Does everyone remember the housing bubble that burst in 2008, the one that was blamed on Bushs policies? Do you remember the massive legislation known as Dodd-Frank that is supposed to prevent those greedy bankers from taking advantage of the poor consumer and making overly risky loans? Well, an article in The Birmingham News issued Friday, August 15, 2014, (Business Section, Page 12) reads: BBVA Compass must provide better service to consumers in low- and moderate-income households in order to meet a legal standard, the Birmingham- and Houston-based bank said Thursday. The Community Reinvestment Act of 1977 requires banks operating in the U.S. to adequately serve low- and moderate-income households. The Federal Reserve checks banks compliance with the law from time to time. BBVA Compass most recent exam will result in restrictions on its ability to grow, the bank said. The bank did not provide specifics about the results of the exam, bust said in a statement that it would limit the banks ability to make certain acquisitions and open branches. According to a quarterly filing with the Securities and Exchange Commission, those limits will come as restrictions set by regulators, rather than self-imposed changes to BBVA Compass growth plan. The restrictions on the banks growth will remain in place until after BBVA Compass next CRA examination in 2015. In other words, folks, over 35 years ago the Congress, in its infinite wisdom, once again rewrote the laws of economics and uses the full power of government to penalize banks if the banks dont make high risk mortgages (remember those borrowers that couldnt really afford to repay their loans who were, it was implied, coerced into taking out the unaffordable loans). And what happens when banks cant collect on the loans? And what happens when lots of foreclosed homes go on the market? Wait! Isnt that what happened 8 years ago? Wait! Didnt Dodd-Frank fix the real problems with banking excesses? Guess not.
Posted on: Mon, 18 Aug 2014 03:37:45 +0000
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