We should all agree with this!

[Toddsterpatriot]

CRA forced banks to make loans which then defaulted at a higher rate.

LOL, SURE, SURE

The study is severely flawed, both in terms of the empirical analysis and in the authors’ interpretation of the results


One of the pernicious myths surrounding CRA is that it encouraged banks to make risky loans to low‐ and moderate‐income borrowers.

UNC Center for Community Capital





The latest failed effort to blame the Community Reinvestment Act for Accounting Control Fraud


Their thesis statement thesis may seem clear, but it is actually imprecise and arbitrary and reveals disabling errors in their methodology. It fails to exclude alternative explanations for why lending could vary in a time period near a CRA examination. Its imprecision as to when banks supposedly made loans based on the CRA combined with the lack of a convincing causal explanation as to why loans made in this particular time window would have prompted by the CRA while loans outside the window would not be demonstrates fatal flaws in the study’s design.

The study fails to consider alternative explanations


The ABBS (2012) study design also fails to consider a range of other factors relevant to causality that would demonstrate the inability of their thesis to explain the broader pattern of the crisis. I discuss why accounting control fraud provides a superior explanation for the lending pattern that the authors found.


If their thesis were correct then CRA would have produced ever fewer bad loans from 1999 on as the CRA examination frequency was cut sharply for smaller banks by the Gramm Leach Bliley Act from every two years to every five years (ABBS 2012: 11-12). Further, under the Bush administration, CRA supervision became ever weaker compared to the Clinton administration.


The latest failed effort to blame the Community Reinvestment Act for Accounting Control Fraud - New Economic PerspectivesNew Economic Perspectives

If their thesis were correct then CRA would have produced ever fewer bad loans from 1999 on as the CRA examination frequency was cut sharply for smaller banks by the Gramm Leach Bliley Act from every two years to every five years

Fewer bad loans is still bad loans. CRA forced banks to make loans which then defaulted at a higher rate.

"CRA forced banks"


NOPE

"to make loans which then defaulted at a higher rate"

NOPE


mortgages originated for CRA purposes have performed at much higher rates than loans originated for private securitization, going into foreclosure 60 percent less often than loans originated by independent mortgage companies that were key to providing the mortgages needed to supply private securitization.



http://www.frbsf.org/community-development/files/wp08-051.pdf


Keep trying Bubba

The authors’ failure to provide a coherent logical explanation for their thesis

Note that the authors claim that the CRA led to “risky lending.” That would be very odd given what the authors admit about the CRA’s provisions.

“The Community Reinvestment Act of 1977 instructs federal financial supervisory agencies to encourage their regulated financial institutions to help meet credit needs of the communities in which they are chartered while also conforming to “safe and sound” lending standards



An obvious problem with the authors’ claim that the CRA caused “risky lending” is that the law calls for “safe and sound” lending standards.


If lenders chose to engage in “risky lending” they did so in contravention of the instructions of the CRA and the banking examiners.


The latest failed effort to blame the Community Reinvestment Act for Accounting Control Fraud - New Economic PerspectivesNew Economic Perspectives

mortgages originated for CRA purposes have performed at much higher rates than loans originated for private securitization

And at lower rates than non-CRA loans at banks.

 

[Dad2three]

If their thesis were correct then CRA would have produced ever fewer bad loans from 1999 on as the CRA examination frequency was cut sharply for smaller banks by the Gramm Leach Bliley Act from every two years to every five years

Fewer bad loans is still bad loans. CRA forced banks to make loans which then defaulted at a higher rate.

"CRA forced banks"


NOPE

"to make loans which then defaulted at a higher rate"

NOPE


mortgages originated for CRA purposes have performed at much higher rates than loans originated for private securitization, going into foreclosure 60 percent less often than loans originated by independent mortgage companies that were key to providing the mortgages needed to supply private securitization.



http://www.frbsf.org/community-development/files/wp08-051.pdf


Keep trying Bubba

The authors’ failure to provide a coherent logical explanation for their thesis

Note that the authors claim that the CRA led to “risky lending.” That would be very odd given what the authors admit about the CRA’s provisions.

