Congress is debating a financial regulation bill. Why is Congress ignoring the gorilla in the room? Why is Congress not seeking regulation reform for Fannie Mae and Freddie Mac? These quasi governmental institutions were the leading cause of our current recession.
The recession started with the housing crisis which was caused by sub prime mortgage loans. Fannie Mae and Freddie Mac, along with Congress, encouraged and enabled these loans. Starting with the Community Reinvestment Act of 1977 and extended by such bills as the Federal Housing Enterprises Financial Security + Soundness Act of 1992 banks were required to grant risky loans to people who could not afford them. By 2001 over fifty percent of home mortgages had to meet the requirements set in these acts. It was inevitable that the housing market would collapse.
Yet most in Congress do not think Fannie Mae or Freddie Mac need to be further regulated. Some in Congress say that these institutions will be regulated at a latter date. When Congress kicks the can down the road that means they will never do it.
When Fannie Mae and Freddie Mac granted outrageous bonuses to their executives, Congress ignored it. These institutions have been guaranteed endless bailouts. They are rife with incompetence and corruption. People have protested this for many years. Nothing was done.
Any financial regulation reform is meaningless, if Fannie Mae and Freddie Mac are not included in the bill.
Signed,
The Electorate
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