The world economy has tanked, Wall Street has crashed, trillions of dollars in imagined wealth has vanished, and do you know why?

The government forced neighborhood banks to loan money to poor people.

That, at least, is the explanation making the rounds on right-wing radio and from some conservative pundits.

Yes, if you believe this, it wasn't the unregulated derivatives market and its trillions in phony wealth, nor the wild real estate speculation that swept through Florida, Nevada and California. No, it's something called the Community Reinvestment Act. That's the 1977 law that essentially says banks need to make some home loans in neighborhoods where they take deposits.

Evidently, the rest of America could have kept borrowing and spending the money it didn't have forever were it for the buttinskies behind the CRA.

The class warfare behind this explanation would be obvious even if you didn't know that the predatory lenders making most of the subprime loans were independent mortgage companies not subject to any federal regulator.

"The idea that all these bad loans are out there because the CRA pressured the banks to go and be do-gooders is just complete crap,'' said Don Reed.

Mr. Reed kick-started the CRA program for Integra Bank in the late 1980s as its vice president for community development. Integra's predecessor, Union National, had never made a loan in a predominantly black neighborhood. Nobody on the North Side, white or black, could get a home loan before the CRA was enforced.

"Banks would happily take poor people's deposits but they wouldn't lend to them,'' Mark Fatla of the North Side Leadership Conference said.

Times change. In the 1970s, when no bank would make a mortgage on my North Side street, a big ol' Victorian home could be bought for less than $10,000. Now the same homes sell for more than $200,000 and suburbanites buy tickets to take house tours at Christmastime.

People such as Stanley Lowe of the Pittsburgh Community Reinvestment Group turned a light on banking practices, and community activists and lenders found common ground. Mr. Reed said his CRA loans in the 1980s and early '90s had lower delinquency rates than conventional loans.

He brought in good loan officers and he came down hard on sloppy work. He wanted underwriters who made sure the loans could be paid back.

Now too many banks farm out this work, said Mr. Reed, 67, who got out of banking more than a decade ago to go into woodworking.

Banks today buy loans from mortgage originators -- who get paid only if they manage to sell their product to a bank, he said. That leaves them little incentive to weed out bad risks, and these bad loans were in turn packaged into the toxic securities that brought down Wall Street.

"It was about greed,'' Mr. Reed said. "It wasn't about benefiting the community. You could comply with the CRA, make money and make good loans.''

Rick Swartz, executive director of the Bloomfield-Garfield Corp., said, "We're trying to make capitalism work in our neighborhoods.''

His group renovates and builds houses in Garfield. Working with local banks under the CRA, 35 first-time homeowners have gotten mortgages in the past six years. Most are African Americans. There have been no foreclosures. Homes often sell while under construction.

In neighborhoods such as Garfield, marred by ancient, vacant homes, "the market hasn't caught up with redevelopment costs.'' So the Urban Redevelopment Authority takes a portion of the cost as a second mortgage, which is paid off when the house is sold.

Homeowners build equity as the city rebuilds its tax base. No less a conservative than former Republican U.S. Sen. Rick Santorum could see the CRA's worth. In 1999, he voted against exempting smaller banks from the act.

"It's about providing opportunities for low-income neighborhoods,'' Mr. Santorum said then. "It's not racially based. It's not quota based. It's focused on where the problems are.''

Mary Joy Collins, 68, has been in one of these homes for 26 years. She worked in patient finance for West Penn Hospital before she retired, and she and her late husband, Ron, a Greyhound bus driver, bought the split-entry, three-bedroom home with an integral garage in 1982.

It was a good house for them, but her husband died three years ago and the stairs are too much for her now. She has Parkinson's. So she has been busy packing and joining neighbors in yard sales, and gets a little teary when she thinks of the "absolutely fantastic'' friends she'll leave in Garfield.

She's selling to the daughter and son-in-law of a neighbor across the street. So the house will be in the private market and Mrs. Collins will enjoy a modest return and the URA will get its equity back, too. She's moving to Shaler, to a two-bedroom place "with one step'' that her daughter and son-in-law picked out for her, so she can be near them.

That's not part of our financial mess. That's how America is supposed to work.