by Richard Morrison
October 2, 2008

Washington, D.C., October 2, 2008—A policy at the Competitive Enterprise Institute, a free market think tank, today harshly criticized the supposed “myth-busting” of the Center for American Progress’ Action Fund.

Michelle Minton, a policy analyst at the Competitive Enterprise institute and author of the paper The Community Reinvestment Act’s Harmful Legacy to the current crisis . “To an extent it’s correct to say that CRA isn’t the primary cause of today’s financial problems,” says Minton.  “In conjunction with other misguided regulations and the creation of a super-charged secondary market CRA fueled the reckless behavior that caused today’s problems” argues that the CRA contributed

Minton doesn’t blame borrowers or community groups for the problems, “Clearly the institutions who recklessly purchased risky mortgage backed securities are at fault,” she says. “Regulations intended to increase the availability of credit combined with government guarantees pushed institutions in the wrong direction.”

Minton’s paper The Community Reinvestment Act’s Harmful Legacy, is available at http://cei.org/node/20524.

CEI is a non-profit, non-partisan public policy group dedicated to the principles of free enterprise and limited government. For more information about CEI, please visit our website at www.cei.org.