“The Community Reinvestment Act of 1977 instructs federal financial supervisory agencies to encourage their regulated financial institutions to help meet credit needs of the communities in which they are chartered while also conforming to “safe and sound” lending standards



An obvious problem with the authors’ claim that the CRA caused “risky lending” is that the law calls for “safe and sound” lending standards.


If lenders chose to engage in “risky lending” they did so in contravention of the instructions of the CRA and the banking examiners.


The latest failed effort to blame the Community Reinvestment Act for Accounting Control Fraud - New Economic PerspectivesNew Economic Perspectives

mortgages originated for CRA purposes have performed at much higher rates than loans originated for private securitization

And at lower rates than non-CRA loans at banks.

PROOF? lol

An obvious problem with the authors’ claim that the CRA caused “risky lending” is that the law calls for “safe and sound” lending standards.


If lenders chose to engage in “risky lending” they did so in contravention of the instructions of the CRA and the banking examiners.

 

[Toddsterpatriot]

"CRA forced banks"


NOPE

"to make loans which then defaulted at a higher rate"

NOPE


mortgages originated for CRA purposes have performed at much higher rates than loans originated for private securitization, going into foreclosure 60 percent less often than loans originated by independent mortgage companies that were key to providing the mortgages needed to supply private securitization.



http://www.frbsf.org/community-development/files/wp08-051.pdf


Keep trying Bubba

The authors’ failure to provide a coherent logical explanation for their thesis

Note that the authors claim that the CRA led to “risky lending.” That would be very odd given what the authors admit about the CRA’s provisions.

“The Community Reinvestment Act of 1977 instructs federal financial supervisory agencies to encourage their regulated financial institutions to help meet credit needs of the communities in which they are chartered while also conforming to “safe and sound” lending standards



An obvious problem with the authors’ claim that the CRA caused “risky lending” is that the law calls for “safe and sound” lending standards.


If lenders chose to engage in “risky lending” they did so in contravention of the instructions of the CRA and the banking examiners.


The latest failed effort to blame the Community Reinvestment Act for Accounting Control Fraud - New Economic PerspectivesNew Economic Perspectives

mortgages originated for CRA purposes have performed at much higher rates than loans originated for private securitization

And at lower rates than non-CRA loans at banks.

PROOF? lol

An obvious problem with the authors’ claim that the CRA caused “risky lending” is that the law calls for “safe and sound” lending standards.


If lenders chose to engage in “risky lending” they did so in contravention of the instructions of the CRA and the banking examiners.

We find that adherence to the act led to riskier lending by banks: in the six quarters surrounding the CRA exams lending is elevated on average by about 5 percent every quarter and loans in these quarters default by about 15 percent more often. These patterns are accentuated in CRA-eligible census tracts and are concentrated among large banks.

ESL? LOL!

 

[Toddsterpatriot]

"CRA forced banks"


NOPE

"to make loans which then defaulted at a higher rate"

NOPE


mortgages originated for CRA purposes have performed at much higher rates than loans originated for private securitization, going into foreclosure 60 percent less often than loans originated by independent mortgage companies that were key to providing the mortgages needed to supply private securitization.



http://www.frbsf.org/community-development/files/wp08-051.pdf


Keep trying Bubba

The authors’ failure to provide a coherent logical explanation for their thesis

Note that the authors claim that the CRA led to “risky lending.” That would be very odd given what the authors admit about the CRA’s provisions.

“The Community Reinvestment Act of 1977 instructs federal financial supervisory agencies to encourage their regulated financial institutions to help meet credit needs of the communities in which they are chartered while also conforming to “safe and sound” lending standards



An obvious problem with the authors’ claim that the CRA caused “risky lending” is that the law calls for “safe and sound” lending standards.


If lenders chose to engage in “risky lending” they did so in contravention of the instructions of the CRA and the banking examiners.


