Posted on 09/26/2008 11:30:10 AM PDT by vietvet67
It was October 1992, nearly 15 years before the housing meltdown and subprime crisis. Republican Rep. Jim Leach of Iowa was on the floor of the House, talking about something that no one at the time seemed to care about: the potential danger that Fannie Mae and Freddie Mac posed to the economy.
In remarks later reported by the Washington Post, Leach warned that Fannie and Freddie were changing "from being agencies of the public at large to money machines for the stockholding few."
Leach's prescient comments went unheeded — indeed, Congress spent the next decade and a half avoiding the alarms going off around Fannie and Freddie. Until, that is, it was too late.
Led by top Democrats, including Rep. Barney Frank in the House and Sen. Chris Dodd in the Senate, Congress not only did nothing about the growing risks at Fannie and Freddie, it in essence doubled down on their risks.
The Democrat-led Congress of the early 1990s eased capital limits on the two mortgage lending giants, letting them use enormous leverage — 2.5% of assets at Fannie and Freddie, vs. 10% for banks — to expand lending to low-income, minority communities.
Regulator Reined In
Congress, with the passage of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, also created a regulator for Fannie and Freddie — but made sure that, from the very beginning, it would essentially be neutered.
That regulator, the Office of Federal Housing Enterprise Oversight, an arm of the Department of Housing and Urban Development, was unique among financial regulators in that it had to go back each year to Congress for its budget.
(Excerpt) Read more at ibdeditorials.com ...
Not In My Name!
But that’s what the Democrats did, co-signed bad loans!
I’ve been espousing same for two weeks.
Unfortunately, every time I make the argument my co-workers call me racist.
Do you ask them how it is racist and if they even know what the word racist means?
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