Take a look at who is actually guilty. From the May 18-19 Hearing on the regulation of banking and exchanges. Senator Chris Dodd (D-CT):
I think the SEC did a very thorough job. This was not a
decision reached hastily at all, to put it mildly, after 4 or 5
years, and obviously, there is a significant debate about it,
and I know my colleague Senator Crapo and others have strong
feelings, and there are arguments to be held, so it is
worthwhile to go through this process as we go forward, but I,
for one, think the SEC is fulfilling its historic obligation
here, and that is dealing with investor protection, and it is
awkward, these changes, but to do otherwise, I think, would be
to fail on our responsibility collectively.
Chuck Hagel (R)You, of course, are aware that in December 2004,
the SEC informed Fannie that it did not properly apply an
accounting derivatives standard known as FAS 133. Last week,
Fannie May disclosed that it will delay its 2005 first quarter
financial report with the SEC and that it misapplied another
accounting standard, FAS 115, which it uses to classify its
I must state for the record that I am against corporate
From a meeting from September 2003. Hilda Solis (D-CA):
mismanagement, and I believe the steps that Freddie Mac has taken in
recent months to rectify their poor management issues are to be
commended. We as members of Congress must not allow these reported
management irregularities at Freddie Mac to obscure the important role
that housing GSEs play in making affordable mortgage lending available
to communities across the United States. Housing GSEs were created to
bring low cost capital to the housing market, a congressionally-
mandated obligation that, in my experience, has done well.
We must not lose sight of the fact that Fannie Mae and Freddie Mac
have harnessed their expertise in housing finance and greatly advanced
access to low cost capital to millions of low and moderate-income
From an October 30, 2007 hearing on "Minority Banking."
Congressman Melvin Watt (D-NC)
The GAO reported that several minority bank officials suggested that Federal regulators should consider undergoing additional training to
gain sensitivity to the unique challenged faced by minority
banks. I would like to hear more about those challenges and
what would be appropriate to respond to them.
I am reminded of the disaster in the Gulf Coast with
Congresswoman Maxine Waters (D-CA)
Hurricanes Katrina and Rita and the impact that they had on
some of our minority banks. While I know there was some
assistance, it was not enough. We do very little to preserve
and/or expand minority banks. And even though I think we can
find somewhere in our laws that it is intended that we should
try and preserve and expand minority banks, when we have
attempted to use that instruction and law, we have not been
able to execute anything in a real way.
And while I am doing that, I would like to make a
disclosure--because I think it is absolutely necessary--that my
husband is a director of a minority bank. So I want that on the
record, and I will submit my disclosure in writing.
Ms. Braunstein. The capital rules are mainly the Federal
And an exchange between Congresswoman Waters and Sandra Braunstein,
from the Board of Governors from the Federal Reserve:
Reserve's in terms of holding companies. We have done a couple
of things to address the concerns that have been raised by the
other panelists over the last year, and we are still working at
this, and it is not to say that we can't do more. But--
Ms. Waters. How does it work now?
Ms. Braunstein. Well, the way it works now is that for Tier
1 capital, a significant amount of the Tier 1 capital needs to
be voting stock. And so we do--we require at this point common
stockholders' voting stock to be the dominant element within
Ms. Waters. Well, I thought--I don't know if we are talking
about the same thing or not.
Ms. Braunstein. So one of the things that we have--
Ms. Waters. I really want to understand reserves because to
me, reserves means an amount that you hold aside to be there to
pay for whatever--losses, lawsuits, what have you. That is what
I am talking about. I am not talking about the--
Ms. Braunstein. Control?
Ms. Waters. Yes. I want to know about the reserve. Are
minority banks required to hold in reserve a disproportionate
amount of capital or money, compared to other institutions?
Where or how do you generally recruit for individuals that
Congressman Gregory Meeks (D-NY):
you need in your banks? I have been an advocate--in fact, in
one of the GSE bills, I had an amendment saying that the new
regulator needed to make efforts towards diversity there
because it has been my opinion that when you have a government
agency, and some of the regulatory agencies in particular, if
they hire minorities in there, then the experience that they
get from there, they now can go out and be employed by
individuals like yourselves and in other institutions.
So I am just wondering, how do you find that, and the
training, and would you say we need to--how could we improve
the diversity within the financial services industry?
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