The latest failed effort to blame the Community Reinvestment Act for Accounting Control Fraud - New Economic PerspectivesNew Economic Perspectives

mortgages originated for CRA purposes have performed at much higher rates than loans originated for private securitization

And at lower rates than non-CRA loans at banks.

PROOF? lol

An obvious problem with the authors’ claim that the CRA caused “risky lending” is that the law calls for “safe and sound” lending standards.


If lenders chose to engage in “risky lending” they did so in contravention of the instructions of the CRA and the banking examiners.

the law calls for “safe and sound” lending standards.

"We only make safe and sound loans"

RACIST!!!

 

[Nemo]

We have had subsidized housing at the federal, state, county and municipal level for decades. These were not the loans that were the problem.

 

[Rshermr]

mortgages originated for CRA purposes have performed at much higher rates than loans originated for private securitization

And at lower rates than non-CRA loans at banks.

PROOF? lol

An obvious problem with the authors’ claim that the CRA caused “risky lending” is that the law calls for “safe and sound” lending standards.


If lenders chose to engage in “risky lending” they did so in contravention of the instructions of the CRA and the banking examiners.

the law calls for “safe and sound” lending standards.

"We only make safe and sound loans"

RACIST!!!

You seem to find race as the issue from time to time. Did you have a point, or was it a poor attempt at humor??

 

[PredFan]

Anyone with an open mind and a clear head willing to vote and comment?

I don't know enough about it to decide. The fact that you, McCain, and Warren are against it kind of makes me support it, tbh.

 

[Toddsterpatriot]

PROOF? lol

An obvious problem with the authors’ claim that the CRA caused “risky lending” is that the law calls for “safe and sound” lending standards.


If lenders chose to engage in “risky lending” they did so in contravention of the instructions of the CRA and the banking examiners.

the law calls for “safe and sound” lending standards.

"We only make safe and sound loans"

RACIST!!!

You seem to find race as the issue from time to time. Did you have a point, or was it a poor attempt at humor??

Sorry, I was channelling Jesse Jackson and Barack Obama, back in their neighborhood bank shakedown phase.

 

[ShackledNation]

Surprisingly, this is one of the few times where I will agree that we need regulation. Is it the best solution? No. But it comes in second. (The best solution is to have free market banking and get rid of the Federal Reserve, but that isn't where we are headed sadly).

Why? I agree with Rothbard:

Banking is not a legitimate industry, providing legitimate service, so long as it continues to be a system of fractional-reserve banking: that is, the fraudulent making of contracts that it is impossible to honor.

What an act like this is regulating is not free market banking, but central banking and fractional reserve banking--both of which cause enormous problems. More controls in the framework of central banking can only slow down the pace of the erosion of real-wealth formation. They cannot prevent the erosion but simply suppress banks' ability to amplify the Fed's pumping. In this sense, controls are preferable to a so-called deregulated banking sector, but inferior to free market banking.

 

[Toddsterpatriot]

Surprisingly, this is one of the few times where I will agree that we need regulation. Is it the best solution? No. But it comes in second. (The best solution is to have free market banking and get rid of the Federal Reserve, but that isn't where we are headed sadly).

Why? I agree with Rothbard:

Banking is not a legitimate industry, providing legitimate service, so long as it continues to be a system of fractional-reserve banking: that is, the fraudulent making of contracts that it is impossible to honor.

What an act like this is regulating is not free market banking, but central banking and fractional reserve banking--both of which cause enormous problems. More controls in the framework of central banking can only slow down the pace of the erosion of real-wealth formation. They cannot prevent the erosion but simply suppress banks' ability to amplify the Fed's pumping. In this sense, controls are preferable to a so-called deregulated banking sector, but inferior to free market banking.

Banking is not a legitimate industry, providing legitimate service, so long as it continues to be a system of fractional-reserve banking:

I love these silly complaints.
Yes, banking is fractional reserve. What does that mean?
A bank takes in $100 in deposits and loans out less than $100 and holds the rest in reserve.

