Rep. Hensarling is up to examine the testifiers next. He is having fun with words:
- If banks are not required to make unsustainable loans, are they required to make sustainable loans?
- If the CRA is simple, then why is it, in the view of small banks, expensive? (Earlier, he mentioned how banks spend between $20,000 and $90,000 reporting on CRA.)
Taylor asks him why he is mixing up lending based on race with lending based upon income. It's a pretty good response.
- Why is Josh Silver looking off to the right? What is over there?
- Where are the rest of the Congressmen? The first three rows of seats are largely empty.
White is back, courtesy of a question for Rep. Neugebauer. He wants to do it through funding from taxpayers. He thinks
"CRA is the right thing to do." He wants more taxes - not popular with anyone, right or left.
LISC's Benson says that the CDFI fund works better by leveraging capital from private sources. A taxed system would require 30 times more capital from the government than it would from banks. Its an interesting point..that private funding leads to greater efficiencies. He also says that this is beneficial on a social level, as it drives banks into relationships within communities.
Frank breaks in to mention that his $14 million figure for ACORN funding by Bush may be artificially low. He says this is only from HUD...he will send a researcher out to find more.
- Watt: "If all of our banks in Charlotte decided not to make loans in African-American communities, would the anti-trust law step in to act against that?"
- White steps back..."well," he says, "I am not a lawyer."
- "Obviously, " says Watt. "I don't understand how you can assert to us that anti-trust laws are a substitute for CRA? Is authorizing Wal-Mart going to get into banking going to be a substitute for CRA?"
- White is reeling..."I don't understand."
- Watt: "I know you don't understand. I agree that we are underserved. Do you think that banks have any obligation to honor the communities where they work? Do banks have some obligations to serve the communities where they are?"
- White: (acting like a lawyer): "Under the law, apparently they do."
- Watt: You don't think it ought to be the law? I would be happier if you would just testify that you disagree with any CRA obligation. But to tell me that Wal-Mart is a satisfactory substitute for an oglibatgion, to tell me that anti-trust is a substitute...I don't understand that."
- White: if the problem is a lack of competition.
- Watt: Right, but I asked, is it a lack of service? It is a lack of service.
Watt's questioning is now over.
Rep. Royce then goes into a new line of questioning. He wants to know more about ACORN.