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While Bailout Bills Vary from Senate to
House, Neither Would Stem Foreclosures
Byline: Matthew Russell Lee of
Inner City Press in DC: News Analysis
WASHINGTON DC,
September 22 -- With Capitol Hill
echoing with competing offers of billions of dollars to banks, and even
sovereign wealth funds, splits have emerged between the Senate and
House of
Representatives versions of the bailout proposal. Inner City Press has
obtained
copies of both drafts and puts them online here
(Senate) and here
(House).
The House
of Representatives version nearly entirely tracks the Treasury
Department's and
Federal Reserve's proposal, including virtually no consumer protections
or even
attempts to stem the flow of foreclosures at the root of the financial
meltdown. The Senate version takes a few halting steps in those
directions. But
since a vast majority of the mortgage loans at issue have been
securitized, it
seems that under either pending version, few loan modifications will be
possible.
Meanwhile
the Federal Reserve is in a frenzy of approvals, bailouts and
takeovers,
allowing public comment on none of them. Most recently on the night of
September 21, the Fed gave bank holding company status to Goldman Sachs
and
Morgan Stanley. Normally, that requires a public comment period,
including
under the Community Reinvestment Act. But the Fed ignored those
requirements.
It's as if otherwise applicable banking laws have been suspended or
repealed.
Fed's Bernanke: forget the law, I want to run AIG
On the
Community Reinvestment Act, known as CRA, contrary to many of the
claims now
being made, the that CRA law triggered the subprime crisis, it must be
noted
that while conglomerates like Citigroup and HSBC own subprime
subsidiaries,
CitiFinancial and the ex-Household Financial, and banks subject to the
CRA,
they never sought CRA credit for the subprime loans they made. They did
not
make the high-rate loans to comply with CRA.
Likewise
with AIG, which owns a saving bank subject to CRA, as well as subprime
lenders
under the American General and other brands. Now that the Federal
Reserve has
taken a 79% stake in AIG in exchange for its $85 billion bailout
through the
Federal Reserve Bank of New York, Fair Finance Watch has raised the
issue of
the Fed's duty to operate this questionable lending operation
responsibly.
These issues will be raised to Federal Reserve chairman Ben Bernanke,
including
Monday afternoon. Watch this site.
Watch this site, and this Sept. 18 (UN) debate.
* * *
These
reports are
usually also available through Google
News and on Lexis-Nexis.
Click
here
for a Reuters
AlertNet piece by this correspondent
about Uganda's Lord's Resistance Army. Click
here
for an earlier Reuters AlertNet piece about the Somali
National
Reconciliation Congress, and the UN's $200,000 contribution from an
undefined trust fund. Video
Analysis here
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