rssMore Proof That Alan Greenspan Was Wrong: Anti-Predatory Laws Slowed Foreclosures
Tuesday, October 06, 2009 at 9:14 am
- 10 Comments
A new study out today from the University of North Carolina Center for Community Capital provides more evidence that deregulatory zealots have a lot to answer for when it comes to the mortgage crisis: State anti-predatory laws actually worked, slowing down foreclosures.
But, alas, the state protections were overruled by the Office of the Comptroller of the Currency, which gave national banks a pass and said they didn’t have to comply with those laws. And guess what happened next.
States that adopted tough anti-predatory lending laws had lower foreclosure rates than states without those laws, according to a new study conducted by the UNC Center for Community Capital.
In addition, after 2004, when the federal government exempted national banks from state anti-predatory lending laws, national banks increased their subprime lending the most in states with those laws. After this loophole opened in 2004, national banks made riskier loans, especially in states where other lenders remained subject to strict anti-predatory lending laws.
These conclusions suggest that when state laws did apply, the laws did a better job of promoting quality lending.
This study is a perfect reminder, as Congress and the administration tackle financial regulatory reform, that not all regulations are onerous, anti-business, and aimed at choking off financial innovation. And it’s more evidence that borrowers buying beyond their means weren’t the only only players in the subprime mess.
The same banks that found their way around these state anti-predatory laws are the ones getting government bailouts, and financial incentives to modify loans. And bonuses for top employees. The study is an important reminder of their motives and behaviors during the housing boom, at a time when those same banks are lobbying against new reforms.
10 Comments
Pingback posted October 6, 2009 @ 9:40 am
[...] This post was mentioned on Twitter by TMC Member Feed and lilliepotts. lilliepotts said: RT @TWI_news More Proof That Alan Greenspan was Wrong: Anti-Predatory Laws Slowed Foreclosures http://bit.ly/TjDul //Yeah, he is, again! [...]
Pingback posted October 6, 2009 @ 10:03 am
[...] News Sources wrote an interesting post today onHere’s a quick excerptA new study out today from the University of North Carolina Center for Community Capital provides more evidence that deregulatory zealots have a lot to answer for when it comes to the mortgage crisis: State anti-predatory laws actually worked, slowing down foreclosures. But, alas, the state protections were overruled by the Office of the Comptroller of the Currency, which gave national banks a pass and said they didn’t have to comply with those laws. And guess what happened next. States [...]
Pingback posted October 6, 2009 @ 11:50 am
[...] not all regulations are onerous, anti-business, and aimed at choking off financial innovation," writes Mary Kane at the Washington Independent. "And it’s more evidence that borrowers buying beyond [...]
Pingback posted October 6, 2009 @ 1:18 pm
[...] improves profits, even if it’s unethical or immoral or illegal or any combination of those.) Mary Kane in the Washington Independent: A new study out today from the University of North Carolina Center for Community Capital provides [...]
Pingback posted October 6, 2009 @ 6:31 pm
[...] all regulations are onerous, anti-business, and aimed at choking off financial innovation,” writes Mary Kane at the Washington Independent. “And it’s more evidence that borrowers buying [...]
Comment posted October 6, 2009 @ 6:09 pm
Greenspan was wrong? next you're gonna tell me the Pope is Catholic
Comment posted October 6, 2009 @ 8:02 pm
I always thought that he' wrong about this whole situation… I agree that the laws helped to hold the foreclosures for a moment.
Regards,
Tony
http://www.foreclosurelistings.com/
Pingback posted October 8, 2009 @ 8:10 am
[...] After lobbying from the lending industry, the Office of the Comptroller of the Currency in 2004 exempted banks and mortgage companies from tough state anti-predatory lending [...]
Comment posted December 12, 2009 @ 5:08 pm
Which Pope are you speaking of? Pope Benedict XVI of Roman or Pope Shenouda III of Alexandria. Oh. And don't forget Metropolitan Ieronymos of Thebes (Eastern Orthodox). These three Christian are the founders of the religion.
Comment posted December 12, 2009 @ 10:08 pm
Which Pope are you speaking of? Pope Benedict XVI of Roman or Pope Shenouda III of Alexandria. Oh. And don't forget Metropolitan Ieronymos of Thebes (Eastern Orthodox). These three Christian are the founders of the religion.
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