In a speech last week John Dugan, comptroller of the currency, issued a strong defense of the Community Reinvestment Act — a direct response to CRA critics such as U.S. Rep. Michele Bachmann, R-Minn., who have laid blame for the current housing crisis on anti-redlining legislation. Dugan said:

John Dugan (Photo: Harry Connolly)

John Dugan (Photo: Harry Connolly)

… [C]urrent market disruptions have clouded the accomplishments that CRA has generated, many of which we recognized last year during its 30th anniversary. There are even some who suggest that CRA is responsible for the binge of irresponsible subprime lending that ignited the credit crisis we now face. Let me squarely respond to this suggestion: I categorically disagree. While not perfect, CRA has made a positive contribution to community revitalization across the country and has generally encouraged sound community development lending, investment, and service initiatives by regulated banking organizations. CRA is not the culprit behind the subprime mortgage lending abuses, or the broader credit quality issues in the marketplace. Indeed, the lenders most prominently associated with subprime mortgage lending abuses and high rates of foreclosure are lenders not subject to CRA.

Dugan, a 2005 Bush appointee, also served the Department of Treasury under the first President Bush, and was Republican general counsel to the U.S. Senate Committee on Banking, Housing, and Urban Affairs. His remarks (full transcript) came during the Economic Community Partners annual meeting in Baltimore.