The Wall Street Journal has a long article, Vermont Mortgage Laws Shut the Door on Bust — and Boom, on how Vermont's old-fashioned skinflint mortgage regulations prevented excessive lending in that state. State regulations played a sizable role in the Bubble — for example, Ohio has a lot more foreclosures than Pennsylvania due to differences in regulations. (Although without the expectation of continued massive Hispanic immigration, as in California, Florida, Nevada, and Arizona, home prices couldn't reach levels where losses mattered much in the big picture.)

In general, state laws on lending, which typically were devised back when "usury" was considered a bad thing, were more Mr. Potterish than federal laws and regulations, which, being more recent, were more George Baileyesque.

Vermont is, of course, the whitest state in the union, which means that the bipartisan federal push for more minority lending through lower credit standards had little traction in Vermont. The federal government couldn't persecute anybody for discriminating against minorities in Vermont since there were no minorities.