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Barney Frank and Chuck Schumer’s Role in the Fannie Mae Failure

September 17, 2008

 Below is an editorial that appeared in the New Hampshire Union Leader that talks about Barney Frank and Chuck Schumer and their roles in the failure of Fannie Mae and Freddie Mac.

 Here is the editorial in it’s entirely:

One month from tomorrow, U.S. Rep. Barney Frank, D-Mass., will be the keynote speaker at the New Hampshire Democratic Party’s annual Jefferson-Jackson dinner. It is a coveted and high-profile role previously filled by such notables as Hillary Clinton and Al Gore. The Democrats’ choice of House Financial Services Committee Chairman Barney Frank is, therefore, very revealing.

The party announced Frank as the keynote speaker on Sept. 11 — three days after the U.S. government took control of Fannie Mae and Freddie Mac, costing taxpayers untold billions. That takeover probably could have been prevented had Frank not worked to thwart every attempt to limit the risks taken on by the two government-sponsored mortgage giants.

For 16 years reformers in Congress have tried to improve oversight of Fannie Mae and Freddie Mac and prevent the government-chartered companies from putting the housing market and the whole economy at risk. All that time, Frank was involved in efforts to block those attempts, and in the last eight years he was a leader of those efforts.

In 2002, shortly before accounting irregularities were exposed at both companies, Frank said, “I do not regard Fannie Mae and Freddie Mac as problems,” The Wall Street Journal reported. After the Freddie Mac accounting scandal in 2003, Frank said, “I do not think we are facing any kind of a crisis.”

But there was a crisis, thanks in large part to Frank, Sen. Charles Schumer and others on the leash of these companies. In Congress, they made sure there was no additional oversight, no additional limit on executive behavior and compensation, and no further restraint on the growth of the companies’ mortgage-backed-securities portfolios, among other changes.

(All of these needed reforms, by the way, have been championed for years by Sen. John Sununu.)

In fact, Frank & Co. made matters worse by pushing Fannie Mae and Freddie Mac to take on greater risk. They wanted more loans to people who might not qualify for traditional bank financing. And, as The Wall Street Journal has pointed out, Frank “pressured regulators to ease up on their capital requirements — which now means taxpayers will have to make up that capital shortfall.”

Even now, after the government took the companies over (which Frank repeatedly said over the years was not a possibility), Frank opposes limits on the amount of money they can risk on mortgage backed securities — the one reform that might have done the most to prevent the current meltdown and probably would do the most to keep it from happening again.

Barney Frank is the very symbol of Washington’s deliberate refusal to prevent the collapse — the predicted collapse — of Fannie Mae and Freddie Mac. And this is the guy the New Hampshire Democratic Party showcases at its most prestigious annual event. That ought to tell you a lot right there.

 Besides their total ignorance about the troubles that Fannie Mae and Freddie Mac were headed towards is the fact that these two men, and other Democrats, helped to make the problem worse.

In fact, Frank & Co. made matters worse by pushing Fannie Mae and Freddie Mac to take on greater risk. They wanted more loans to people who might not qualify for traditional bank financing. And, as The Wall Street Journal has pointed out, Frank “pressured regulators to ease up on their capital requirements

 These companies were forced to loan money to people who couldn’t afford it in the interest of “being fair.” Rules were relaxed and money was loaned and predictably low income families defaulted on loans that they never had any business getting in the first place and now you and I have to pay for it.

 Another liberal policy and another liberal failure. And now we must all pay for it. But hell, they meant well.

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55 Comments leave one →
  1. Deb permalink
    September 19, 2008 8:10 am

    All this “meaning well” by the democrats is going to cost this republican $$$$$ and I really don’t like it, not one bit.

  2. September 20, 2008 12:33 am

    just so you know, the govt “relaxed” its capital requirements to enable Bank of America to buy Merrill.

    Hope you don’t bank with BoA!

    And slightly off-topic but just so people know, just because your bank deposit account is FDIC doesn’t mean you’re getting your money. Go to the FDIC website and read the terms. They have about 20 years to pay you in small installments. They can defer when they begin.

