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The present subprime financial strains have as its genesis the policies promoted in the Community Reinvestment Act (CRA), compliance with which is a prerequisite for financial institution innovation. The “Community Reinvestment Act” seeks input from “Community Organizers” like ACORN in rating financial institutions on their compliance in issuing subprime loans. Without satisfying “Community Organizers,” financial institutions cannot escape depression era restrictions on innovation. What is the price of this satisfaction? Today it seems to be the federal bailout of Fannie Mae and Freddie Mac, at the cost of billions of taxpayer dollars.
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