Washington, D.C., October 2, 2008—A policy expert at the Competitive Enterprise Institute, a free market think tank, today harshly criticized the supposed “myth-busting” of the Center for American Progress’ Action Fund.
Michelle Minton, a policy analyst at the Competitive Enterprise institute and author of the paper “The Community Reinvestment Act’s Harmful Legacy” to the current crisis.
“To an extent it’s correct to say that CRA isn’t the primary cause of today’s financial problems,” says Minton. “In conjunction with other misguided regulations and the creation of a super-charged secondary market CRA fueled the reckless behavior that caused today’s problems” argues that the CRA contributed
Minton doesn’t blame borrowers or community groups for the problems, “Clearly the institutions who recklessly purchased risky mortgage backed securities are at fault,” she says. “Regulations intended to increase the availability of credit combined with government guarantees pushed institutions in the wrong direction.”
Minton’s paper The Community Reinvestment Act’s Harmful Legacy, is available here.
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