Comments on: Blame it on Reagan

By: morganb

morganb — Mon, 01 Jun 2009 21:28:10 +0000

Captain Ned – thanks for being such a valuable resource!

By: Captain Ned

Captain Ned — Mon, 01 Jun 2009 21:14:51 +0000

Ah, but the insurance limit was raised to $100,000 not by Garn-St. Germain in 1982, but by the Depository Institutions Deregulation and Monetary Control Act of 1980. Oh, and the previous limit before DIDMCA was $40,000. For the record, the insurance limit history:

1935: $5,000
1950: $10,000
1966: $15,000
1969: $20,000
1974: $40,000
1980: $100,000
2008: $250,000 (as if anyone believes the "temporary" will remain so)

By: Captain Ned

Captain Ned — Mon, 01 Jun 2009 21:09:14 +0000

Here's the bill summary from the Congressional Research Service:

http://thomas.loc.gov/cgi-bin/bdquery/z?d097:HR...

Garn-St.Germain removed the deposit interest rate caps on thrifts, allowed for stock banks to be thrifts (previously only mutuals could be thrifts), allowed thrifts into commercial and commercial RE lending, allowed thrifts to run capital ratios as low as 3% including using fantasy regulatory “net worth certificates” (the real stinky part of this bill), and preempted state laws prohibiting “alternative mortgage transactions”, namely anything other than a 30-year fixed rate mortgage.

Nothing in Garn-St. Germain explicitly removed down payment requirements. At best, the preemption of state prohibitions on “alternative” mortgages can be said to achieve this.

By: Bobbo

Bobbo — Mon, 01 Jun 2009 17:08:21 +0000

Amaizing how THE MOST IMPORTANT part of this act is not discussed. How Mr. St. Germain went back into Congress at Midnight before the vote and secretly increased the amount FDIC/FDLSIC's insurance amount from the previously agreed increase of $10,000 to $30,000 to an increase of $100,000. He just went in and took the page with the originaly agreed upon amount and, (does this sound familiar?) slipped in a new page with $100,000 as the insured amount. St. Germain should have been thrown in jail for this. The S&L industry wanted this midnight change so they could 'grow' out of their problems. Sound familiar? If you go back to Barron's issues, you will see that they said 72% of S&L's were bankrupt in an article about 1980 (not sure of the date but am sure it was BEFORE Reagan). Nothing has changed. Democrats still change bills in the middle of the night and get congressional members to vote without reading them. Don't I remember this happening just last week. Didn't Waxman have a speedreader read part of a bill last week?

Elected officials – Democrats are evil, Republicans are dumb. Dems first string vs. Reps 3rd string.

By: shawn

shawn — Mon, 01 Jun 2009 16:32:54 +0000

A lot of generizations with no specifics: what exacly was the act? What was considered a “substantial down payment”? Is the down payment requrement the sole reason for his conclusion? Clinto balanced the budget? Yeah after he was forced to by the house!

He could be right but with all the generalization statements (not facts) he may as well be giving palm readings. Pfft….

By: Captain Ned

Captain Ned — Mon, 01 Jun 2009 15:12:13 +0000

Garn-St. Germain certainly had its effects but the real problem was two years prior with the Depository Institution Deregulation and Monetary Control Act of 1980. This specifically pre-empted existing and future state laws that regulated interest rates or fees charged on first-lien loans.

You all wanted a single mortgage regulator; you got it in 1980. Look how well it turned out.