What is the alternative? Holding the entire $100 in reserve and lending out $0?

 

[warwulf]

As long as jews run the banks we'll remain to be plucked and f*&ked by them.

 

[Toddsterpatriot]

As long as jews run the banks we'll remain to be plucked and f*&ked by them.

Jewish guy banging your girlfriend?

 

[WheelieAddict]

Well I am pleasantly surprised most agree. Apparently there are still a few dumb fucks that think deregulalting the banking industry had nothing to do with the economy shitting a brick.

 

[WheelieAddict]

As long as jews run the banks we'll remain to be plucked and f*&ked by them.

You have surpassed Todd in stupidity. Congrats on your achievement.

 

[Toddsterpatriot]

Well I am pleasantly surprised most agree. Apparently there are still a few dumb fucks that think deregulalting the banking industry had nothing to do with the economy shitting a brick.

Which regulations do you feel were removed?

Which regulations would have prevented the crisis?

Use both IQ points.

 

[ShackledNation]

Surprisingly, this is one of the few times where I will agree that we need regulation. Is it the best solution? No. But it comes in second. (The best solution is to have free market banking and get rid of the Federal Reserve, but that isn't where we are headed sadly).

Why? I agree with Rothbard:

Banking is not a legitimate industry, providing legitimate service, so long as it continues to be a system of fractional-reserve banking: that is, the fraudulent making of contracts that it is impossible to honor.

What an act like this is regulating is not free market banking, but central banking and fractional reserve banking--both of which cause enormous problems. More controls in the framework of central banking can only slow down the pace of the erosion of real-wealth formation. They cannot prevent the erosion but simply suppress banks' ability to amplify the Fed's pumping. In this sense, controls are preferable to a so-called deregulated banking sector, but inferior to free market banking.

Banking is not a legitimate industry, providing legitimate service, so long as it continues to be a system of fractional-reserve banking:

I love these silly complaints.
Yes, banking is fractional reserve. What does that mean?
A bank takes in $100 in deposits and loans out less than $100 and holds the rest in reserve.

What is the alternative? Holding the entire $100 in reserve and lending out $0?

That is not exactly what fractional reserve banking is, but I will not address that for now. There is enormous literature regarding the problems caused (such as dis-aligning available credit with actual savings), but I don't want to hijack this topic and discuss it.

The alternative is separating demand deposits from time deposits. Whatever money you want to be able to spend at any given time goes in a demand deposit. Money that you wish to save and don't intend to spend will go into a time deposit, whereby you cannot withdraw the money for a set amount of time during which the bank uses that money to make loans.

Regardless, such a reform would be massive and highly unlikely, which is why I support the 2nd best option of regulating a bad banking system so it does harm at a slower rate.

 

[Toddsterpatriot]

Surprisingly, this is one of the few times where I will agree that we need regulation. Is it the best solution? No. But it comes in second. (The best solution is to have free market banking and get rid of the Federal Reserve, but that isn't where we are headed sadly).

Why? I agree with Rothbard:

Banking is not a legitimate industry, providing legitimate service, so long as it continues to be a system of fractional-reserve banking: that is, the fraudulent making of contracts that it is impossible to honor.

What an act like this is regulating is not free market banking, but central banking and fractional reserve banking--both of which cause enormous problems. More controls in the framework of central banking can only slow down the pace of the erosion of real-wealth formation. They cannot prevent the erosion but simply suppress banks' ability to amplify the Fed's pumping. In this sense, controls are preferable to a so-called deregulated banking sector, but inferior to free market banking.

Banking is not a legitimate industry, providing legitimate service, so long as it continues to be a system of fractional-reserve banking:

I love these silly complaints.
Yes, banking is fractional reserve. What does that mean?
A bank takes in $100 in deposits and loans out less than $100 and holds the rest in reserve.

What is the alternative? Holding the entire $100 in reserve and lending out $0?

That is not exactly what fractional reserve banking is, but I will not address that for now. There is enormous literature regarding the problems caused (such as dis-aligning available credit with actual savings), but I don't want to hijack this topic and discuss it.

