There is plenty of blame to go around in this whole forsaken mess and if every member of congress got thrown out of office this Nov. 4  I'd say good riddens.

 There is an ongoing narrative that says this whole thing is the fault of the Community Reinvestment Act (CRA).  I am by no means an expert but I have been doing my best to research it.  It seems only a fraction (1/5) of subprime loans come from banks that are fully regulated by the CRA.  And it is unclear how many of those loans were used to comply with CRA requirements and how many were made simply because subprime loans were good business.   Also default rates of CRA regulated loans were lower than default rates of subprime loans at non-CRA regulated banks.  CRA regulated banks are also more likely to hold on to their loans rather than bundling and reselling them and it's those bundled loans that are causing the major bank collapses.  It seems to me (and I could be wrong) that what the CRA argument misses is that selling these subprime loans was great business.  Especially because the loans could be bundled and sold at great profits to eager buyers thus mitigating the downside risk.  (While it lasted)  In fact I've seen several articles which called into question the need for the CRA because so many non-regulated lenders were entering the subprime market.  The Cato institute called the CRA the "Community Redundancy Act."  http://www.cato.org/pubs/regulation/regv23n3/gunther.pdf

"Growth in lending to low-income neighborhoods by institutions outside cra’s jurisdiction suggests deregulation and technological advances have increased competition, lowered information costs, and increased access to financial services. As a result, a good part of the lending in low-income neighborhoods by financial institutions subject to cra also might reflect those factors, rather than cra lending mandates. The available data support that proposition.  Most of the recent growth in lending by cra-covered institutions in low-income neighborhoods has occurred in areas where the institutions do not operate banking offices and have no cra obligations. The inescapable conclusion is that progress predicated on technology, financial innovation, and competition—not cra—has broadened the U.S. financial services marketplace."