    A bank mgr recommended to someone I know to not have over $10K in any one bank.

    Also, after bailing Freddie & Fannie the FDIC became a little drained.

    There is not money to cover deposits if just 4% of Americans want to pull their money.

    If you go to the federal reserve website, you’ll see a report every thursday morning posted on how much capital banks have. There are records going back over 10 years. Take a good look. Our banks have no money. The Fed has fancy mechanisms to get around saying this but this is the bottom line people.

    http://www.federalreserve.gov/releases/h3/Current/

  3. September 20, 2008 5:31 am

    I have wondered in the past how banks could possible insure everybody’s money in the time of a disaterous event that would cause everyone to withdraw their money. It seems impossible. Thanks for the info.

  4. maryh permalink
    September 27, 2008 8:38 pm

    I just found your blog. I knew there had to be other people in this great country who believe and feel the way my husband and I do.
    These people – like Schumer, Frank, etal – should be removed from office. There is a vehicle for doing this – elections. Unfortunately this is not likely to happen. There are too many political machines that keep putting the crooks back in office.
    Keep up the good work. I’ll enjoy reading your posts.

  5. September 28, 2008 6:28 am

    Thanks for the kind words. There are a few of us out here but we seem to be dwindling.

  6. Pete permalink
    September 30, 2008 11:01 pm

    If McCain could tell the American people what is written here, and he explained how the crisis started and esculated (ala Reagan) , along with the Franklin Raines story, and how the large campaign contributions are connected to Democrats/Obama the election would be his.

  7. chris fabian permalink
    October 11, 2008 7:28 pm

    How is Barney Frank even in office- this is the issue facing washington today- idiots are in offices they have no business being in. This is just one of many morons in washington that worry about special interests and not the people who elect them. Get this moron out of washington.

  8. November 7, 2008 4:51 pm

    How was all this possible? OBAMA victory, Blue faction
    in Red States, subprime fifth column? Leftist Fascism under Legal protection? Weird, Congress full of Lawyers, now two more at the helm! Teach all Americans two years of law in HS, and addtional two years in college…this will level the legal field so we will never have to shell out $$$ for things we should know as American citizens. Let’s start with the Universities and Colleges: check out: Foundation Individual Rights in Education (FIRE)

  9. Rosanne Reddin permalink
    January 14, 2009 2:35 pm

    Can you PLEASE send this website to Bawney and “Chuck”? I think they STILL believe THEY are blameless, and how can they think they are not with the special “assignments” and positions they are given by their partners in crime, the Liberal Democrats (are there any who are not LIB’s anymore?). They and the MESSIAH must constantly be TOLD by US that they are the CAUSE of our problems NOT THE SOLUTION and their “bailouts & tax and spending to ‘create’ a GREAT SOCIETY” WILL NOT WORK. The business of America is business, not bailouts…….AND NOT INTIMIDATION to “GIVE” things to those who will not pay for those “things.” The DEMS are now FREE to accomplish what they have been trying to do for the past 8 years —– make GOV’t bigger and bigger and create an electorate which cannot possibly refuse to elect them. ANd, furthermore, they can use the economic problems as a good REASON to do their evil deeds.
    People used to say all politicians are crooked……..WELL that is certainly become truer and truer every day. It’s about time, don’t you think, that WE stand up for AMERICA???? I want to preserve Capitalism and freedom. I am no way ready for SOCIALIST/FASCIST state run by a MESSIAH who is an empty suit with “notorious” backers.

  10. January 24, 2009 10:21 pm

    Mr Pink Eyes, if it were just the subprime we would not be toast. It is alt a mainlythat will ruin this country and that was investment bank financed and the bonds were sold to unwary investors. You need to quit listening to fox.

    One more thing. Your bio says you are conservative. Conservatives like Pat Buchanan fear the neocons, the war party, who could provoke russia and get us into WW3. Wake up and put some drops in those pink eyes so you can see more clearly, buddy.

    And BTW a libertarian, Jesse Ventura, believes Bush allowed 9/11 and the explosives in the WTC.