The alternative is separating demand deposits from time deposits. Whatever money you want to be able to spend at any given time goes in a demand deposit. Money that you wish to save and don't intend to spend will go into a time deposit, whereby you cannot withdraw the money for a set amount of time during which the bank uses that money to make loans.

Regardless, such a reform would be massive and highly unlikely, which is why I support the 2nd best option of regulating a bad banking system so it does harm at a slower rate.

That is not exactly what fractional reserve banking is, but I will not address that for now.

Please, address it now. Correct my misunderstanding.

The alternative is separating demand deposits from time deposits.

What do you feel that would accomplish?
Currently, time deposits have a 0% reserve requirement.
I guess 0% reserve is better than a 10% reserve?

 

[ShackledNation]

Banking is not a legitimate industry, providing legitimate service, so long as it continues to be a system of fractional-reserve banking:

I love these silly complaints.
Yes, banking is fractional reserve. What does that mean?
A bank takes in $100 in deposits and loans out less than $100 and holds the rest in reserve.

What is the alternative? Holding the entire $100 in reserve and lending out $0?

That is not exactly what fractional reserve banking is, but I will not address that for now. There is enormous literature regarding the problems caused (such as dis-aligning available credit with actual savings), but I don't want to hijack this topic and discuss it.

The alternative is separating demand deposits from time deposits. Whatever money you want to be able to spend at any given time goes in a demand deposit. Money that you wish to save and don't intend to spend will go into a time deposit, whereby you cannot withdraw the money for a set amount of time during which the bank uses that money to make loans.

Regardless, such a reform would be massive and highly unlikely, which is why I support the 2nd best option of regulating a bad banking system so it does harm at a slower rate.

That is not exactly what fractional reserve banking is, but I will not address that for now.

Please, address it now. Correct my misunderstanding.

Ok. I apologize to whoever started this thread for going on a bit of a tangent.

This is just a rough description from wikipedia:
"In most legal systems, a bank deposit is not a bailment. In other words, the funds deposited are no longer the property of the customer. The funds become the property of the bank, and the customer in turn receives an asset called a deposit account (a checking or savings account). That deposit account is a liability of the bank on the bank's books and on its balance sheet. Because the bank is authorized by law to create credit up to an amount equal to a multiple of the amount of its reserves, the bank's reserves on hand to satisfy payment of deposit liabilities amount to only a fraction of the total amount which the bank is obligated to pay in satisfaction of its demand deposits."

The bolded portion is what matters. Banks do not accept a $100 deposit and then loan out $90 of those dollars. They accept a $100 deposit then create a deposit account for the customer (saying he can withdraw the cash at any time, or reduce his deposit account balance through debit/credit/checking without ever touching the cash).

The bank does not then lend out $90 in cash to someone else and call it a day. The bank expands credit, and can make loans of up to $900. Again, these loans are made not through cash but by giving lenders accounts at the bank with a claim to the cash value of the loan. The bank then has $90 in cash on reserve, and $1000 in claims to that cash in the form of demand deposits and loans. That $90 in cash satisfies the 10% reserve requirement. The result is that we have $100 in a demand deposits financing $900 in loans and a $100 demand deposit. Hence, savings and credit are not aligned, which can cause serious problems.

The alternative is separating demand deposits from time deposits.

What do you feel that would accomplish?
Currently, time deposits have a 0% reserve requirement.
I guess 0% reserve is better than a 10% reserve?

Demand deposits would have a 100% reserve requirement. Banks could not lend that money, and depositors would always have access to it for spending.

Time deposits would of course have a 0% reserve requirement, but depositors would not be able to withdraw the money to spend it for a certain time period. That is the whole point of a time deposit. You are essentially lending the bank your money so they can loan it to other people. Often times you will get paid a portion of the interest the bank makes from the loans in return, which is what encourages people to use time deposits rather than purely demand deposits. This ensures available credit is always in line with savings, and would prevent banks from expanding the supply of money in order to line their coffers at our expense.

