Monday, December 21, 2009

McCollum Denies He Pushed Policies That Led to the Economic Collapse, The Record Proves Otherwise

From FDP:

In a striking denial of the facts, Attorney General Bill McCollum today denied he voted for and sponsored legislation and policies that led to the economic collapse.

"McCollum says the banker-friendly policies he backed on banking and housing committee in congress contributed in no way to the economic collapse," McCollum was quoted as saying at a Republican Party breakfast at a Tampa area Perkins. (St. Petersburg Times/, The Buzz Political Blog, 12/16/09)

"Bill McCollum is a career politician trying to run away from his Washington record, but you can't argue with the facts. McCollum pushed the policies widely recognized as leading to the economic meltdown," Eric Jotkoff, Florida Democratic Party spokesman, said. "The record shows that McCollum not only voted for, but sponsored policies leading to the economic crisis despite being warned, as Vice Chairman of the House Banking Committee, of the danger. And after leaving Congress, McCollum took a turn through Washington's revolving door to make a fortune as a D.C. lobbyist for the same policies and special interest groups he served in Congress."

McCollum Helped Push The Controversial 1999 Legislation That Many Experts Say Helped To Create The Subprime Mortgage And Economic Crisis

McCollum Pushed For Laws That Allowed Banks to Take Riskier Investments in Mortgages. "Significant legislation in the early 1980s, which McCollum and most members of Congress supported, loosened rules on mortgages so banks could sell exotic versions, such as interest-only and adjustable rate loans. ... Over the years, McCollum collected hundreds of thousands in campaign donations from financial institutions. In the 1998 cycle, his top contributor was Bank of America with $18,000. In 1999, McCollum cosponsored the Gramm-Leach-Bliley Act, which undid a Depression-era law and allowed holding companies of commercial banks to own investment firms. That and a subsequent law in 2000 changed investment rules to allow banks to take on riskier investments in mortgages." (The Palm Beach Post, 05/25/09)

The Financial Services Act of 1999 Has Been Cited As An Underlying Cause Of The Subprime Mortgage Crisis And Economic Meltdown: The Financial Services Act of 1999 is often cited as an underlying cause of the subprime mortgage crisis and economic meltdown. The act knocked down the walls between banks that offered safe, run-of-the-mill loans and investment vehicles and banks that engaged in risky ventures. When combined, they exposed everyone in the marketplace to risk. "What you've got," said Robert Barbera, a Wall Street economist, "is a system that has gone wildly beyond the safety nets that were in place." (The New York Times, 09/26/08)

McCollum Sponsored The House Portion Of The 1999 Financial Services Act: Bill McCollum co-sponsored House legislation that, along with S 900, created the Financial Services Act of 1999. A significant portion of the Financial Services Act was the repeal of portions of the 1933 Glass-Steagall Act that knocked down barriers between banking, securities, and insurance companies. Many have cited the repeal of Glass-Steagall as a factor in the mortgage and financial services meltdown. (1999 CQ Almanac 5-22-23; Roll Call 276, HR 10, Jul 1, 1999)

McCollum Voted To Repeal Legislation Meant To Curb Financial Failures: Bill McCollum voted for an overhaul of banking and financial services regulations, repealing depression-era legislation meant to curb financial failures. The legislation, S 900, eliminated barriers to affiliations between banking, securities, insurance and other firms. The legislation enabled financial companies to offer corporate clients a full range of services, from traditional loans to investment banking services, like public stock offerings. It also paved the way for financial supermarkets, which could offer one-stop shopping for an array of services, all under one roof. The measure also encouraged corporate mergers. (The New York Times, October 23, 1999; Roll Call 570, S 900, Nov 4, 1999)

President Obama and Economic Experts Said The 1999 Legislation Helped to Create the Current Economic Crisis

"Economic Experts" Said The 1999 Legislation "Helped to Create The Current Economic Crisis." "Economic experts say that Gramm and others are to blame for the current crisis that is shaking Wall Street. Gramm's successful effort to pass banking reform laws in 1999, which reduced decades-old regulations separating banking, insurance and brokerage activities, helped to create the current economic crisis. 'As a result, the culture of investment banks was conveyed to commercial banks and everyone got involved in the high-risk gambling mentality. That mentality was core to the problem that we're facing now,'" Joseph Stiglitz, Nobel Prize-winning economist said. (ABC News, 09/19/08)

Obama Argued That the 1999 Legislation Led to Deregulation That Helped Caused the Economic Crisis: The Wall Street Journal reported that "President Barack Obama argued on the campaign trail that one bill - the Gramm-Leach-Bliley Act of 1999 - led to deregulation that helped cause the crisis. Among other things, that law allowed for the creation of giant financial supermarkets that could own investment banks, commercial banks and insurance firms, something banned since the Great Depression. Its passage, critics say, cleared the way for companies that were too big and intertwined to fail." (The Wall Street Journal, 03/10/09)

McCollum Was Warned of the Dangers of His Actions

On the floor of the U.S. Senate, Byron Dorgan warned, "I believe fervently that 2 years, 5 years, 10 years from now, we will look back at this moment and say: We modernized the financial services industry because the industry did it itself and we needed to move head and draw a ring around it and provide some guidance, some rules and regulations. I also think we will, in 10 years time, look back and say: We should not have done that because we forgot the lessons of the past; those lessons represent timeless truths that were as true in the year 2000 or 2010 as they were in the year 1930 or 1935. ... The point I want to make in the context of bank mergers is that the failure of a large, merged banking organization could be very costly to resolve. Additionally, the existence of such organizations could exacerbate the so-called too-big-to-fail problem and the risks it prevents." (Congressional Record, November 04, 1999)

As vice chairman of the Congressional Banking Committee in Washington, McCollum held daylong hearings into mortgage issues, including rising default rates and sub-prime lending practices. The St, Petersburg Times reported, "But hours of testimony resulted in little action. 'It was very hard to convince anyone it was epidemic,' said Cathy Lesser Mansfield, a Drake University law professor who testified before the committee." (St. Petersburg Times, 5/24/09)

McCollum Cashed-In On His Political Insider Status As a Lobbyist For the Same Special Interests Whose Bidding He Did In Congress

McCollum Lobbied On Behalf Of Mortgage Bankers Association Of America: From 2001-2003, McCollum lobbied on behalf of the Mortgage Bankers Association of America. During that time the Mortgage Bankers Association of America paid Baker & Hostetler $110,000. (House and Senate Lobbying Reports 2001-2007)

No comments:

Post a Comment