Fed Fiddled as Mortgages Burned

"Until the boom in subprime mortgages turned into a national nightmare this summer, the few people who tried to warn federal banking officials might as well have been talking to themselves."

"An examination of regulatory decisions shows that the Federal Reserve and other agencies waited until it was too late before trying to tame the industry’s excesses. Both the Fed and the Bush administration placed a higher priority on promoting “financial innovation” and what President Bush has called the “ownership society.”"

"The Fed was hardly alone in not pressing to clean up the mortgage industry. When states like Georgia and North Carolina started to pass tougher laws against abusive lending practices, the Office of the Comptroller of the Currency successfully prohibited them from investigating local subsidiaries of nationally chartered banks."

And that is a surprise, how, exactly? The Comptroller of the Currency has made it its life's work to gut state usury and fair lending laws. Banks know this, which is why they are opting to become "national associations" so as to exempt themselves from state regulation.

Notice something else going on: The new-found concern of the Bush Administration for the issue of sup-prime mortgages has nothing to do whatsoever with foreclosures and people being thrown out of their homes. It has all to do with protecting the lenders of those risky loans and protecting the investment entities that purchased the "collateralized debt obligations" that are bundled sub-prime mortgages.

This is a financial Hurricane Katrina and just like what happened after Hurricane Katrina, George Bush does not give a fuck about anyone other than the rich.