Senate Bill S.190
Barack Obama has been so busy trying to place blame for our current financial crisis and accusing Senator McCain of being out of touch. Well, refer to my previous post regarding the then-upcoming real estate/mortgage bust.
Apparently others were well aware of what could happen to Fannie Mae and Freddie Mac and actually tried to do something about it (as opposed to just indicating "present"). One of those was John McCain, a co-sponsor of the Senate Bill S.190, entitled the Federal Housing Enterprise Regulatory Reform Act of 2005. Please read the following statement McCain made on May 26, 2005:
"Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.
"The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
"The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
"For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.
"I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole
"I urge my colleagues to support swift action on this GSE reform legislation."
Here's a link from Bloomberg on this also.
What McCain predicted, even before the bubble burst, is now coming true. Evidently, his plea for Congress to act fell on deaf ears as usual.
It was the Clinton administration that first allowed mortgage companies to make bad loans to people who actually didn't qualify.
Some of you may say, "Well, McCain just co-sponsored the bill." So how many bills have you co-sponsored?
McCain was not the problem. He offered a solution but got shot down. But unlike Vietnam, we are all prisoners.
Apparently others were well aware of what could happen to Fannie Mae and Freddie Mac and actually tried to do something about it (as opposed to just indicating "present"). One of those was John McCain, a co-sponsor of the Senate Bill S.190, entitled the Federal Housing Enterprise Regulatory Reform Act of 2005. Please read the following statement McCain made on May 26, 2005:
"Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.
"The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
"The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
"For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.
"I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole
"I urge my colleagues to support swift action on this GSE reform legislation."
Here's a link from Bloomberg on this also.
What McCain predicted, even before the bubble burst, is now coming true. Evidently, his plea for Congress to act fell on deaf ears as usual.
It was the Clinton administration that first allowed mortgage companies to make bad loans to people who actually didn't qualify.
Some of you may say, "Well, McCain just co-sponsored the bill." So how many bills have you co-sponsored?
McCain was not the problem. He offered a solution but got shot down. But unlike Vietnam, we are all prisoners.
2 comments:
uh McCain didn't cosponsor the bill till may of 2006...
a year after it died in committee
...yeah, but at least he recognized there was a problem back then. Where was everybody else? No doubt too busy taking their kickbacks from Fannie Mae.
Post a Comment