It is taken as an article of faith by many in this forum and in the broader political sphere that the Community Reinvestment Act (CRA) forced lenders to issue sub-prime loans; and that the failure of people to be able to repay these loans is what caused the market to collapse. However, the conservative CATO Institute published a paper (beware PDF) in 2000 -- as a critique of the CRA as redundant and unnecessary -- that claimed that the CRA had little to do with the growth in the issuance of sub-prime mortgages, and that indeed most of the sub-prime mortgages being issued were by lending institutions outside of the CRA purview -- IOW, lending institutions NOT "forced" by the CRA to lend to the people they did. Relevant portions here: Straight from the conservative horse's mouth. The CRA certainly wasn't forcing the growth in sub-prime lending among institutions not subject to the CRA, and that's where the bulk of the growth in sub-prime lending occurred -- among people who were the "best and brightest", and who were alleged to be so good at risk-management. They willingly got on board the sub-prime bus, and rode it as far as the profits would take them. They certainly weren't forced to make the loans, as they were outside the requirements of the CRA. But, the CRA makes a convenient scapegoat.