The Mudcat Café TM
Thread #114650 Message #2469164
Posted By: CarolC
18-Oct-08 - 11:15 AM
Thread Name: BS: The Bailout
Subject: RE: BS: The Bailout
CRA May Deter Risky Mortgage Lending
On January 7, 2008, Traiger and Hinkley, LLP, a law firm that specializes in fair lending counsel and Community Reinvestment Act (CRA) compliance, released a report titled The Community Reinvestment Act: A Welcome Anomaly in the Foreclosure Crisis. The study concludes that CRA regulations have meant that banks that must comply with th eregulations and originate loans in their local communities, or more formally their CRA assessment areas, are substantially less likely than other lenders to make the types of loans that have contributed to the foreclosure crisis.
http://blog.seattlepi.nwsource.com/northwestlaw/archives/149530.asp?from=blog_last3
'S. 190; McCain "Supported" it After it was Dead
People vehemently say that McCain was a champion of regulation despite his voting record and point to S. 109, a bill introduced in 2005. The bill was introduced by Charles Hagel on the Senate floor and several months later, after it had gone to the Senate Committee on Banking, Housing Urban Affairs, McCain announced a in brief speech in the Senate that he was a co-sponsor of the bill.
People argue that it was over the valiant efforts of Republicans, particularly McCain, that the bill was defeated by the Democrats. The first thing that struck me as odd about this is that McCain stood up for the bill only after it had been in committee for several months and no action had been taken. He then said absolutely nothing about the bill.
Could the Democrats have blocked the bill in committee? This seems like an odd thing to say of the minority party. The Committee on Banking, Housing and Urban Affairs was chaired by a Republican and Republicans held a clear majority of the seats on the committee.
I found the committee's rules of procedure for the year 2005 and the Republican chairman alone, without any vote could have launched an investigation into the financial trouble of the day that the bill was supposed to address. There was no investigation.
According to the rules the Democrats were powerless to block anything coming out of the committee to be voted on by the Senate but there was no such vote. All it took for the bill to get out of committee was a majority, which was held by Republicans. The bill was amended somehow and reported out of the committee but was never voted on.'
http://mpandgs.blogspot.com/2008/09/on-john-mccains-warning-about-fannie.html
John McCain's 2005 "Warning" About Fannie, Freddie & Dems "Blocking" Regulation
A bit late passing this along, but John McCain's claim that he issued a warning against the excesses of Fannie Mae and Freddie Mac during the 2005-06 legislative year was given a "barely true" by Politifact. On 25 May, 2006, Senator McCain signed on as a co-sponsor to Chuck Hagel's effort to overhaul Fannie Mae and Freddie Mac (which Senator Hagel intoduced in January, 2005) following the publication of "a 340-page report from the Office of Federal Housing Enterprise Oversight."* However, as Politifact points out, his attempts to depict those efforts as some sort of early warning that could have lessened the current credit crisis just don't wash. All McCain was talking about then was the potential fallout of accounting troubles in Fannie Mae and Freddie Mac. He didn't say anything about a freewheeling climate among creditors that had major financial institutions becoming badly leveraged on bad loans.
Additionally, those rumors that Democrats alone blocked GOP proposal, S.190, to regulate Fannie Mae and Freddie Mac? Questionable claims, for the bill never got out of committee:
Last Action [July 28, 2005]: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.
Status: Dead
So the bill was never brought to a full Senate vote. Recall that the Republicans were the majority in 2005-06, and the Committee on Banking, Housing, and Urban Affairs consisted of 11 Republicans and 9 Democrats (for a full listing of the members of the 2005-06 Committee on Banking, Housing, and Urban Affairs, see this entry at Sourcewatch). In other words, the proposal could have been voted out of committee and brought to the Senate floor had the GOP members had supported it.
* Notably, Senator Hagel reintroduced S.190 in 2007 as S.1110: Senator McCain has not publicly supported the "Federal Housing Enterprise Regulatory Reform Act of 2007," which remains pending.'
http://www.salon.com/tech/htww/2008/10/07/a_fannie_freddie_debate_primer/print.html
'In 2005, bills designed to increase regulation on Fannie and Freddie were introduced in both the House and the Senate -- both controlled at the time by Republican majorities. The House actually managed to pass its version of the bill with a large 330-90 majority. The Senate? Its bill, although similar to the House's version, died in committee.
The New York Times reported on Oct. 6 that Democrats vigorously opposed the Senate bill, calling it "fundamentally flawed," but I haven't found, so far, any specific Obama reference to Fannie and Freddie at the time. Still, let the record show that the Republican Party, which controlled the White House, the Senate and the House of Representatives in 2005, was unable to pass legislation reforming how Fannie and Freddie were regulated.
Mike Oxley, the House Republican who chaired the House Financial Services Committee in 2005, blamed the White House for sabotaging his bill.
The Financial Times:
The House bill, the 2005 Federal Housing Finance Reform Act, would have created a stronger regulator with new powers to increase capital at Fannie and Freddie, to limit their portfolios and to deal with the possibility of receivership.
Mr Oxley reached out to Barney Frank, then the ranking Democrat on the committee and now its chairman, to secure support on the other side of the aisle. But after winning bipartisan support in the House, where the bill passed by 331 to 90 votes, the legislation lacked a champion in the Senate and faced hostility from the Bush administration.
Adamant that the only solution to the problems posed by Fannie and Freddie was their privatization, the White House attacked the bill. Mr Greenspan also weighed in, saying that the House legislation was worse than no bill at all.'