  11. Phil permalink
    February 1, 2009 10:54 am

    Barney Frank, Nancy Pelosi, Chuck Schumer, and Chris Dodd are ruining this country. Unfortunately, Bush caved in and played right along with them when he offered the bailout for banks. That move of basically “nationalizing” the banks was the start of America’s slide out of capitalism and into socialism.

    Obama and all the above mentioned narcissists will continue these policies and basically end up destroying this country over the next 4 years. Mark my words… you will all wish for our world as it was before because you will never see it again.

    Socialism was not in the game plan back in the founding days of this country. That is what they were running away from… monarchies & “sharing”. Well, guess what, our Democratic Congress and President are moving us in exactly that direction… and no one is going to like it.

    It’s a damn shame….

  12. Bruce permalink
    March 22, 2009 8:07 am

    Write your representative in congress and senate and have them investigate (openly) the wrong doings of Pelosi, Reid, Frank, Schummer, Obama, and others who are trying to lead our country down the wrong path. For example, what ever happened to Jefferson with the $90K in his freezer during Katrina…what about all the other liberal democrats taking bribes, not paying their taxes, etc? Investigate and prosecute…

  13. Lawrence Mercier permalink
    March 23, 2009 8:29 pm

    I find it very amazing that Barney is lashing back at everybodyto take the heat off from himself. Even lashing out today at the judge for not allowing gay marriage. I tell you Barney if the judge is a Christian he is going along with the Bible and Gods word which all through the Bible tells us that homosexuality is destestiable to God and those who stay in this sin will go to hell. He is trying to tell you get out of that destable lifestyle of you go to hell. Plain and simple. Homosexual marriage will be the downfall of this country just as is abortion, but you would not this for your religion is liberalism and teaches nothing but it is all about me. With your views and your outrageous action in Freddie and Fannie you should step down and get your life in order. All this goes with what I have said right along that how can you trust a homosexual when he does not know right from wrong.

  14. March 25, 2009 12:57 pm

    Here is a blog concering Barney Frank and his idea of prosecuting the people responsible for the “crisis” we are now in.
    Check out

    http://optionsinvesting.wordpress.com/2009/03/05/rep-frank-pushes-for-prosecutions-over-meltdown/

    Leave a comment, let me know what you think.
    Steve
    optionsinvesting.wordpress.com

    • January 29, 2010 10:28 am

      The link has moved, Sorry to anyone who visited the page not found.

      http://21stcenturyteaparty.wordpress.com/2009/03/26/rep-frank-pushes-for-prosecutions-over-meltdown/

  15. Kalebarkab permalink
    June 9, 2009 1:19 pm

    I want to find good pop music. Help me please.

  16. July 12, 2009 3:21 am

    I added your blog to Google Reader.

    • July 12, 2009 5:25 am

      Thank you.

  17. Matthew Valentinas permalink
    August 31, 2009 6:59 pm

    Who’s the whack job going on about the judge who hates homosexuals and abortions? Another one who doesn’t believe in the seperation of church and state. Fannie and Freddie contributed to 5% max of the downfall of the economy. It was Wall Street selling knowingly selling bad mortgages in derivatives as fixed income safe investments using credit swaps. Not Barney and Chuck as incorrect as their policies may have been. I’ve worked on the cases like State Street where they victimized their investors, pension funds, retirees etc..

  18. September 19, 2009 11:26 pm

    BARNEY FRANK’S NEW PROJECT IS GIVING “ACORN” 4BILLION DOLLARS.

  19. Fred Johnson permalink
    June 25, 2011 11:22 am

    This is nothing but lies and propaganda. The entire story and the real truth can be read via this link–with real reporting and not an op ed piece. The George Bush white house oversaw the entire mess of Fannie Mae–and knew what was going on and fired those that tried to tell the presidnet and the public.

    The Bush White House balked at all regulations and overseeing to help
    the consumer from predatory lending practices

    http://www.nytimes.com/2008/12/21/business/21admin.html

  20. November 7, 2013 1:05 am

    Good day! This post could not be written any better!
    Reading through this post reminds me of my good old room mate!
    He always kept talking about this. I will
    forward this page to him. Pretty sure he will have a good read.

    Many thanks for sharing!

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