WASHINGTON — A 1977 federal law that expands affordable housing isn't to blame for the current financial crisis, despite recent attacks on it from a few economists and conservatives, U.S. Sen. Daniel K. Akaka said yesterday at a Senate hearing.

Akaka, D-Hawai'i, said that the law, the Community Reinvestment Act, has helped individuals in low-income communities get traditional mortgages and other financial services.

"Instead of finding excuses to stop federal efforts to expand access to mainstream financial service, we must do more," said Akaka, a member of the Senate Banking Committee, which is investigating the financial crisis. "Repealing or weakening the (law) would be a mistake."

The law's critics say it forces banks to lend to local low-income people who are bad credit risks, and legislation has been introduced in Congress to repeal it.

But critics don't take into account that the law does not apply to investment banks, which bought, bundled and sold subprime mortgages, Akaka said. It also does not apply to credit rating agencies and the sale of derivatives or credit default swaps, he said.

"These products have contributed significantly to the financial situation we are now in," Akaka said. "The causes of this crisis are complex and cannot simply be blamed on the Community Reinvestment Act."

Akaka said low- and moderate-income families are better off using mainstream financial institutions rather than other, unregulated or fringe providers.

Most subprime mortgage lending was done by independent mortgage companies that are not subject to the law's requirements and lacked consumer protections, Akaka said.

"Instead of just reacting to (the) crisis, regulators must quickly adapt to financial services' innovations," Akaka said.