Lack of Oversight Led to Nation’s Financial Crisis

Congresswoman Barbara Lee (CA-09) said a lack of federal oversight led to the financial crisis that has forced Congress to consider a massive, $700 billion bailout of mortgage markets on Wall Street.
“Our economy is in turmoil. The collapse of Wall Street is crippling families on Main Street,” Congresswoman Lee said. “The government has stepped in to save Fannie Mae and Freddie Mac from failure, helped to finance the sale of Bear Stearns, and bailed out AIG, the world’s largest insurance company.
During Congresswoman Lee’s tenure on the House Financial Services Committee, she repeatedly warned the Administration about mounting excesses due to the rapid deregulation of financial markets, the dangers of predatory lending, and repeatedly demanded more oversight over the financial services industry.
“Our warnings were ignored by this administration and its allies in Congress who continued to champion deregulation as they assured us all of the “fundamental soundness” of our economy,” Congresswoman Lee said.
“The series of bailouts by the U.S. Treasury and the Federal Reserve and the most recent announcement of the need to create another ‘Resolution Trust Corporation’ to take on the massive amounts of bad debts held by our banks and other financial services companies show just how wrong they were,” Congresswoman Lee added. “We are truly seeing the horrific price of these reckless deregulation policies.
As Congress works to address this problem, Congresswoman Lee said it’s crucial that the federal government provides economic relief to the millions of those who are suffering all across this country.
“That means passing a robust economic stimulus package, providing additional assistance so people can keep their homes, and bringing back a system of sound regulation and oversight that will prevent these financial meltdowns from happening ever again,” Congresswoman Lee said.