It’s a thought. But, then, maybe Frank should consider reducing his own pay — since he and other Democrats opposed Bush Administration efforts to more closely regulate Fannie Mae and Freddie Mac.
Just a reminder:
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
Of course, the plan was opposed — by Democrats, including Barney Frank:
Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.
Remind me why we care what Barney Frank thinks again?
P.S. Another reminder. Who said this?
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac…and the sheer magnitude of these companies and the role they play in the housing market…If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie and Freddie pose to the housing market, the overall financial system, and the economy as a whole.
Barack Obama was concerned as well — concerned, that is, to make sure he was collecting as much money as possible from Fannie and Freddie. He did well, too, becoming the third top recipient in the Senate of Fannie and Freddie contributions from 1989-2008. [UPDATE: Make that second top recipient.] (Karl pointed out related figures days ago.) That’s fast work, since he’s been a Senator for only 4 years.
UPDATE: Yes, I know Republicans controlled Congress during this time. But this election is between McCain, who tried to do something, and Obama, who took money from Fannie and Freddie. As Ed Morrissey noted in the post linked above, the 2005 legislation never made it out of committee — and “Chris Dodd, then the ranking member of the Banking Committee and now its chair, was in the middle of receiving preferential loan treatment from Countrywide Mortgage, one of the companies gaming the system in the credit crisis.”