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Wall Street Crisis: Calls for Regulation Not from the Usual Suspects?

Posted on September 30, 2008
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The Community Reinvestment Act isn’t the sole source of the current financial crisis. It took the government-sponsored entities Fannie Mae and Freddie Mac to multiply the hazards created by the CRA. In 2004 Fannie Mae’s federal regulator issued a critical preliminary report on Fannie Mae’s accounting policies, financial controls and financial reporting process. I believe it was this report (covered in this Washington Post story) that is in part the subject of the instructive House committee hearing highlights video featuring Democratic Reps. Gregory Meeks (he’s “p***** off” by criticism of Fannie Mae and Franklin Raines), Maxine Waters (“we do not have a crisis at Fannie Mae”), Lacy Clay (“I get the feeling that the markets are not worried about the safety and soundness of Fannie Mae and Freddie Mac”) and Barney Frank (“It serves us badly to raise safety and soundness as a kind of general shibboleth when it doesn’t seem to be an issue”). Words speak for themselves. Our legislators have clearly spoken on how this crisis was allowed to ferment despite many warnings.

This video montage of a particular committee hearing and a former president in their own words is very instructive:

For Additional Resources:
“Fannie Mae’s Patron Saint”
“Where was Senator Dodd?”
“Pro-Deregulation Schumer Scores Bush for Lack of Regulation”
“Fannie, Freddie Deflected Risk Warnings”

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