Bloomberg has the story.
Let's set the stage. In 1999, the intellectual father of the crash, Sen. Gramm, buffaloed Congress into dismantling the safety device set up by the New Deal to divide banks into safe and prudent places to sequester money and risky places to gamble with one's own or (usually) other people's money. From then on, all banks were hot money banks. If they didn't take big risks, they couldn't attract money and would wither away.
Meantime in Chicago, the Pritzkers had feasted on the juicy corpse of another Reaganite experiment in look-the-other-way regulation by buying a busted S&L. Over the next years, they sucked the life out of that bank (to the tune of $200 mil) and by about 2000 it was broke.
They could either put in more capital or:
In a May 2001 letter to the bank’s management and employees -- just two months before its closure -- Pritzker detailed a plan to revive the institution with an expansion into subprime lending. She wrote that her family was devising a $351 million recapitalization plan for the bank.
“Your resolve and dedication is a primary reason for the past successes of the bank and will once again restore Superior’s leadership position in subprime lending,” she wrote. “Our commitment to subprime lending has never been stronger and we are fully expecting to participate in restoring the bank’s presence through strong product lines and continued growth.”
Note this move into liar loans was purely voluntary on the bankers' part. They were not fulfilling any requirements under the CRA.
Later, surveying the wreckage, regulators concluded:
Subprime loans typically are given to people with the weakest credit, charging higher interest to cover the bigger risk of default, and Superior’s collapse turned out to be a preview of the financial crisis that came later in the decade.
With $1.9 billion in assets as of March 2001, Superior became undercapitalized because it overstated its holdings and used shoddy accounting, the Office of Thrift Supervision said in a July 2001 statement.
Superior “also suffered from poor lending practices, improper record-keeping and accounting, and ineffective board and management supervision,” the OTS said.
None of that was required by the CRA. But it sounds a lot like the S&L adventure under Reagan.