"Deregulation, the republicans ideology is what ruined the country and everyone knows it."
- Financial services were not deregulated during the Bush Administration.
- In 1994, state and federal action eliminated rules banning banks from operating in more than one state.
- President Bill Clinton signed the 1999 Gramm-Leach-Bliley Act into law, which could be considered a deregulation bill. In 2000, Congress also passed legislation that, among other things, clarified that certain kinds of financial instruments were not regulated by the Commodity Futures Trading Commission (CFTC). Among these were "credit default swaps," which have played a role in this year's meltdown.
- In the nine years since that legislation--including the eight years of the Bush presidency--Congress has enacted no further legislation easing burdens on financial services industry.
- In 2004, Clinton appointee Democrat Franklin Raines steps down as CEO of Fannie May for bad accounting practices - he was cooking the books to hide the risks of buying all the subprime mortgages. He left with $90 million after 6 years.
- Community groups and "progressive" political forces had lowered underwriting standards for lending.
- In the 1980s, groups such as the activists at ACORN began pushing charges of "redlining" - claims that banks discriminated against minorities in mortgage lending. In 1989, sympathetic members of Congress got the Home Mortgage Disclosure Act amended to force banks to collect racial data on mortgage applicants.
- Minority mortgage applications were rejected more frequently than other applications - not because of discrimination but simply because minorities tend to have weaker finances.
- A "landmark" 1992 study from the Boston Fed concluded that mortgage-lending discrimination was systemic. The study was tremendously flawed. The president of the Boston Fed said that no new studies were needed, with the US comptroller of the currency seconding the motion.
- The Boston Fed, clearly speaking for the entire Fed, produced a manual for mortgage lenders stating that: "discrimination may be observed when a lender's underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants."
- The Boston Fed ruled that participation in a credit-counseling program should be taken as evidence of an applicant's ability to manage debt. Bank regulators, not banks, required the loosening of underwriting standards.
- A 1995 strengthening of the Community Reinvestment Act required banks to find ways to provide mortgages to their poorer communities. It also let community activists intervene at yearly bank reviews.
- Banks that got poor reviews were punished; some saw their merger plans frustrated; others faced direct legal challenges by the Justice Department.
- A Fannie Mae Foundation report singled out a model of lending that worked with community activists and followed "the most flexible underwriting criteria permitted." That lender's $1 billion commitment to low-income loans in 1992 had grown to $80 billion by 1999 and $600 billion by early 2003. The lender was Countrywide.
- While Barney Frank was on the House Banking Committee, which had jurisdiction over Fannie, he had a gay relationship with Herb Moses. Moses worked as Fannie’s assistant director for product initiatives, and was at the forefront of relaxing lending restrictions. They broke up in 1998, a few months after Moses ended his seven-year tenure at Fannie Mae
In 2005, Senator Christopher Dodd, and all the Democrats on the Banking Committee blocked legislation to regulate Fannie and Freddie.
In 2006, John McCain co-sponsored a bill to address the problem. In a party line vote all the democrats voted against the bill.
