Banker points to Government as source of current financial crisis

In an editorial published in this weeks St. Louis Business Journal, Andrew Baur, of Southwest Bank, pointed to the U.S. Government as the source of our current financial crisis. According to Baur "The problem has its roots in 1977 with the passage of the Community Reinvestment Act." He went on to say:

Bank examiners were originally leery of CRA. Their emphasis had been on safety and soundness. Bank lenders were equally suspicious of bending policies. As time passed, legislative bodies began to enact programs working with banks to improve communities and satisfy terms of the act. At the same time an entire division of CRA examiners became part of the regulatory force. Zealous enforcement of the act was their agenda. If banks did not meet an outstanding or satisfactory rating on CRA, approval for acquisitions became difficult and organizations like ACORN protested.

As chairman of the bank, Baur should know what he is talking about. He goes on to outline how other intrusion into the private sector compounded the problems. See: Financial crisis traces roots to 1977 Community Reinvestment Act