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March 17, 2009

Sweet Fancy Moses: Bank Rapped for Keeping Balance Sheets, um, Balanced; Feds Censure It for Not Aggressively Enough Pouring Money Down CRA Rathole

I didn't want to link Hot Air again so early, but I need to.

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,” [Joseph] Petrucelli said. The 62-year-old chief executive has run the bank since 1992.

...

The FDIC’s negative review of East Bridgewater Savings Bank’s loan volume is an anomaly in today’s current banking scene as lenders reel from their role in offering too many cruddy mortgage products to borrowers with weak credit.

Still, the FDIC slapped East Bridgewater Savings with a rare “needs to improve” rating after evaluating the bank under the Community Reinvestment Act.

The claim is that the bank didn't advertise its rates well enough. What they mean is that the bank didn't set out to court borrowers who couldn't pay the money back.

We had an argument here about CRA. I forget what the actual point of contention was. I believe it had to do with Bush's initial TARP, and whether or not we had to stop the CRA prior to TARP. Quinn and others contested that unless we stopped that madness, we'd just have more of it.

I disagreed. I contended, if memory serves, that legislators must already be so chastened by the bomb they'd built with the CRA that action in ending this insane program (or at least making it sane) was guaranteed; we hardly had to agitate for such a thing. It was such an unmitigated disaster we could trust even liberals to run to fix the CRA, for fear of their own political survival.

Well. I guess I nailed that one, huh?

The MSM has so effectively blacked out the real causes of the crisis -- all in an effort, of course, to blame it on Bush's tax cuts, deregulation, a lack of universal health care, and global warming (Obama's thesis, of course: he contends we fix the financial mess by addressing these wholly unrelated issues) -- that the public simply doesn't know about this at all. What should have been the outrage of the decade is altogether unknown by the public at large.

I have often noted that 2008 was the media's year of asserting its power. They answered the threat of alternative media by demonstrating that they had both the power and inclination to throw a presidential election whichever way they chose by their misreporting and censorship.

That display of power -- and malfeasance -- continues.



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posted by Ace at 11:05 AM

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