You are viewing an obsolete version of the DU website which is no longer supported by the Administrators. Visit The New DU.
Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

Reply #12: Senators Reject Proposal For Banks to Bail Out Fannie, Freddie [View All]

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Latest Breaking News Donate to DU
Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jun-28-10 06:31 AM
Response to Original message
12. Senators Reject Proposal For Banks to Bail Out Fannie, Freddie
http://www.bloomberg.com/news/2010-06-24/senators-rejec...

Senate negotiators working on the financial-regulatory bill today rejected a proposal from House Republicans that would make big banks liable for the costs of winding down Fannie Mae and Freddie Mac.

The proposal would have made the government-controlled home loan companies, which own or guarantee more than half of the $11 trillion U.S. mortgage market, part of a Wall Street-financed rainy day fund that would be used to pay for the liquidation of large failed companies.

Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat who has led the Senate side of final negotiations on the bill, called the Fannie-Freddie proposal a stall tactic.

In a letter to lawmakers today, American Bankers Association Chief Executive Officer Edward Yingling said the provision could impose a tremendous additional liability on the banking industry of hundreds of billions of dollars.

House and Senate lawmakers are in the last stages of talks on the shape of the bill that would overhaul Wall Street rules. Under the legislation, if the assets of a failing financial company werent enough to finance its liquidation, other large firms would be tapped to cover costs. House Republicans wanted to define Fannie and Freddie as financial companies under the proposal.

Until being seized by the government in September 2008, Washington-based Fannie Mae and Freddie Mac of McLean, Virginia, operated as private companies investing in the mortgage market with an implicit government guarantee against default.

The government-sponsored enterprises were taken over by the U.S. Treasury Department when they were overwhelmed by losses linked to risky mortgages. Since then, they have been surviving on a promise of unlimited government aid, drawing $145 billion so far.

SINCE FANNIE AND FREDDIE ARE THE "BAD BANK" BLACK HOLE FOR THE NATION--IT WOULD ONLY BE FAIR THAT THE OTHER BANKS CONTRIBUTE TO THE COST OF THEIR BAILOUT VIA STUFFING THEIR MISTAKES INTO FANNIE AND FREDDIE....BUT NOOO! THAT WOULD BE JUSTICE!
Printer Friendly | Permalink |  | Top
 

Home » Discuss » Latest Breaking News Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC