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March 17, 2009
Bank Punished by Feds for Not Making Bad Loans
Anyone who doubts that our current economic crisis was largely brought on by liberals forcing banks to apply Affirmative Action to mortgages under the deranged Community Reinvestment Act is referred to one small bank that resisted pressure to make bad loans, the East Bridgewater Savings Bank in Boston. From the Boston Business Journal, via Capital Commerce:
Bad or delinquent loans? Zero. Foreclosures? None. Money set aside in 2008 for anticipated loan losses? Nothing. … The bank even squeaked out a profit of $87,000. And its Tier 1 risk-based capital ratio was 31.6 percent, or more than three times higher than many community banks in Massachusetts. "We're paranoid about credit quality," [CEO Joseph] Petrucelli said.
Companies that make bad loans are showered by the government will $billions stolen from us, our children, and our grandchildren. Responsible banks that only make loans that might be repaid are treated very differently. The FDIC is crawling all over Petrucelli's bank, accusing it of "not advertising and marketing its loan products enough" and giving it a "needs to improve rating" under the disastrous and still operative CRA.
Authoritarian government is all about punishment and reward. Flinging free money to Democrat constituents until you start to drown in red ink will be rewarded with lucrative bailouts. Running a responsible business will be punished by the petty tyrants infesting our Kafkaesque bureaucracy.
Needless to say, the bailouts financing the CRA insanity will only keep companies alive long enough to require more bailouts. Whether you want to call it socialism or fascism, it sure isn't economic freedom, and it sure isn't working.
Hat tip: Hot Air, on a tip from V the K.
Posted by Van Helsing at March 17, 2009 10:41 AM
Comments
And anonymous left-wing trolls will still deny that the CRA and federal meddling had anything to do with the mortgage crisis.
Posted by: V the K at March 17, 2009 11:15 AM
They'll say anything to protect the current regime... they won't wake up until it's too late.
Posted by: Anonymous at March 17, 2009 11:35 AM
It's so obvious, they didn't even try to cover it up. Arrogance, they knew the media would TRY to cover for them but this is beyond cover.
Posted by: TED at March 17, 2009 11:36 AM
It was alot of things, CRA included along with people underestimating risk, mortgage back securities, credit default swaps (gambling and should be illegal) along with real estate agents, appraisers, home sellers/buyers pumping up prices to ridiculous levels. And inept politicians like Dodd and Frank too.
Posted by: Anonymous at March 17, 2009 12:14 PM
Not to mention the fact that the government has no business telling a bank how to conduct its business. If a particular bank has a more conservative business philosophy, that's its business. If the stakeholders in the bank are comfortable with its rate of return, then that should be the end of it. Of course, the left (and some on the right) believe that all money belongs to the government, and the banks that don't loan it out enough, and the people that save it instead of buying luxury cars and flat-screen TVs, are thieves that are hoarding more money than they "need" and thus the "excess" should be redistributed, through them and by force. It's completely the opposite of how the free market (or the relatively free market we used to have) should work. Which is exactly what the left and their media water-carriers want.
Posted by: CoderInCrisis at March 17, 2009 12:22 PM
No good deed goes unpunished.
You couldn't even start a soup kitchen in this country without regulators and bureuweenies constantly on your back. It's sad.
Posted by: CrackrJak at March 17, 2009 3:27 PM
Strange, isn't it, that even those leftists who reluctantly concede that government and private enterprise "share the blame" for the mortgage meltdown are only demanding that one side, the private sector, be punished for it?
Posted by: Gregory of Yardale at March 17, 2009 6:29 PM
