N.C. Futures Action Fund to run television ads against "Tea Party takeover" of Wake schools

Fortunately the graduates from our school system are smart enough to recognize blatant radical left-wing propaganda for the true lies that underlie this type of political advertisement.  They know that the cause of the financial meltdown in this country was not a school board but several Democratic administrations (Carter, Clinton and now Obama) that were responsible for the Community Reinvestment Act, the Interagency Task Force and Gramm-Leach-Bliley Act

Today the “Fair Lending” laws are being enforced more vigorously than ever.

During the first two years of the Obama Administration there have been 60 Fair Lending referrals to the Department of Justice. Fair Lending penalties can be very expensive. One California Bank defended 5 potential violations at a cost of $6 million!

During President Clinton’s eight years only 16 cases were referred to the DOJ and during President Bush’s two terms only 9 Fair Lending referrals were sent to the DOJ.

While Carter signed into law the Community Reinvestment Act in 1977 it did not list specific criteria for evaluating the performance of financial institutions, not until Clinton created the Interagency Task Force was the criteria defined and enforcement began.

In October 1997, First Union Capital Markets and Bear, Stearns & Co launched the first publicly available securitization of Community Reinvestment Act loans, issuing $384.6 million of such securities. The securities were guaranteed by Freddie Mac and had an implied “AAA” rating. The public offering was several times oversubscribed, predominantly by money managers and insurance companies who were not buying them for CRA credit.

In 1999 the Congress enacted and President Clinton signed into law the Gramm-Leach-Bliley Act, also known as the Financial Services Modernization Act. This law repealed the part of the Glass–Steagall Act that had prohibited a bank from offering a full range of investment, commercial banking, and insurance services since its enactment in 1933.

In the first Act Senator Gramm had demanded full disclosure of any financial “deals” which community groups had with banks, accusing such groups of “extortion” but in the fall of 1999, Senators Christopher Dodd and Charles E. Schumer prevented an impasse by securing a compromise between Sen. Gramm and the Clinton Administration by agreeing to amend the Federal Deposit Insurance Act to allow banks to merge or expand into other types of financial institutions. In the new Gramm-Leach-Bliley Act’s FDIC related provisions required that any insured bank holding institution wishing to be re-designated as a financial holding institution by the Board of Governors of the Federal Reserve System would also have to follow Community Reinvestment Act compliance guidelines before any merger or expansion could take effect. This led to the practice of making the loans, securitizing them and selling them on a massive global scale.

In October 2000, to expand the secondary market for affordable community-based mortgages and to increase liquidity for CRA-eligible loans, Fannie Mae committed to purchase and securitize $2 billion of “MyCommunityMortgage” loans. In November 2000 Fannie Mae announced that the Department of Housing and Urban Development would soon require it to dedicate 50% of its business to low- and moderate-income families. In 2001 Fannie Mae announced that it had acquired $10 billion in specially-targeted Community Reinvestment Act (CRA) loans more than one and a half years ahead of schedule, and announced its goal to finance over $500 billion in CRA business by 2010, about one third of loans anticipated to be financed by Fannie Mae during that period.

It was during the Clinton years that the teeth of enforcement was put into the CRA through his Interagency Task Force and the passing of the “new” Gramm-Leach-Bliley Act that included CRA compliance along with Fannie Mae’s commitment to purchase and securitize hundreds of billions of high risk loans that ultimately led to the financial collapse of 2008/2009. 

You can try to create a school system that keeps people dumbed-down, but you can’t keep the knowledge away from them forever.