The Bush-Republican Distrous Policy of Financial Deregulation

FACT CHECK: BUSH ADMINISTRATIONS TRACK RECORD OF DEREGULATION
Sep 25, 2008 (Congressional Documents and Publications/ContentWorks via COMTEX) --
SENATE DEMOCRATIC COMMUNICATIONS CENTER
FACT CHECK: BUSH ADMINISTRATION'S TRACK RECORD OF DEREGULATION

http://www.zibb.com/article/4043921/FACT+CHECK+BUSH+ADMINISTRATIONS+TRACK+RECORD+OF+DEREGULATION

The Bush administration's relentless pursuit of deregulation has led the nation to the brink of financial collapse. And now, after months of telling the American people that the economy is sound, Bush-McCain Republicans are insisting the American people bailout their failed policies. Throughout his two terms, President Bush and his administration have refused to exercise their regulatory authority over the mortgage industry, put Republican ideologues in charge of vital agencies, ignored the housing bubble that led to irresponsible lending practices and refused to monitor the activities surrounding complex financial instruments that ultimately led to the credit crisis.

GOP RECORD OF DEREGULATION DEMOCRATIC RECORD OF OVERSIGHT

December 28, 2002: A study by Federal Reserve economists reported homeowners taking advantage of falling interest rates and rising home values to extract $131.6 billion via mortgage refinancings in 2001 and early 2002, while consumers spent some of the money, they saved or invested more of it, according to a study published in the Federal Reserve Bulletin. Homeowners spent an estimated $20.7 billion of the cash for personal items such as cars, vacations or medical services, the study said. [Chicago Tribune, 12/28/02]

May 2002: Senator Sarbanes introduces the Predatory Lending Consumer Protection Act of 2002. [S. 2438]

November 2003: Senator Sarbanes, introduces the Predatory Lending Consumer Protection Act of 2003. [S. 1928]

February 23, 2004: Instead of heeding warnings, Federal Reserve leadership promotes non-traditional mortgages over fixed rate products in a speech to the Credit Union National Association annual conference. "American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage.the traditional fixed-rate mortgage may be an expensive method of financing a home." [Remarks By Federal Reserve Chairman Alan Greenspan, 2/23/04]

October 8, 2003: Bush administration objected to a proposal to have an independent regulator of Fannie Mae and Freddie Mac be an independent unit of Treasury, much like financial regulators housed in the agency that oversee banks and thrifts. The Bush administration also objected to a proposal to have the Department of Housing and Urban Development have oversight over the companies' business activities. The independence provision has broad support from committee Democrats and Republicans. The HUD provision was pushed mostly by Democrats but had been accepted by Oxley and Baker as a compromise needed to move the bill forward. [Washington Post, 10/8/03]

February 24, 2004: At a Senate Banking Committee hearing, Norman Rice, President and CEO of the Federal Home Loan Bank of Seattle questioned having low-income Americans use ARM's to finance their homes. In addition, Senator Sarbanes questioned the Federal Reserve's promotion of alternative mortgage products over traditional fixed rate mortgages:

* Norman Rice: "Particularly if you're talking about serving an underserved constituency. Adjustable rate mortgages for a low income constituency is a nightmare."

* Senator Sarbanes: "[The Federal Reserve] is pushing adjustable rate mortgages, and throwing this risk back on the consumer." [Senate Banking Committee Transcript, 2/25/04]

June 30, 2004: After encouraging the use of non-traditional mortgages, many of which re-set with rising interest rates, the Federal Reserve begins to raise rates-17 consecutive, 25 basis point increases that take the Federal Reserve Funds rate from a 46-year low of 1 percent in June 2004 to 5.25 percent in June 2006. [Market News International, 4/29/08]

October 26, 2005: House of Representatives passed regulation reforming the GSE's. The bill passed the House 331-90 (Republicans: 209-15; Democrats: 122-74), and would have given the new regulator broad authority over setting capital requirements and limiting portfolio size. Senate Democrats picked that bill up and offered it, but the Administration opposed that legislation. According to Mr. Oxley, the White House gave Congress and the GSE reform legislation "a one-finger salute."

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