What Deregulation?

Crabtown, are these some of the bills you wanted us to research?

Deregulation Bills I found:

• The Financial Services Modernization Act of 1999. (Nov 12, 1999) Passed by a Republican congress and signed by President Clinton this law removed the barriers between commercial banks, investment banks, stock trading companies, and insurance companies. These were separated by provisions of the Glass-Steagall Act of 1933. While this 1999 law did nothing to create the Mortgage crisis what it did do was allow it to grow from a limited mortgage crisis to an all out financial crisis affecting these other sectors.

• The Community Reinvestment Act (CRA, 1977) Passed by a Democratic congress and signed by President Carter. This law required all FDIC insured banks to be evaluated by the government to ensure they were meeting the needs of their “entire communities” and not only the wealthy. All that was an attempt to force banks to make more loans to low income and minority borrowers. This act gave minority organizations a venue to attack banks that refused minority borrowers even if they failed to meet the financial standards for repayment. This bill was given a bigger set of teeth by #3.

• The Financial Institutions Reform Recovery and Enforcement act of 1989 passed by a democratic congress and signed by President Bush (H. W.). This bill required the government to publically release CRA ratings that increased the pressure on banks to increase lending to minority markets, it also required Freddie and Fannie to support and insure these minority loans.

• The Federal Housing Enterprises Financial Safety and Soundness Act of 1992, passed by a democratic congress and signed by President Bush (H.W.) this law required Freddie and Fannie to secure more loans to low income and underserved communities (minority)

• In 1995 President Clinton and Treasury secretary Lloyd Benson revised the original CRA. From Wik:

The CRA regulations were substantially revised - using federal home-loan data broken down by neighborhood, income group, and race; encouraging community groups to complain to banks and regulators when banks did not meet their CRA obligations; allowing community groups that marketed loans to targeted groups to collect a fee from the banks just like other loan product marketers.[13] Information about banking institutions CRA ratings were made available via web page for public comment.[11]In May 1995, the Office of the Comptroller of the Currency also revised its regulations concerning CRA implementation. The new regulations allowed lenders subject to the CRA to claim community development loan credits for loans made to help finance the environmental cleanup or redevelopment of industrial sites when part of an effort to revitalize the low- and moderate-income community in which the site is located.[25]

There was so much wrong here it is hard to comprehend. It caused government regulators to micromanage lending practices and encouraged lending to high risk minority borrowers even offering bribes to community groups in the form of fees for marketing these sub prime loans.

 

It is simple... it started when LB Johnson signed the law that privatized Fannie Mae.
President Lyndon B. Johnson privatized Fannie Mae 40 years ago because he didn't want its debt on the government books, constraining his ability to finance the Vietnam War. But as Enron showed us, off-balance-sheet liabilities have a way of coming home to roost. http://www.baltimoresun.com/business/bal-bz.hancock22aug22,0,4197769.column?track=rss

Fannie was privatized by Lyndon B. Johnson in 1968 to remove it from the national budget. Freddie was created in 1970 to prevent monopolization of the secondary mortgage market by Fannie. Both GSEs are exempt from SEC oversight. http://www.kathylien.com/site/us-dollar/the-abcs-of-the-fannie-mae-and-freddie-macs-problems

Was Johnson a Republican or Democrat? Hmmmm?

 

This looks like a good place to start:
http://www.ontheissues.org/Celeb/Ronald_Reagan_Government_Reform.htm


Ronald Reagan on Government Reform
President of the U.S., 1981-1989; Republican Governor (CA)

New Federalism: shift programs to states & deregulate

Deregulation became a watchword of the Reagan administration, but critics charged that reduced regulation created hazards to public health and safety. During his first term, the president sought to shift dozens of federal programs to the state and local levels under his system of “new federalism.” Officials in these jurisdictions complained that promised federal aid to implement the programs was inadequate.
Source: Grolier Encyclopedia on-line, “The Presidency” Dec 25, 2000

Principal mission was government deregulation

Reagan’s principal mission in the presidency, he thought, was to rein in a government he considered an obstacle to economic opportunity and human liberty. His complaint that the federal government had “over-spent, over-estimated, and over-regulated” changed little over the years, but the audience for this message grew steadily larger during the 1970s. Regulatory reform had the status of consensus by the time Reagan took office.

OMB led the deregulatory charge, seeking to accomplish through executive action what another administration might have attempted through the legislative process. OMB [required] strict cost-benefit analyses of all federal regulations, [and was accused of] “ideological arithmetic” that ignored the cost in lives and illnesses.

Reagan might have been able to do more if his approach to deregulation had been less overtly pro-business. Instead, he aroused the hostility of liberals with appointments that critics likened to naming a fox to guard a chicken coop.

Source: The Role of a Lifetime, by Lou Cannon, p. 819-22 Jul 2, 1991