This past fall, conservative politicians and commentators couldn’t stop talking about the Community Reinvestment Act (CRA), a straightforward law passed by former President Jimmy Carter requiring banks to loan throughout the communities they serve. Right-wingers incessantly argued that it caused the nation’s mortgage crisis by putting tremendous pressure on banks to extend risky mortgages to unfit borrowers.

We did our due diligence debunking the myth, even tracking down the only banker in the 1970s to testify on Capitol Hill in favor of the legislation. Then, at a hearing of the U.S. House Financial Institutions Subcommittee yesterday, a chief federal reserve regulator ended the CRA debate once and for all -- or so we hope.

Huffington Post’s Ryan Grim reports:

“I can state very definitively that, from the research we have done, that the Community Reinvestment Act is not one of the causes of the current crisis,” said Sandra Braunstein [pictured above], Director of the Division of Consumer and Community Affairs of the Federal Reserve System. [...]

“We have run data on CRA lending and where loans are located, and we found that only six percent of all higher cost loans were made by CRA-covered institutions in neighborhoods targeted, which would be low to moderate income neighborhoods targeted by CRA,” said Braunstein. “So I can tell you if that’s where you’re going that CRA was not the cause of this loan crisis.”

Illinois’ own Rep. Luis Gutierrez, who chairs the committee, summed up the significance of Braunstein’s finding:

“Republicans have long tried to take the easy way out by pointing the finger at the Community Reinvestment Act and other government-sponsored affordable lending programs; but these programs did not cause our foreclosure crisis,” said Gutierrez. “The fact that only six percent of high-cost loans in our communities came from CRA institutions proves the true worth and value of the CRA to our neighborhoods.”