Law Commons^™

The Community Reinvestment Act: Guilty, But Not As Charged, Raymond H. Brescia

St. John's Law Review

(Excerpt)

With the goals of assessing the state of the research on the CRA and drawing some insights into what reforms this research suggests, this Article proceeds as follows. Part I provides an overview of the CRA's structure and reach. Part II provides an overview of the impact of the financial crisis on low- and moderate-income communities, particularly communities of color. Part III assesses the current state of the research, with particular emphasis on the NBER report described above. Part IV identifies the disconnect between the CRA's reach and its goals given the current state of banking and makes suggestions …

Bank Regulation And Securitization: How The Law Improved Transmission Lines Between Real Estate And Banking Crises, Erik F. Gerding

Publications

This essay examines how securitization served as a new coupling rod joining cycles in real estate and banking markets and created a new pathway for financial contagion in the “subprime” financial crisis. Legal changes promoted the growth of securitization and improved this crisis transmission line. The essay examines the history of legislative and regulatory changes that facilitated bank participation in the markets for mortgage-backed securities. The essay then explains how securitization failed to mitigate the credit, liquidity, and interest rate risk associated with real estate when losses in residential markets became correlated nationwide. It then discusses how regulation contributed to …