Cash Advance News Break: Charges of CRA Complicity in Financial Crisis

By Robert Kropp. Attempts by some conservatives to link the Community Reinvestment Act to predatory mortgage lending are shown to be misleading and often false.

Your Cash Advance News Source Quoted With Edits From: Studies Rebuff Charges of CRA Complicity in Financial Crisis (SocialFunds.com)

All Fingers Point towards the Community Reinvestment Act

Always Pointing Fingers, Even At Cash Advance Companies

The current financial crisis has Americans scrambling for answers, like how to fix it and who to blame. Apparently, it’s easier to point fingers than it is to find a solution. The Community Reinvestment Act (CRA) has been a huge target for many conservatives; the CRA has been accused of allowing predatory lenders to prey on low- and moderate-income, and often minority, neighborhoods. And supposedly, this predatory lending is what has pushed Americans deeper and deeper into debt.

Au Contraire

Despite the accusations, the CRA has the numbers to prove its critics wrong. The Federal Reserve performed a study that showed CRA banks were much more stringent in who they lent to and did not make as many higher-priced loans that have sent borrowers into foreclosure. Another study illustrated that banks under CRA regulation were less likely to originate sub prime mortgage loans to low-income borrowers.

A Faster Solution

The economy is hurting and so are Americans. Instead of placing blame, whether its deserved or not, we should be looking for a solution to the financial crisis. Curbing the efforts of predatory lenders, eliminating the cash advance industry, is not the solution Americans need. Americans need financial freedom in a time of financial turmoil.