[StBernard] House Republicans Ought to be Embarrassed about their Record on Fannie and Freddie

[Westley Annis]

House Republicans Ought to be Embarrassed about their Record on Fannie and
Freddie

Failure is the only word to describe the House Republicans' record on the
GSEs

 

            Washington, DC - Rep. Spencer Bachus should know better.  In a
long op-ed <http://www.politico.com/news/stories/0410/36344.html>  in
Politico, the Alabama Republican talks at length about the supposed
Democratic failure to reform the GSEs, but apparently President Bush's
"ownership society" doesn't apply to Republicans taking responsibility for
their own failures.  The Republican record
<http://financialservices.house.gov/pdf/timeline_for_fannie_freddie_regulati
on.pdf>  on Fannie and Freddie is clear and embarrassing: 

 

*	From 1995 to 2006 when the Republicans were in charge of Congress no
bill to reform the GSEs passed Congress. 
*	Republicans only held one vote in the House to regulate the GSEs-and
the bill was opposed by President Bush. 
*	Republicans in Congress did nothing when President Bush pushed
Fannie and Freddie's affordable housing goals to unsustainable levels. 
*	While in the majority, Republicans never passed legislation to
restrict subprime lending.  Rep. Bachus actually once believed in
restricting subprime lending, even negotiating and compromising with
Democrats in 2007, but he did not support the 2009 effort. 

 

By contrast, House Democrats quickly spearheaded efforts to reform Fannie
and Freddie after taking over the majority in 2007:

 

*	After only three months in the majority, Democrats on the House
Financial Services Committee produced a tough GSE reform bill that the Bush
administration supported. The bill passed the House within five months of
Democrats taking control. Rep. Bachus voted against the bill. 
*	House Democrats also pushed to include Fannie and Freddie reform in
the 2008 stimulus bill, but their efforts were rejected by the Bush
Administration.  The GSE reform bill stalled in the Senate due to the narrow
partisan divide but ultimately passed in July 2008. 

 

Even prior to taking the majority, Democrats pushed for reform of Fannie and
Freddie:

 

*	In 2004, Democrats, while in the minority, objected to President
Bush pushing Fannie and Freddie's affordable housing goals. ["Fannie,
Freddie to Suffer under New Rule, Frank Says," Bloomberg, June 17, 2004] 
*	In 2005, House Democrats worked with then-Financial Services
Committee Chairman Mike Oxley to pass the only Fannie and Freddie reform
bill to pass the House. In fact, every Democrat voted for the bill in
committee.  Although some Democrats objected to unilateral changes when the
bill reached the floor, the bill passed the House with overwhelming
bipartisan support.  
*	Senate Democrats then offered the Oxley bill in the Senate. However,
the bill died because the Bush administration and Senate Republicans were
opposed. 

 

Democrats initiated and led the fight on mortgage reform and anti-predatory
lending:

 

*	With Mel Watt and Brad Miller taking the lead starting in 2004,
House Democrats pressed Republicans to adopt subprime lending rules in light
of Federal Reserve Chairman Alan Greenspan's refusal to use the HOEPA
authority he had been given in 1994. 
*	The House of Representatives in 2007, and again in 2009, passed
tough measures designed to protect consumers from predatory lenders and
prohibit the type of "liar loans" that were so prevalent in the years
leading up to President Bush's homeownership failures.  
*	After House Democrats began working on anti-predatory lending
legislation, the Federal Reserve in 2007 finally issued rules to regulate
subprime lending pursuant to the 1994 Home Owners Equity Protection Act. 

 

Democrats led the Fight for More Affordable Rental Housing:

 

*	Fought for a greater balance between affordable rental housing and
homeownership, so people are not pushed into homeownership because
Republican federal policy says this is the only way to have a decent place
to live. 

 

But Rep. Bachus apparently longs for the good old days when Republicans
unabashedly pushed homeownership whether people could afford it or not.
Their record is clear.

 

President Bush on pressuring Fannie and Freddie:

 

*	"And so, therefore, I've called -- yesterday, I called upon the
private sector to help us and help the home buyers. We need more capital in
the private markets for first-time, low-income buyers. And I'm proud to
report that Fannie Mae has heard the call and, as I understand, it's about
$440 billion over a period of time. They've used their influence to create
that much capital available for the type of home buyer we're talking about
here. It's in their charter; it now needs to be implemented. Freddie Mac is
interested in helping. I appreciate both of those agencies providing the
underpinnings of good capital." [President Bush, June 18, 2002] 

 

Can't afford the down payment? President Bush: "We can deal with that."

 

*	"People take a look at the down payment, they say that's too high,
I'm not buying. They may have the desire to buy, but they don't have the
wherewithal to handle the down payment. We can deal with that. And so I've
asked Congress to fully fund an American Dream down payment fund which will
help a low-income family to qualify to buy, to buy." [President Bush, June
18, 2002] 

 

Even Bush appointees were concerned about the President's agenda:

 

*	In December 2005, [FHA Commissioner] Mr. Montgomery drafted a memo
and brought it to the White House. "I don't think this is what the president
had in mind here," he recalled telling Ryan Streeter, then the president's
chief housing policy analyst.  It was an opportunity to address the risky
subprime lending practices head on. But that was never seriously discussed.
More senior aides, like Karl Rove, Mr. Bush's chief political strategist,
were wary of overly regulating an industry that, Mr. Rove said in an
interview, provided "a valuable service to people who could not otherwise
get credit." While he had some concerns about the industry's practices, he
said, "it did provide an opportunity for people, a lot of whom are still in
their houses today." [NY Times, December 20, 2008] 

 

 

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