Study: Bush Administration Blocked Efforts to Prevent Housing Crisis

[Hissyspit]

Source: UNC-CH

Federal regulators in the Bush administration blocked attempts by state governments to prevent predatory lending practices that resulted in the financial crisis now stalking the American economy, a new study from the University of North Carolina says.

In 2004, the Office of the Currency Comptroller, an obscure regulatory agency tasked with ensuring the fiscal soundness of America's banks, invoked an 1863 law to give itself the power to override state laws against predatory lending. The OCC told states they could not enforce predatory-lending laws, and all banks would be subject only to less-strict federal laws.

Now, a research paper (PDF) from UNC-Chapel Hill's Center for Community Capital shows that those anti-predatory lending laws had actually worked. States that had stricter regulations on issuing mortgages were found to have fewer foreclosures. "We believe that these findings are remarkable, since they suggest an important and yet unexplored link between and foreclosures," the study's authors state.

The study may be the first scientific evidence to back up claims made by many critics that the Bush administration and earlier administrations allowed last year's financial crisis to happen by not enforcing common-sense regulations on lenders.

Read more: http://rawstory.com/2009/10/study-bush-blocked-efforts

[Ian David]

1. "No one could have anticipated..." n/t

[Turbineguy]

13. Those financial meltdowns

are going to have to give us their flight number and seat number from now on!

[HowHasItComeToThis]

40. WHEN WILL THEY BE LOCKED UP

[Brigid]

56. Never.

More's the pity. :(

[Wizard777]

21. The Bush administration couldn't anticipate the rising of the Sun in the morning.

[Confusious]

48. When I put my hand on that hot pot, I would be burned

If I don't eat, I would starve

If I don't put gas in my car, my car would not go

If I don't shower, I would smell

etc, etc, etc,

[MadMaddie]

50. That was always their excuse...

9/11
The Bank Crisis
Katrina

[Name removed]

60. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Tempest]

2. "and earlier administrations" ?

Bullshit.

The study claims the OCC in 2004 told the states they couldn't enforce their predatory-lending laws.

[xxqqqzme]

34. Yea, that's rich.

I noticed that too. It is almost obligatory in any study finding fault in dimson's admin.

[CanonRay]

3. Gee, what a surprise.

[Hissyspit]

17. Not to Eliot Spitzer:

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html

Predatory Lenders' Partner in Crime
How the Bush Administration Stopped the States From Stepping In to Help Consumers

By Eliot Spitzer
Thursday, February 14, 2008

Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.

Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

- snip -

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits.

[krkaufman]

78. 7 months before the (complete) meltdown.

thx for the article

[mbperrin]

4. In other news, a surprising link between imprisoning criminals and

a decrease in their criminal activity.

Gosh, whoda thunk?

[FiveGoodMen]

7. We should imprison the Bush criminals to further test that theory

[RedCloud]

9. On the red planet til they turn Blue. Provided NASA has the funds.

And the will.

[mbperrin]

10. I'm always up for a good scientific experiment! May we discard

the specimens after use?

[FiveGoodMen]

15. Please do!

[MissMillie]

5. lol.... here's the OCC news release

http://www.occ.treas.gov/toolkit/newsrelease.aspx?doc=zn9i8h7t.xml

[Hissyspit]

11. LOL to keep from crying. nt

[Solly Mack]

6. k/r

[Soylent Brice]

8. K&R

[sakabatou]

12. The * admin as the worst presidency ever is now scientifically proven

[Politicub]

14. Like anyone is going to do anything about it

or care.

People who supported him are already so blinded by the right that nothing can wake them up, I'm afraid.

[seafan]

16. Eliot Spitzer told us about this on February 14, 2008 in the Washington Post, Page A25

...blowing the whistle on the Bush gang as they greased the skids for increased predatory lending.


And the Bush Cabal promptly forced Spitzer out on March 10, 2008, in a move that long-time GOP operative Roger Stone "predicted". Nice, how Bush's warrantless wiretapping probably came in handy when it was *necessary*.


Spitzer wrote 20 months ago:

Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.
Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.
Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Let me explain:

.....

