federal reg reform
As a deregulatory philosophy took hold of Washington in the early 2000s, prudent supervision of the mortgage market broke down. Predatory loan products edged out sustainable ones in low-wealth communities, presaging the foreclosure crisis that destroyed billions of dollars of equity. As private securitizers took on more and more risk, Fannie Mae and Freddie Mac lost sight of their mission and engaged in a destructive race to the bottom.
In “Plunder,” Schechter makes the case that criminal acts of fraud and deception lay at the root of the financial crisis. The film argues that the scope of the fraud was huge, ranging from dishonest subprime lenders tricking unsophisticated borrowers into unaffordable loans, to the packaging of these risky loans into securities labeled risk-free, to the unknown parties who made millions betting against the U.S. housing market. “We need a jailout, not a bailout,” Schechter concludes.
Regulators are holding a series of public hearings, including one in Chicago on September 16, on possible revisions to HMDA. HMDA data collection must be more comprehensive in order for regulators and the public to prove abusive discriminatory lending practices and hold lenders accountable.
Why update HMDA? Why now?
The percentage of assets deposited in banks and thrifts, which have community reinvestment obligations under CRA, has declined dramatically. When the CRA was enacted in 1977, households held 25 percent of their financial assets at CRA-regulated institutions. By 2007, that share had declined to 15 percent.
Among the many remaining barriers are public policies that make it difficult for people with disabilities to work and acquire the earnings necessary to build assets.
The hearing will include testimony from policymakers, community organizations, and financial services leaders. Attendees not presenting oral testimony will have the opportunity to ask questions during several open mic sessions. Both panelists and speakers at the open mic must register in advance. If you are registering to testify and have not received a confirmation, contact: