Obama's Financial Allies
Obama Ally Rep. Barney Frank (D-MA) Blocked Multiple Attempts At Reforming Fannie Mae And Freddie Mac Spanning Back To 1992: "[Frank's] Record Is Close To Perfect As A Stalwart Opponent Of Reforming The Two Companies, Going Back More Than A Decade. The First Concerted Push To Rein In Fan And Fred In Congress Came As Far Back As 1992, and Mr. Frank Was Right There, Standing Athwart. But Things Really Picked Up This Decade, And Barney Was There At Every Turn." (Editorial, "Fannie Mae's Patron Saint," The Wall Street Journal, 9/10/08)
"In 2000, Then-Rep. Richard Baker Proposed A Bill To Reform Fannie And Freddie's Oversight. Mr. Frank Dismissed The Idea, Saying Concerns About The Two Were 'Overblown' And That There Was 'No Federal Liability There Whatsoever.'" (Editorial, "Fannie Mae's Patron Saint," The Wall Street Journal, 9/10/08)
"Two Years Later, Mr. Frank Was At It Again. 'I Do Not Regard Fannie Mae And Freddie Mac As Problems,' He Said In Response To Another Reform Push. And Then: 'I Regard Them As Great Assets.'" (Editorial, "Fannie Mae's Patron Saint," The Wall Street Journal, 9/10/08)
"Again In June 2003, The Favorite Of The Beltway Press Corps Assured The Public That 'There Is No Federal Guarantee' Of Fan And Fred Obligations." (Editorial, "Fannie Mae's Patron Saint," The Wall Street Journal, 9/10/08)
"A Month Later, Freddie Mac's Multibillion-Dollar Accounting Scandal Broke Into The Open. But Mr. Frank Was Sanguine. 'I Do Not Think We Are Facing Any Kind Of A Crisis,' He Said At The Time." (Editorial, "Fannie Mae's Patron Saint," The Wall Street Journal, 9/10/08)
"Three Months Later He Repeated The Claim That Fannie And Freddie Posed No 'Threat To The Treasury.' Even Suggesting That Heresy, He Added, Could Become 'A Self-Fulfilling Prophecy.'" (Editorial, "Fannie Mae's Patron Saint," The Wall Street Journal, 9/10/08)
"In April 2004, Fannie Announced A Multibillion-Dollar Financial 'Misstatement' Of Its Own. Mr. Frank Was Back For The Defense. Fannie And Freddie Posed No Risk To Taxpayers, He Said, Adding That 'I Think Wall Street Will Get Over It' If The Two Collapsed." (Editorial, "Fannie Mae's Patron Saint," The Wall Street Journal, 9/10/08)
Obama Ally Sen. Chris Dodd (D-CT) Led Efforts To Block Reform Of Fannie Mae And Freddie Mac, After Receiving A Sweetheart Deal On Loans For His Own Houses:
Obama Joined Sen. Dodd - Both Top Recipients Of Fannie And Freddie Contributions - In Opposing Reform Measures And Weakening Existing Regulations. "During this period, Sen. Richard Shelby led a small group of legislators favoring reform, including fellow Republican Sens. John Sununu, Chuck Hagel and Elizabeth Dole. Meanwhile, Dodd -- who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 -- actively opposed such measures and further weakened existing regulation." (Al Hubbard and Noam Neusner, Op-Ed, "Where Was Sen. Dodd?" The Washington Post, 9/12/08)
Sen. Dodd Called The President's Suggestions For Regulations "Inane" And Recommended The President "Immediately Reconsider His Ill-Advised" Proposals. "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.'" (Al Hubbard and Noam Neusner, Op-Ed, "Where Was Sen. Dodd?" The Washington Post, 9/12/08)
Dodd Called On The Regulator For Fannie Mae And Freddie Mac To Lift Portfolio Caps. "Both Schumer and Christopher J. Dodd, D-Conn., the chairman of the Senate Banking, Housing and Urban Affairs Committee, have called on Fannie Mae and Freddie Mac's regulator to lift the portfolio caps. They argue that allowing the two firms to buy more mortgages, at least temporarily, would inject much needed liquidity into the market and calm the financial markets." (Michael R. Crittenden, "Schumer Will Seek To Lift Cap On Mortgage Portfolios Of Fannie Mae, Freddie Mac," Congressional Quarterly Today, 8/16/07)
NOTE: Since 1989, Dodd Has Received At Least $165,400 From Fannie Mae And Freddie Mac: $48,500 From PACs And $116,900 From Individuals, Receiving More Than Any Other Politician. (Lindsay Renick Mayer, "Fannie Mae And Freddie Mac Invest In Lawmakers," Center For Responsive Politics' "Capital Eye" Blog, www.opensecrets.org, 9/11/08)
In 2003, Dodd, Chairman Of The Senate Banking Committee, Received Preferential Loans From Countrywide Financial On His Two Homes Which Saved Him $75,000. "Senators Christopher Dodd, Democrat from Connecticut and chairman of the Banking Committee, and Kent Conrad, Democrat from North Dakota, chairman of the Budget Committee and a member of the Finance Committee, refinanced properties through Countrywide's 'V.I.P.' program in 2003 and 2004, according to company documents and emails and a former employee familiar with the loans. ... Senator Dodd received two loans in 2003 through Countrywide's V.I.P. program. He borrowed $506,000 to refinance his Washington townhouse, and $275,042 to refinance a home in East Haddam, Connecticut. Countrywide wai ved three-eighths of a point, or about $2,000, on the first loan, and one-fourth of a point, about $700, on the second, according to internal documents. Both loans were for 30 years, with the first five years at a fixed rate. The interest rate on the loans, originally pegged at 4.875%, was reduced to 4.25% on the Washington home and 4.5% on the Connecticut property by the time the loans were funded. The lower rates save the senator about $58,000 on his Washington residence over the life of the loan, and $17,000 on the Connecticut home." (Daniel Golden, "Countrywide's Many 'Friends,'" Portfolio, 6/12/08)