Study: Bush administration blocked efforts to prevent housing crisis. October 6, 2009

Federal regulators in the Bush administration blocked attempts by state governments to prevent predatory lending practices that resulted in the financial crisis now stalking the American economy, a new study from the University of North Carolina says.

.....

So, **when** are these criminals going to prison?

[AllentownJake]

18. How quickly after Spitzer wrote that did we learn about his

dalliance with a prostitute?

[seafan]

23. Yep, just over 3 weeks later, Spitzer was forced out. n/t

[Hissyspit]

24. About a month, I believe.

[Kaleko]

31. Now, that would imply a conspiracy

at the highest levels of government, and we all know such plots cannot possibly succeed in America!

[troubledamerican]

66. Eliot Spitzer believes in conspiracy. Always has.

If you don't believe in conspiracy, then you don't believe in history.

[Hissyspit]

25. The Raw Story Article:

Last year, seven months before the collapse of Lehman Brothers and the ensuing government banking bailout, then-New York Governor Eliot Spitzer wrote a Washington Post column in which he described how the Bush administration blocked states' efforts to prevent a crisis in the mortgage industry.

Spitzer wrote:

Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Spitzer's Post column ran a month before the New York Times reported that federal authorities were investigating Spitzer as a patron of high-end hookers, ending his political career and long-running crusade against corporate malfeasance. Some observers, including investigative reporter Greg Palast, say this was not a coincidence.

[L. Coyote]

19. Translation: Bush aided banks/lenders is stealing American's savings

Tell it like it is, FCS!

[AlbertCat]

61. Well, they caught Neil! So the S&L scam was toast. They had to do something!

[katty]

20. yep, this was known by many for years

[paparush]

22. What? You mean, allow a disaster to happen then take advantage of the political vacuum?

Our Bush?

NEVAR!!

:sarcasm:

[Overseas]

26. K&R.

Predatory lending was rebranded -- they were merely marketing "subprime" loans. There there, that sounds better, doesn't it.

Just like foreclosure is so much more demure than eviction.

And recision sounds so much neater than dropping sick people.

[Fire1]

30. And deregulation sounds better than theft and corruption. n/t

[No Elephants]

54. And even an incompetent SEC sounds better than an SEC that deliberately ignored

things like Madoff and securities consisting chiefly of high risk mortgages.

[No Elephants]

51. Thing is, they were marketing subprime loans so they could sell them to those

who bundled them and sold the bundles as a securities. That's where the banks made their money, on the resale. Well, that and the points and fees for the mortgage loan.

The SEC was as asleep on those securities as it was on what Madoff was pedaling. And both were crap.

Then, AIG (hereinafter known as "too big too fail") insured the risk of the crap security.

The securities were then sold all over the world.

Badda Boom. Badda Bing. Global economic collapse.

And the Republicans start yelling about what?

the predatory, greedy banks? No.

The appraisers who brought banks appraisals that exceeded the mortgage amount, even if the place was falling down? No.

Bush? Lord, no!!! A thousand times No!

The Bond Rating companies that rated the crap securities triple A? No.

The bundlers? No

AIG? No.

Bush's SEC? Heavens, no.

Liar loans! Liar loans! Barney Frank! Liar Loans!

[mrdmk]

87. The Republicans got more traction with ACORN

A group (non-profit, apolitical) that worked in poor communities. In addition, ACORN was in the process of re-organizing itself. Yeah those big, bad-ass Republicans who screwed the U.S. Middle Class.

[NBachers]

69. I still like Clawback

[McCamy Taylor]

27. Gov. Eliot Spitzer reported on this in Feb.2008---and got rail roaded by the DOJ for it.

The speed at which the feds found something to charge him with should prove that the warrantless wiretap program was conceived by Cheney in January 2001 as a way to dig up dirt on political enemies.
This is why Congress never dared to impeach. They were all too scared.

[old mark]

28. Gosh - you mean Bush was WRONG?????

How come it took till NOW for some enterprising journalist to discover this ?

mark

[No Elephants]

53. Not wrong. Evil.

I could almost forgive straightforward error. After all, to err is, well, George Dummya Bush.

When you override state consumer protection laws, though that is no simple mistake. Even Dummya had to know that.

He sacrificed the consumer to the financial world.

[old mark]

79. He seems to have sacrificed us to anyone with a lot of money -

It's amazing how much of a mess the Bush regime left us - I don't know long it will take to even find the extent of the bad done by their administration.

mark

[fasttense]

83. We Americans were (and still are to Republicons) nothing more than trade bait.

Do you want to sell poisoned, tainted crap to Americans, make a bundle of money and leave the American consumer holding the bag? NOOOOO PROBLEM, come on down, we'll let you in and all you have to do is bribe, I mean share your wealth with Tom Delay, or the bush crime family. Even Cheney got his cut from oil supply manipulation of American consumer markets, not to mention KBR kick backs and Halliburton contracts.

China's making out, India's rich are raking in millions, Asian markets made bundles, bankers and Wall Street betters everywhere got filth rich off of destroying the American economic infrastructure. And what did the American middle class get for all of this???? Poverty and mangoes.

Our carefully built manufacturing economy with a strong middle class that created the largest market in the history of the world, was sold off to the highest bidder.

[santamargarita]

29. Why am I not surprised with that un-elected fascist shitbag

:puke:

[Roon]

32. I know a lot of people who got rich off of predatory lending..

the operation is shut down now,but at the time it was HOPPING!

[Zorra]

33. In 2000, the SCOTUS appointed Bu*h to the Presidency as part of a plan

to strangle democracy and the economic and political power of working people in America in order to consolidate transnational corporate control of our country.

"The global power of the financial centers is so great, that they can afford not to worry about the political tendency of those who hold power in a nation, if the economic program (in other words, the role that nation has in the global economic megaprogram) remains unaltered. The financial disciplines impose themselves upon the different colors of the world political spectrum in regards to the government of any nation. The great world power can tolerate a leftist government in any part of the world, as long as the government does not take measures that go against the needs of the world financial centers. But in no way will it tolerate that an alternative economic, political ]nd social organization consolidate. For the megapolitics, the national politics are dwarfed and submit to the dictates of the financial centers. It will be this way until the dwarfs rebel . ."

http://flag.blackened.net/revolt/mexico/ezln/1997/jigsaw.html

[newspeak]

80. Thank you Zorra

When the transnational corporations have sweeping influence over the rest of the world, being a nation becomes moot; for the power of the corporations override the will of the people. Remember deregulation of the S&L's, at one time considered the biggest heist of our time. I remember Poppy was up for presidency and the MSM sat on it until after he was elected. When California deregulated the energy industry, Enron had a field day. When Davis asked * to allow him to re-regulate, because people were losing their businesses, people were dying, * basically told him to fek off.

Remember before the election of *, that he garnered approximately 848,000. dollars from alleged insider trading. Remember the head of the SEC at the time was daddy's friend. I believe he was given a warning letter from the SEC that selling could be considered insider trading. He did it anyway, because, hey, who's going to stop him? Brother Neil screws the shareholders and depositors of the S&L, he gets a tap on the hand-can't be in banking any more-but I believe he and Milken (junkbond king) are making a fortune on their bogus education venture. Isn't it nice to have a brother as president, where you can sell your products to public schools?

Such corruption, and where is real justice?

[barbtries]

35. i saw the headline

and just sighed, not surprised in the least.

[kestrel91316]

36. Of course they did. They wanted us all homeless or dead.

[Octafish]

37. ...and broke...

...having shaken us down for every last cent.

It almost makes me feel better for a second when people tell me we're not living in NAZI times.

[jimlup]

38. I'm basically not at all surprised at anything these plutocrates did

[tomm2thumbs]

39. color me scalded by the obvious /nt

[Geek_Girl]

41. I often wonder if this all wasn't done by design

given the Bush family Robber Baron history.

[Mr. Sparkle]

42. I bet Bill O Reilly is going to feel like an ass after blaming Dodd and Barney Frank all this time.

but I suspect that scumbag has not shame and will try and wriggle his way out of it.

