage such institutions to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions.
SEC. 803. For the purpose of this title--
(1) the term "appropriate Federal financial supervisory agency" means--
(A) the Comptroller of the Currency with respect to national banks;
(B) the Board of Governors of the Federal Reserve System with respect to State chartered banks which are members of the Federal Reserve System and bank holding companies;
(C) the Federal Deposit Insurance Corporation with respect to State chartered banks and savings banks which are not members of the Federal Reserve System and the deposits of which are insured by the Corporation; and
(D)(2) section 8 of the Federal Deposit Insurance Act, by the Director of the Office of Thrift Supervision, in the case of a savings association (the deposits of which are insured by the Federal Deposit Insurance Corporation) and a savings and loan holding company; *
(2) the term "regulated financial institution" means an insured depository institution (as defined in section 3 of the Federal Deposit Insurance Act);
(3) the term "application for a deposit facility" means an application to the appropriate Federal financial supervisory agency otherwise required under Federal law or regulations thereunder for--
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(A) a charter for a national bank or Federal savings and loan association;
(B) deposit insurance in connection with a newly chartered State bank, savings bank, savings and loan association or similar institution;
(C) the establishment of a domestic branch or other facility with the ability to accept deposits of a regulated financial institution;
(D) the relocation of the home office or a branch office of a regulated financial institution;
(E) the merger or consolidation with, or the acquisition of the assets, or the assumption of the liabilities of a regulated financial institution requiring approval under section 18(c) of the Federal Deposit Insurance Act or under regulations issued under the authority of title IV of the National Housing Act; or
(F) the acquisition of shares in, or the assets of, a regulated financial institution requiring approval under section 3 of the Bank Holding Company Act of 1956 or section 408(e) of the National Housing Act.
(4) A financial institution whose business predominately consists of serving the needs of military personnel who are not located within a defined geographic area may define its "entire community" to include its entire deposit customer base without regard to geographic proximity.
SEC. 804. (a) IN GENERAL.--In connection with its examination of a financial institution, the appropriate Federal financial supervisory agency shall--
(1) assess the institution's record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of such institution; and
(2) take such record into account in its evaluation of an application for a deposit facility by such institution.
(b) MAJORITY-OWNED INSTITUTIONS.--In assessing and taking into account, under subsection (a), the record of a nonminority-owned and nonwomen-owned financial institution, the appropriate Federal financial supervisory agency may consider as a factor capital investment, loan participation, and other ventures undertaken by the institution in cooperation with minority- and women-owned financial institutions and low-income credit unions provided that these activities help meet the credit needs of local communities in which such institutions and credit unions are chartered.
(c) FINANCIAL HOLDING COMPANY REQUIREMENT.--
(1) IN GENERAL.--An election by a bank holding company to become a financial holding company under section 4 of the Bank Holding Company Act of 1956 shall not be effective if--
(A) the Board finds that, as of the date the declaration of such election and the certification is filed by such holding company under section 4(l)(1)(C) of the Bank Holding Company Act of 1956,
not all of the subsidiary insured depository institutions of the bank holding company had achieved a rating of "satisfactory record of meeting community credit needs", or better, at the most recent examination of each such institution; and
(B) the Board notifies the company of such finding before the end of the 30-day period beginning on such date.
(2) Limited exclusions for newly acquired insured depository institutions.--Any insured depository institution acquired by a bank holding company during the 12-month period preceding the date of the submission to the Board of the declaration and certification under section 4(l)(1)(C) of the Bank Holding Company Act of 1956 may be
{{8-31-00 p.6988.27}}excluded for purposes of paragraph (1) during the 12-month period beginning on the date of such acquisition if--
(A) the bank holding company has submitted an affirmative plan to the appropriate Federal financial supervisory agency to take such action as may be necessary in order for such institution to achieve a rating of "satisfactory record of meeting community credit needs", or better, at the next examination of the institution; and
(B) the plan has been accepted by such agency.
(3) DEFINITIONS.--For purposes of this subsection, the following definitions shall apply:
(A) Bank holding company; financial holding company.--The terms "bank holding company" and "financial holding company" have the meanings given those terms in section 2 of the Bank Holding Company Act of 1956.
(B) BOARD.--The term "Board" means the Board of Governors of the Federal Reserve System.
(C) INSURED DEPOSITORY INSTITUTION.--The term "insured depository institution" has the meaning given the term in section 3(c) of the Federal Deposit Insurance Act.
SEC. 805. Each appropriate Federal financial supervisory agency shall include in its annual report to the Congress a section outlining the actions it has taken to carry out its responsibilities under this title.
SEC. 806. Regulations to carry out the purposes of this title shall be published by each appropriate Federal financial supervisory agency and shall take effect no later than 390 days after the date of enactment of this title.
