In Their Own Words: How Clinton Officials Imposed Subprime Lending

Let's have a look back 15 years and just put on the record the statements made by Clinton officials from this press briefing.

H/T 2blue4u on the LGF links.

Some names here you may have not seen as culprits with the subprime mess and it would be nice of some of our esteemed media would go back have review this document.

MR. RUBIN: Hi. I'm Bob Rubin, the Assistant to the President for Economic Policy, and I'm going to introduce today's topic.

The President, as you know, has a broad, comprehensive strategy for dealing with the economic problems of the country for putting the country back on the right track for the long-term. A lot of the legislative and executive actions that have taken place in 1993 have been pursuant to that long-term economic strategy of the President's.

An important component of that strategy is to deal with the problems of the inner city and distressed rural communities -- pursuant to his belief that we must make real progress in those areas if this country is going to be successful in the future for all of us. The reform of the Community Reinvestment Act is an essential building block in the efforts I've just mentioned.

In July the President asked the four banking regulators to reform CRA, to reduce paperwork in process and reward performance, and to get that done by January 1, 1994. We're delighted to report that that has been accomplished on schedule. And in conjunction with the President's Community Development Bank and financial institution legislation, which recently passed the House of Representatives, CRA reform will generate billions of dollars in new lending and extend basic banking services to the inner cities and to distressed rural communities around the country.

More than enough here on the CRA and the notorious ACORN, a community of scammers Barack Obama helped organize.

Will anyone notice? Does anyone care?

Getting back to the press conference document, remember this: It was all in name of change.

SECRETARY BENTSEN: If you have any questions about it, the fine print's right here. You're going to have to behave for just a minute.

Let me say that we've developed another element in that program to improve access for all Americans. I think one of the interesting phases of this one is that you saw all four regulatory agencies work together, to speak with one voice on that one. And that makes it effective.

I want to briefly tell you about it and how it fits into the Clinton administration's initiatives for change. We have developed proposed regulations to take the uncertainty out of the Community Reinvestment Act. The heavy lifting on this has been done cooperatively by the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Fed and the Federal Deposit Insurance Corporation. And that effort has been led by Gene Ludwig, of the OCC, and Lawrence Lindsay, of the Fed. Gene is going to be able to give you a great deal of the detail in just a moment.

In a nutshell, what we're proposing to do is to make it easier for lenders to show how they're complying with the Community Reinvestment Act. For those who aren't familiar with the area of banking law, the changes we're proposing are important because banks now have a very clear, quantitative standard by which their compliance can be judged. And that is very important to banks when it comes to ask regulators to approve mergers, new branches and the like.

Before our proposal banks had no certainty what effect the steps they were taking toward community reinvestment would have on applications. What we're trying to do is to make credit more readily available for small business, for small farms and distressed areas of our country.

One of the things that you've had before is a problem -- if you were going to do a small business loan, or you were going to do a large business loan, the cost was almost the same. So the incentive there was for the bank to make the large business loan. What we've tried to do is cut back a lot of the paperwork and the cost on small business loans.

How'd making all that credit with reduced paperwork turn out?

Well, you see the results today, folks.

Bentsen later turned it over to to another official. See if you can detect a bit of irony in the following statement.

And with that, let me turn this podium over now to Gene Ludwig, the Comptroller of the Currency on the detail. And he's done a great job on this one -- congratulations.

Hmm. Reminds me a bit of the infamous "heck of a job, Brownie" line for which George Bush has been excoriated post-Katrina.

Later, Ludwig took a question from an unidentified reporter.

Q You said you were confident that this would increase lending. Looking forward five years, could you give us any indication of how much lending will be increased because of this, or how the composition of lending will change? Will there be, for instance, more lending to small businesses or lending to multi-family housing? Will there be more lending across-the-board, or would you expect disproportionate increases in certain areas?

MR. LUDWIG: Ken, you know that it's hard to give a hard and fast rule, particularly on a system where we want to be flexible, we don't want to have credit allocation or quotas.

At the same time, the CRA, for all its flaws, since 1977 it is generally agreed has increased lending in low and moderate income areas by tens of billions of dollars. We're all convinced that this is a material step forward. So it's very safe to say billions of dollars.

Bottom line is if you go through this entire press briefing, it was plainly clear the Clinton administration leaned on banks to guarantee subprime loans to people and businesses who has no ability to repay them, greasing the skids for the current fiasco.

Will any reporters out there go back and review this?

Not likely.