[WorseBeforeBetter]

71. LOL, sure he will.

The right-wing response will be something along the lines of "those damn libruls in Communist Chapel Hill!".

[unpossibles]

84. Um, no they won't

neither will they change their tune - the SOP seems to be to ignore any and all evidence to the contrary of their opinion.

[Torn_Scorned_Ignored]

43. Isn't there something

that will send these FUCKS to prison?

:redbox: :tv:

[defendandprotect]

44. We've known about this for forever . . . is the info gettng out to public now????

Elliot Spitzer was trying to prevent this whole catastrophe -- as we all know!

[No Elephants]

57. By 2008, it was much too late to prevent it. The collapse in Europe had already started.

Please see Reply # 51.

[defendandprotect]

62. Disagree that SEC was "asleep" . . . maybe paid to be asleep . . .???

And "asleep" on Madoff?

Appraisers, bond rating companies, AIG -- all in on this --

[Laf.La.Dem.]

45. common-sense regulations on lenders

You used "common-sense" in the same paragraph as Bush (I see what the problem is):evilgrin:

[Gman2]

46. Every repuke should have their mouth wahsed out with this article.

[zbdent]

47. two words ...

NO

SHIT...

[gordontron]

49. kick nt

[geckosfeet]

52. Study? A casual observation is all that was needed. Or maybe some common fucking sense.

[WestSeattle2]

55. Well said! n/t

[No Elephants]

58. Bush was the final straw. But this started with DeRegulating Ronnie and the vast.

expansion of lobbying that began in 1982.

Then came Phil Gramm and repeal of the Glass Steagall Act, signed by Bill Clinton.

And all that paved the way for Bush.

Barney Frank did indeed play a role as well, although I would like to believe that his goal was to stop redlining and not to enrich banks and the rest of the financial world at the expense of the consumer. But, I don't know whom to trust anymore.

Republicrats and Demlicans and K Street.

[tortoise1956]

67. You won't believe the cast of players involved in this...

Here are some tidbits:

The NYT reported in 1997 that the White House was pressuring Fannie Mae and Freddie Mac to increase sub-prime lending.

Greenspan fought to keep the derivatives market unregulated (starting in the 1990's).

Both the Senate and the House went out of their way to ease banking regs throughout the 1990's, until recently - BOTH PARTIES!

In 2007, SCOTUS decided a case (Watters v. Wachovia Bank) that upheld the right of the OCC to pre-empt state banking regs. Ironically, the decision was 5-4, as shown below:
GINSBURG, J., delivered the opinion of the Court, in which KENNEDY, SOUTER, BREYER, and ALITO, JJ., joined. STEVENS, J., filed a dissenting opinion, in which ROBERTS, C. J., and SCALIA, J., joined. THOMAS, J., took no part in the consideration or decision of the case.

(The division on this decision is simply amazing to me...)

Here is a link to the decision:
http://www.supremecourtus.gov/opinions/06pdf/05-1342.pdf

In 2009, another SCOTUS decision (Cuomo vs. Clearing House Association) finally stripped this power from the OCC. Guess who wrote the decision? This one floored me:
SCALIA, J., delivered the opinion of the Court, in which STEVENS, SOUTER, GINSBURG, and BREYER, JJ., joined. THOMAS, J., filed an opin-ion concurring in part and dissenting in part, in which ROBERTS, C. J., and KENNEDY and ALITO, JJ., joined.

Link to decision:
http://www.supremecourtus.gov/opinions/08pdf/08-453.pdf

The point I am trying to make is that this goes all the way back to Reagan, and neither party did much to stop, or even slow, the landslide. I guess PAC money trumps ordinary voters every time...

[inna]

73. great post, and (belated) welcome to DU, tortoise1956!

as for "bipartisanship" as long as corporate interests are involved.... what else is new.


of the corporations, by the corporations, and FOR the corporations. that's our gov't.

[tortoise1956]

75. Thanks for the welcome!

I've been around a while, but I rarely post.

I agree about the corporations. They all have their pet politicians that they have bought off. IMO, the main difference between the parties is which special intereste they pander to when they write legislation...but then, maybe I'm just too cynical!