SEC. 807. WRITTEN EVALUATIONS.
(a) REQUIRED.--
(1) IN GENERAL.--Upon the conclusion of each examination of an insured depository institution under section 804, the appropriate Federal financial supervisory agency shall prepare a written evaluation of the institution's record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods.
(2) PUBLIC AND CONFIDENTIAL SECTIONS.--Each written evaluation required under paragraph (1) shall have a public section and a confidential section.
(b) PUBLIC SECTION OF REPORT.--
(1) FINDINGS AND CONCLUSIONS.--
(A) CONTENTS OF WRITTEN EVALUATION.--The public section of the written evaluation shall--
(i) state the appropriate Federal financial supervisory agency's conclusions for each assessment factor identified in the regulations prescribed by the Federal financial supervisory agencies to implement this Act;
(ii) discuss the facts and data supporting such conclusions; and
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(iii) contain the institution's rating and a statement describing the basis for the rating.
(B) Metropolitan area distinctions.--The information required by clauses (i) and (ii) of subparagraph (A) shall be presented separately for each metropolitan area in which a regulated depository institution maintains one or more domestic branch offices.
(2) ASSIGNED RATING.--The institution's rating referred to in paragraph (1)(C) shall be 1 of the following:
(A) "Outstanding record of meeting community credit needs."
(B) "Satisfactory record of meeting community credit needs."
(C) "Needs to improve record of meeting community credit needs."
(D) "Substantial noncompliance in meeting community credit needs."
Such ratings shall be disclosed to the public on and after July 1, 1990.
(c) CONFIDENTIAL SECTION OF REPORT.--
(1) PRIVACY OF NAMED INDIVIDUALS.--The confidential section of the written evaluation shall contain all references that identify any customer of the institution, any employee or officer of the institution, or any person or organization that has provided information in confidence to a Federal or State financial supervisory agency.
(2) Topics not suitable for disclosure.--The confidential section shall also contain any statements obtained or made by the appropriate Federal financial supervisory agency in the course of an examination which, in the judgment of the agency, are too sensitive or speculative in nature to disclose to the institution or the public.
(3) DISCLOSURE TO DEPOSITORY INSTITUTION.--The confidential section may be disclosed, in whole or in part, to the institution, if the appropriate Federal financial supervisory agency determines that such disclosure will promote the objectives of this Act. However, disclosure under this paragraph shall not identify a person or organization that has provided information in confidence to a Federal or State financial supervisory agency.
(d) INSTITUTIONS WITH INTERSTATE BRANCHES.--
(1) STATE-BY-STATE EVALUATION.--In the case of a regulated financial institution that maintains domestic branches in 2 or more States, the appropriate Federal financial supervisory agency shall prepare--
(A) a written evaluation of the entire institution's record of performance under this title, as required by subsections (a), (b), and (c); and
(B) for each State in which the institution maintains 1 or more domestic branches, a separate written evaluation of the institution's record of performance within such State under this title, as required by subsections (a), (b), and (c).
(2) MULTISTATE METROPOLITAN AREAS.--In the case of a regulated financial institution that maintains domestic branches in 2 or more States within a multistate metropolitan area, the appropriate Federal financial supervisory agency shall prepare a separate written evaluation of the institution's record of performance within such metropolitan area under this title, as required by subsections (a), (b), and (c). If the agency prepares a written evaluation pursuant to this paragraph, the scope of the written evaluation required under paragraph (1)(B) shall be adjusted accordingly.
(3) CONTENT OF STATE LEVEL EVALUATION.--A written evaluation prepared pursuant to paragraph (1)(B) shall--
(A) present the information required by subparagraphs (A) and (B) of subsection (b)(1) separately for each metropolitan area in which the institution maintains 1 or more domestic branch offices and separately for the remainder of the nonmetropolitan area of the State if the institution maintains 1 or more domestic branch offices in such nonmetropolitan area; and
(B) describe how the Federal financial supervisory agency has performed the examination of the institution, including a list of the individual branches examined.
(e) DEFINITIONS.--For purposes of this section the following definitions shall apply:
(1) DOMESTIC BRANCH.--The term "domestic branch" means any branch office or other facility of a regulated financial institution that accepts deposits, located in any State.
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(2) METROPOLITAN AREA.--The term "metropolitan area" means any primary metropolitan statistical area, metropolitan statistical area, or consolidated metropolitan statistical area, as defined by the Director of the Office of Management and Budget, with a population of 250,000 or more, and any other area designated as such by the appropriate Federal financial supervisory agency.
(3) STATE.--The term "State" has the same meaning as in section 3 of the Federal Deposit Insurance Act.
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