From April 16, 2009:
To Congress,
This recession started with the housing crisis. Banks were faltering under the burden of a massive number of loans that could not be repaid. These "toxic assets" threatened our entire financial system. Why would banks approve loans, which they had to know, could not be repaid? They did this because they were required to approve these loans by the federal government.
Starting with the Community Reinvestment Act of 1977 , and extended by such bills as the Federal Housing Enterprises Financial Security and Soundness Act of 1992, banks were required by law to grant these unsound loans. By 2001, over 50% of home mortgages had to meet the requirements set in these acts. How did anyone expect banks to survive, much less prosper, under these conditions? My question is why aren't these acts being repealed? If we want our financial institutions to be sound, why are we forcing them to operate using unsound business practices?
Signed,
The Electorate
Showing posts with label bankruptcy. Show all posts
Showing posts with label bankruptcy. Show all posts
Monday, June 15, 2009
Auto Maker Bankruptcies
From a letter sent June 11, 2009.
To Congress,
These bankruptcies are wrong and unfair in so many ways. Their legalities are questionable. These companies were not allowed to go through normal bankruptcy. Our bankruptcy laws were not followed. These were "structured" bankruptcies. Who made up that term? The sole purpose seemed to be to protect the unions and too bad for everyone else. Those who should have been reimbursed first were put at the end of the line. Unions are bragging that they kept their base pay, benefits, and pensions and now own part of the company too.
If we are a nation of laws, why didn't we follow them? Dealers were hung out to dry. Using some unknown criteria profitable dealers were terminated - even though dealerships do not cost the auto companies anything. Whom you knew or whom you supported seemed to effect whether or not you were terminated. This is cronyism. It's not just politics as usual, it's Chicago politics as usual. These dealers have an inventory of millions sitting on their lots. Within a certain time frame they may sell them for whatever they can get. After that date if they sell them the warranty will not be honored. If Chrysler or GM made these new cars, they should honor the warranty even from a dealer that they do not now authorize.
Many of these dealers will be forced into bankruptcy, but they won't get special deals. They will have to abide by regular bankruptcy laws. Due to government intervention auto dealerships are going to fail and jobs will be lost. That should help the economy! But at least the unions are safe!
Signed,
The Electorate
To Congress,
These bankruptcies are wrong and unfair in so many ways. Their legalities are questionable. These companies were not allowed to go through normal bankruptcy. Our bankruptcy laws were not followed. These were "structured" bankruptcies. Who made up that term? The sole purpose seemed to be to protect the unions and too bad for everyone else. Those who should have been reimbursed first were put at the end of the line. Unions are bragging that they kept their base pay, benefits, and pensions and now own part of the company too.
If we are a nation of laws, why didn't we follow them? Dealers were hung out to dry. Using some unknown criteria profitable dealers were terminated - even though dealerships do not cost the auto companies anything. Whom you knew or whom you supported seemed to effect whether or not you were terminated. This is cronyism. It's not just politics as usual, it's Chicago politics as usual. These dealers have an inventory of millions sitting on their lots. Within a certain time frame they may sell them for whatever they can get. After that date if they sell them the warranty will not be honored. If Chrysler or GM made these new cars, they should honor the warranty even from a dealer that they do not now authorize.
Many of these dealers will be forced into bankruptcy, but they won't get special deals. They will have to abide by regular bankruptcy laws. Due to government intervention auto dealerships are going to fail and jobs will be lost. That should help the economy! But at least the unions are safe!
Signed,
The Electorate
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