Listen to the record of accomplishment of East Bridgewater Savings Bank of Massaschusetts:
- Zero bad or delinquent loans.
- Zero foreclosures
- No money set aside in 2008 for anticipated loan losses
- 28 cents in loans for every dollar in deposit (the average loan-to-deposit ratio among similar size savings banks is more than 90 percent).
How does the FDIC recognize this bank's record of accomplishment?
By slapping them with a "needs to improve" rating under the Community Preservation Act. Of course.
Recall what I, and many others, told you six months ago about the CPA:
In 1977, Congress passed the Community Reinvestment Act. One of the basic principles of the CRA is that "regulated financial institutions are required by law to demonstrate that their deposit facilities serve the convenience and needs of the communities." (Sec. 802.a.1)
So, instead of serving the needs of the bank's customers, employees, owners, and investors, the bank must serve the needs of the community. A private company, owned by private citizens, guarding the money of other private citizens is compelled by law to help meet the credit needs of its assessment area.
That is, the bank must change its standards to match the creditworthiness of people who happen to live near the bank.
(And here I have been trying to keep my credit clean so that I could meet the credit guidelines of the banks I want to work with. Silly me.)
It is anti-America, anti-constitutional, and anti-capitalism for the federal government to affect the lending policies of a private institution that is committing no crime.
Nonsensical feel-good Liberal notions like the Community Reinvestment Act is the primary reason why this country is in its current mess. Rewarding banks for suicidal lending practices and chastising banks for doing what is in the best interest of the banks and its constituents is sheer lunacy.
Welcome to the United States of Obama.
