Banks pressured to repeat causes of 2008 financial crises

As the media begins to roil with reports of bank delays in the distribution of business recovery loans from the government plan to save business from the effects of quarantine and closure, it is important to ask if there is more to the story than the mere miserly attitude of the run-of-the-mill bank.  Back in early 2000, Barney Frank and a lot of other politicians passed legislation forcing banks to throw away traditional mortgage underwriting guidelines to make mortgages to low-income Americans (or no income Americans).  If the banks didn’t, they would not get permission to open new branches and grow. That contributed largely to the 2008 financial crisis, in which eight trillion dollars in mortgages failed, an amount that broke the system because it simply couldn’t all be insured. The very same politicians then blamed the banks for reckless lending and resisted the bailouts.   Now, as part of the federal relief plan for businesses...(Read Full Post)
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