Today's papers carry the story that while mortgage lenders acknowledge the on going disaster, they battle even the smalled attempt at regulation.   In response, former Iowa AAG Kathleen Keest, who not is a sr. policy counsel at the Center for Responsible Lending, was quoted in the NYT as saying: "The Fed has accurately diagnosed that this is a brain tumor and responded by prescribing an asprin....in the industry, there is a fair amount of denial.   They just don't get it.  There is a calamity within the industry, and they don't have a new script yet, so they rely on the old script, which is that regulation will raise costs."

"What we now see is that the unintended consequences of deregulation are worse.   Their line is that regulation will cut back access to credit.  That's been their line ever since the small loan laws were adopted in the early 1900's."

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