 

[Toddsterpatriot]

That is not exactly what fractional reserve banking is, but I will not address that for now. There is enormous literature regarding the problems caused (such as dis-aligning available credit with actual savings), but I don't want to hijack this topic and discuss it.

The alternative is separating demand deposits from time deposits. Whatever money you want to be able to spend at any given time goes in a demand deposit. Money that you wish to save and don't intend to spend will go into a time deposit, whereby you cannot withdraw the money for a set amount of time during which the bank uses that money to make loans.

Regardless, such a reform would be massive and highly unlikely, which is why I support the 2nd best option of regulating a bad banking system so it does harm at a slower rate.

That is not exactly what fractional reserve banking is, but I will not address that for now.

Please, address it now. Correct my misunderstanding.

Ok. I apologize to whoever started this thread for going on a bit of a tangent.

This is just a rough description from wikipedia:
"In most legal systems, a bank deposit is not a bailment. In other words, the funds deposited are no longer the property of the customer. The funds become the property of the bank, and the customer in turn receives an asset called a deposit account (a checking or savings account). That deposit account is a liability of the bank on the bank's books and on its balance sheet. Because the bank is authorized by law to create credit up to an amount equal to a multiple of the amount of its reserves, the bank's reserves on hand to satisfy payment of deposit liabilities amount to only a fraction of the total amount which the bank is obligated to pay in satisfaction of its demand deposits."

The bolded portion is what matters. Banks do not accept a $100 deposit and then loan out $90 of those dollars. They accept a $100 deposit then create a deposit account for the customer (saying he can withdraw the cash at any time, or reduce his deposit account balance through debit/credit/checking without ever touching the cash).

The bank does not then lend out $90 in cash to someone else and call it a day. The bank expands credit, and can make loans of up to $900. Again, these loans are made not through cash but by giving lenders accounts at the bank with a claim to the cash value of the loan. The bank then has $90 in cash on reserve, and $1000 in claims to that cash in the form of demand deposits and loans. That $90 in cash satisfies the 10% reserve requirement. The result is that we have $100 in a demand deposits financing $900 in loans and a $100 demand deposit. Hence, savings and credit are not aligned, which can cause serious problems.

The alternative is separating demand deposits from time deposits.

What do you feel that would accomplish?
Currently, time deposits have a 0% reserve requirement.
I guess 0% reserve is better than a 10% reserve?

Demand deposits would have a 100% reserve requirement. Banks could not lend that money, and depositors would always have access to it for spending.

Time deposits would of course have a 0% reserve requirement, but depositors would not be able to withdraw the money to spend it for a certain time period. That is the whole point of a time deposit. You are essentially lending the bank your money so they can loan it to people. Often times you will get paid a portion of the interest the bank makes from the loans in return, which is what encourages people to use time deposits rather than purely demand deposits. This ensures available credit is always in line with savings.

Because the bank is authorized by law to create credit up to an amount equal to a multiple of the amount of its reserves,

And with the $100 deposit, $10 in reserves, they can create credit up to $90, 9 times their reserves.

Banks do not accept a $100 deposit and then loan out $90 of those dollars. They accept a $100 deposit then create a deposit account for the customer (saying he can withdraw the cash at any time, or reduce his deposit account balance through debit/credit/checking without ever touching the cash).

When the customer takes the $90 out of the "deposit account", how is that different from the bank accepting a $100 deposit and loaning out $90?
I'll save you the trouble, it isn't different at all.

The bank expands credit, and can make loans of up to $900.

That is incorrect. A bank with $100 in deposits that makes $900 in loans would quickly be shut down, its officers thrown in jail.

Again, these loans are made not through cash but by giving lenders accounts at the bank with a claim to the cash value of the loan.

Again, a bank with $100 in deposits that gives out $900 in claims (loans) shuts down very quickly. Borrowers tend not to leave their loan in an account at the bank they borrowed from. The money is withdrawn to pay for the house, car etc.

