>It's also another example of government messing up and not studying the real effects of legislation before voting on it. Back in 1980, Congress helped launch the subprime lending industry:
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>The ability to charge high rates and fees to borrowers was not possible until the Depository Institutions Deregulation and Monetary Control Act (DIDMCA) was adopted in 1980. It preempted state interest rate caps. The Alternative Mortgage Transaction Parity Act (AMTPA) in 1982 permitted the use of variable interest rates and balloon payments.
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>These laws opened the door for the development of a subprime market, but subprime lending would not become a viable large-scale lending alternative until the Tax Reform Act of 1986 (TRA). The TRA increased the demand for mortgage debt because it prohibited the deduction of interest on consumer loans, yet allowed interest deductions on mortgages for a primary residence as well as one additional home. This made even high-cost mortgage debt cheaper than consumer debt for many homeowners.
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>http://research.stlouisfed.org/publications/review/06/01/ChomPennCross.pdf

Why am I not surprised that opening the dams and issuing a de facto license to print money was a part of deregulation, which was actually Deregulation (aka charge into lawlessness).