I was asked recently to provide legislation that was blocked by Democrats that could have prevented the financial crisis. Well, today I actually had a few moments of quiet time to do some looking and here is what I found that was blocked by Democrats:
In 2000, then-Rep. Richard Baker proposed a bill to reform Fannie and Freddie’s oversight. Rep. Barney Frank dismissed the idea, saying concerns about the two were “overblown” and that there was “no federal liability there whatsoever.”
S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005 Sen. Charles Hagel [R-NE]; Sen. Elizabeth Dole [R-NC]; Sen. John McCain [R-AZ]; Sen. John Sununu [R-NH]
What did it do?
Sec. 101. Establishment of the Federal Housing Enterprise Regulatory Agency.
Sec. 102. Duties and authorities of Director.
Sec. 103. Federal Housing Enterprise Board.
Sec. 104. Authority to require reports by regulated entities.
Sec. 105. Examiners and accountants; authority to contract for reviews of enterprises.
Sec. 106. Assessments.
Sec. 107. Regulations and orders.
Sec. 108. Prudential management and operations standards.
Sec. 109. Limitation on nonmission-related assets.
Sec. 110. Risk-based capital test for enterprises.
Sec. 111. Limit on golden parachutes.
Sec. 112. Reporting of fraudulent loans.
Last year, Chris Dodd opposed Bush Admin ideas for reform calling them ill-advised
How did Fannie and Freddie counter such efforts? They flooded Washington with lobbying dollars, doled out tens of thousands in political contributions and put offices in key congressional districts. Not surprisingly, these efforts worked. Leaders in Congress did not just balk at proposals to rein in Fannie and Freddie. They mocked the proposals as unserious and unnecessary.
Rep. Barney Frank (D-Mass.) said the following on Sept. 11, 2003: “We see entities that are fundamentally sound financially. . . . And even if there were a problem, the federal government doesn’t bail them out.”
Sen. Thomas Carper (D-Del.), later that year: “If it ain’t broke, don’t fix it.”
As recently as last summer, when housing prices had clearly peaked and the mortgage market had started to seize up, Dodd called on Bush to “immediately reconsider his ill-advised” reform proposals. Frank, now chairman of the House Financial Services Committee, said that the president’s suggestion for a strong, independent regulator of Fannie and Freddie was “inane.”
So, while there is plenty of blame to go around…I will not sit here and tolerate those who should be shouldering MOST OF IT blaming Bush and Republicans while they got paid fat cash by lobbyists for stopping reform efforts.
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