[SWr]

59. lot of blame

There's a lot of blame to go around but lets not forget the people that took the loans as well.


The people that used to live down the street from us moved in during this mess they took an ARM and they were approved for a home WAY outside of their means. They have since folded on the loan and moved into an apartment.

They are just as much to blame as the bank ... they should have known what they could ACTUALLY pay each month thats basic math.

[Hannah Bell]

76. bull-double-shit, "They are just as much to blame as the bank".

[SWr]

89. so ...

SO if i offer you a loan that is currently at 4% but tell you outright it COULD go as high as 20%

your going to tell me if you sign on the dotted line you have no obligation to pay.

Your not responsible at all?

[newspeak]

81. okay, so who's to blame for the S&L heist?

You gonna blame all of the depositors? It was deregulation--the foxes guarding the henhouse--what I see is a bunch of con men and ponzi schemes. Look at the eighties and junkbonds. You mean the people who were "sold" a deal--the people who once had decent jobs to pay for those loans?

[SWr]

88. not at all

Not the same situation ... the SL had NOTHING to do with depositors.

These other people TOOK LOANS .. DO YOU GET THAT?

When YOU APPLY and TAKE a LOAN and SIGN FOR IT ... YOU HAVE A responsibility to sit down on paper, with a calculator

or in these peoples cases finger and toes to MAKE SURE your MONTHLY expenses WONT prevent U from being able to pay the loan.

You people want to make excuses for people that just made PLAIN STUPID DECISIONS .. I WOULD NEVER TAKE a mortgage that had a variable APR ... thats just plain freking stupid no matter what the bank offers. With that kind of money on the line one small increase in % point and its game over.

[newspeak]

91. yeah, right because there's a sucker born every minute

I remember when we got our loan, the loan officer attempted to sell us on an ARM--wouldn't take it--but, you see, I remembered the seventies. Younger people wouldn't remember that.

Of course, who would of thought that after working over twenty-five years with the same company, you'd be laid off? People cannot foresee what's going to happen in the future, especially if you think your sitting pretty now.

What bothers me? A person in desperation goes and robs a bank. Gets maybe twenty-five years in prison. A person or corporation screws thousands of people, ruins some lives, maybe, just maybe they'll get a slap on the wrist. It seems the more people you screw, the more chance you have of getting away with it. Or maybe, it's who you are-a wealthy person with influence has a better chance of getting away with a heist than someone who is poor.

[winyanstaz]

63. more treason....and more reason to throw their asses in jail.

[defendandprotect]

64. Agree -- should have been done long ago --

[donheld]

65. Bushie didn't keep us safe from those without or within

[XXXMADAM]

68. They blackmail everyone

CIA/FBI PIMPS
http://www.defraudingamerica.com/robin_head.html

[NBachers]

70. So how many bush sleeper agents are still in the Office of the Currency Comptroller?

How many sleeper agents remain throughout the entire federal government structure?

Every damn one of them should've been rooted out, tarred & feathered, ridden out of town on a rail, and banished in disgrace from any government work forever.

Unfortunately, many of them still remain, destroying our government's ability to function. Foreign Agents? We have more to fear from American agents.

[mzmolly]

72. You mean ACORN is NOT responsible?!

:sarcasm:

[HappyCynic]

74. K & R

[Hannah Bell]

77. now that dems control 2 branches of gov't, could we get some prosecutions?

the implication - that the bush admin knowingly aided the fleecing & bankrupting of the american people by the financial industry - is waiting to be brought to light.

[fascisthunter]

82. class warfare.... from the top

[Imagevision]

85. Of course Obama just continues to look the other way... hope? - yeah!?!

[sofa king]

86. I said it before, and I'll say it now.

I said they'll need a distraction so huge that nobody will care anymore about the thousand other high crimes they committed. And they got it.

And, like everything else, they made it happen.

[KansDem]

90. Deleted message

No, it's not really deleted. I mean, what I have to say about Bush and his ilk and the way they totally fucked up this country and world would definitely get deleted, so I thought I'd just save the moderators some time and delete it myself...