Obama Ally Sen. Chuck Schumer (D-NY) Has Been A "Leading Voice For [Financial] Deregulation," Led Efforts To Block Reform Of Fannie Mae And Freddie Mac, And Was Instrumental In The Collapse Of Bank IndyMac:
Until The Current Financial Crisis, Sen. Chuck Schumer (D-NY) "Had Been A Leading Voice For Deregulation," Supporting Repeal Of Great-Depression Era Regulations, Re-Examining Corporate Oversight Laws, And Opposing Reducing Taxpayer Risks Associated With Fannie Mae And Freddie Mac. "Until the current credit crisis, Mr. Schumer had been a leading voice for deregulation: He ha s championed the repeal of a Great Depression-era law that prohibited commercial banks from underwriting securities; he has written an opinion piece calling for the Sarbanes-Oxley Act to be 're-examined,' and he has opposed a bill that sought to reduce taxpayer risk in the event of a housing market slowdown by requiring Freddie Mac and Fannie Mae to sell their entire investment portfolios of about $1.5 trillion worth of mortgage assets." (Joseph Goldstein, "Pro-Deregulation Schumer Scores Bush For Lack of Regulation," The New York Sun, 9/22/08)
Schumer Called On The Regulator For Fannie Mae And Freddie Mac To Lift Portfolio Caps. "Both Schumer and Christopher J. Dodd, D-Conn., the chairman of the Senate Banking, Housing and Urban Affairs Committee, have called on Fannie Mae and Freddie Mac's regulator to lift the portfolio caps. They argue that allowing the two firms to buy more mortgages, at least temporarily, would inject much needed liquidity into the market and calm the financial markets." (Michael R. Crittenden, "Schumer Will Seek To Lift Cap On Mortgage Portfolios Of Fannie Mae, Freddie Mac," Congressional Quarterly Today, 8/16/07)
Rep. Frank And Sens. Schumer And Dodd Protected Fannie Mae And Freddie Mac. "The powerhouse Democratic overseers of the banking committees -- Rep. Barney Frank, Sen. Christopher Dodd and Sen. Chuck Schumer -- protected Fannie and Freddie." (Robert Novak, Op-Ed, "Crony Image Dogs Paulson's Rescue Effort," Chicago Sun-Times, 7/17/08)
After The Subprime Housing Crisis Began, Schumer Advocated Raising The Cap On What Fannie Mae And Freddie Mac Could Lend. "Even last September, as the subprime housing crisis began to metastasize and the market was expressing concerns about the pair, Sen. Charles Schumer (D-N.Y.), the powerful chair of the Senate banking subcommittee on housing, had the very bad (and ultimately rejected) idea of raising the cap on what Fannie and Freddie could lend by 10 percent. Since then the companies have reported losses of $11 billion, and there's uncertainty about just how much more damage there will be from future defaults." (Editorial, "We Can't Say No, But We Can Regulate Them," [New York] Newsday, 7/20/08)
Despite Reports Of Fraudulent Accounting, Schumer Opposed Creating A Strong Regulator For Fannie Mae And Freddie Mac In 2004. "Even after Freddie Mac was shown to have manipulated earnings, Congress remained deadlocked over legislation to create a stronger regulator. Opposing one such bill in 2004, Sen. Charles E. Schumer (D-N.Y.) argued that a hostile regulator could use the proposed powers to choke the companies." (David S. Hilzenrath, "Fannie, Freddie Deflected Risk Warnings," The Washington Post, 7/14/08)
Schumer Released Letters He Sent To Federal Regulators Questioning The Financial Health Of IndyMac Which Led To A $1.3 Billion Run On The Bank. "Former IndyMac Bank workers who blame Sen. Charles E. Schumer for the collapse of the large Pasadena thrift have found an ally in their quest to hold the New York Democrat to account: a public relations firm with a Republican-heavy client list. Schumer, chairman of Congress' Joint Economic Committee and a strident critic of the Bush administration, on June 26 released letters he had sent to federal bank regulators, saying IndyMac's shaky state 'poses significant risks to both taxpayers and borrowers.' He questioned whether the regulators were 'prepared to take measures that would help prevent the collapse of IndyMac or minimize the damage should such a failure occur.' A run on the bank ensued, with depositors taking out a net $1.3 billion in the following two weeks." (E. Scott Reckard, "Former IndyMac Employees Seek Probe Of Sen. Charles Schumer," Los Angeles Times, 8/16/08)
Democrats Were Warned & Consistently Blocked Reform--Way back in 2001 The Bush Administration raised red flags. In 2008, Bush warned the Democratic majority 17 times that there was a looming crisis and that mortgage giants Fannie Mae and Freddie Mac needed reform.
In 2003, former Treasury Secretary John Snow testified before the House Financial Services Committee and said this: SNOW: We need a strong world-class regulatory agency to oversee the prudential operations of the GSEs and the safety and the soundness of their financial activities. In 2005- Senator John McCain partnered with three other Senate Republicans to reform the government’s involvement in lending.
Sadly, in every instance since 2001, Democrats either ignored or blocked any attempts at reform.