The result is that we have $100 in a demand deposits financing $900 in loans

No, every loan is fully funded. No money from thin air. Sorry.

 

[ShackledNation]

That is not exactly what fractional reserve banking is, but I will not address that for now.

Please, address it now. Correct my misunderstanding.

Ok. I apologize to whoever started this thread for going on a bit of a tangent.

This is just a rough description from wikipedia:
"In most legal systems, a bank deposit is not a bailment. In other words, the funds deposited are no longer the property of the customer. The funds become the property of the bank, and the customer in turn receives an asset called a deposit account (a checking or savings account). That deposit account is a liability of the bank on the bank's books and on its balance sheet. Because the bank is authorized by law to create credit up to an amount equal to a multiple of the amount of its reserves, the bank's reserves on hand to satisfy payment of deposit liabilities amount to only a fraction of the total amount which the bank is obligated to pay in satisfaction of its demand deposits."

The bolded portion is what matters. Banks do not accept a $100 deposit and then loan out $90 of those dollars. They accept a $100 deposit then create a deposit account for the customer (saying he can withdraw the cash at any time, or reduce his deposit account balance through debit/credit/checking without ever touching the cash).

The bank does not then lend out $90 in cash to someone else and call it a day. The bank expands credit, and can make loans of up to $900. Again, these loans are made not through cash but by giving lenders accounts at the bank with a claim to the cash value of the loan. The bank then has $90 in cash on reserve, and $1000 in claims to that cash in the form of demand deposits and loans. That $90 in cash satisfies the 10% reserve requirement. The result is that we have $100 in a demand deposits financing $900 in loans and a $100 demand deposit. Hence, savings and credit are not aligned, which can cause serious problems.

The alternative is separating demand deposits from time deposits.

What do you feel that would accomplish?
Currently, time deposits have a 0% reserve requirement.
I guess 0% reserve is better than a 10% reserve?

Demand deposits would have a 100% reserve requirement. Banks could not lend that money, and depositors would always have access to it for spending.

Time deposits would of course have a 0% reserve requirement, but depositors would not be able to withdraw the money to spend it for a certain time period. That is the whole point of a time deposit. You are essentially lending the bank your money so they can loan it to people. Often times you will get paid a portion of the interest the bank makes from the loans in return, which is what encourages people to use time deposits rather than purely demand deposits. This ensures available credit is always in line with savings.

Because the bank is authorized by law to create credit up to an amount equal to a multiple of the amount of its reserves,

And with the $100 deposit, $10 in reserves, they can create credit up to $90, 9 times their reserves.

Banks do not accept a $100 deposit and then loan out $90 of those dollars. They accept a $100 deposit then create a deposit account for the customer (saying he can withdraw the cash at any time, or reduce his deposit account balance through debit/credit/checking without ever touching the cash).

When the customer takes the $90 out of the "deposit account", how is that different from the bank accepting a $100 deposit and loaning out $90?
I'll save you the trouble, it isn't different at all.

The bank expands credit, and can make loans of up to $900.

That is incorrect. A bank with $100 in deposits that makes $900 in loans would quickly be shut down, its officers thrown in jail.

Again, these loans are made not through cash but by giving lenders accounts at the bank with a claim to the cash value of the loan.

Again, a bank with $100 in deposits that gives out $900 in claims (loans) shuts down very quickly. Borrowers tend not to leave their loan in an account at the bank they borrowed from. The money is withdrawn to pay for the house, car etc.

The result is that we have $100 in a demand deposits financing $900 in loans

No, every loan is fully funded. No money from thin air. Sorry.

Sorry, you are incorrect. If you will not acknowledge that banks create money through the expansion of credit, there is really no point in discussing anything with you. This is simply a fundamental reality of our banking system.

Here are some sources to prove my point.
Banks Don't Lend Out Reserves - Forbes
Learning Markets - Investing education and trading ideas

Under 10% reserves, banks ultimatley loan out 9 times the amount of deposits. All you have to do is to look at the U.S. money supply to verify this.