HMDA: A Perfect Example of Regulation

The HMDA, or the Home Mortgage Disclosure Act, is the act implemented for the regulation of the mortgage market. Enacted in 1975, it has been applauded for the increase of lending to low-income families and a decrease in the racial disparities. These are good reasons for applause, but as a cynical skeptic, I must raise concern of its presence in context to the current credit crisis that has gripped out country. Right now, there is a great deal of pressure on the insurance industries to adopt similar regulation at the federal level. I am a strong supporter of deregulation and free markets. Not only do I support deregulation, but I would like to use the same example pro-regulation supporters use to support their cause. HMDA is a perfect example of regulation at the federal level not being effective. There are far more factors involved in these markets than can be regulated, and regulation at the federal level interferes with the local and global market interactions. As we tweak different pieces of our economic world in the hopes of being able to control it, I can't help but feel like it is just an attempt to validate and secure another job for somebody as a middle-man. As middle-men get squeezed out of the marketplace, they seem to end up before the federal government, and then proceed to interfere in the functions of the economic world because they think something is wrong with it when they are not able to find the success they assume is their justifiable due. Regulation of markets produce complications. Then, when these complications arise, pro-regulation supporters cry for more regulation as an example of it. What an odd world we live in.