If you're a lender you risk losing FDIC and other government services if you don't lend in a way "serves the convenience and needs" of the broke-ass, low income people in "the community that you're chartered to do business."
Clinton's big change was that he opened the gates for Fannie and Freddie to buy mortgage backed securities. Originate the loan and sell it to a private investor or if the MBS is too shitty, Fannie or Freddie would have bought it. Read up:
http://en.wikipedia.org/wiki/Governm..._in_the_crisis
Can you really blame the banks for doing something that was profitable and
given a gold stamp of approval by Uncle Sam? It became like a game of musical chairs, you knew it was going to all come crashing down at some point, but you always hoped it would be someone else who took the fall.
SEC. 802. (a) The Congress finds that--
(1) regulated financial institutions are required by law to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business;
(2) the convenience and needs of communities include the need for credit services as well as deposit services; and
(3) regulated financial institutions have continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered.
(b) It is the purpose of this title to require each appropriate Federal financial supervisory agency to use its authority when examining financial institutions, to encourage such institutions to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions.
Are the banks blameless?...Hell no, but the government holds more blame than any bank. Where did all of this start? Fannie and Freddie, the two most fucked "banks" there have ever been.