I oppose using taxpayer resources to bail out people who have made bad business and personal decisions. I have also opposed allowing executives and corporate officers of financial institutions that participated in various schemes through their greed who brought our financial market to its current state of disarray from profiting from any government actions to deal with this problem.

Unfortunately, Congress opened the door for financial institutions to invest in speculative ventures when it repealed provisions of the Glass-Steagall Act in 1999. This allowed banks to expand portfolios and invest in unstable instruments in financial markets such as subprime and other risky ventures.

On July 1, 1999, when this proposal first came to the House floor, it passed with a vote of 343–86. I voted against allowing this type of speculation by banking institutions. Furthermore, on November 4, 1999, I was one of only a handful of members to vote against the final version bill that passed. For your information, a newspaper recently published an article regarding this vote.

My vote reflects my past business experience and my strong belief today that financial institutions should not stray from their primary role. It should now be abundantly clear why banks and financial institutions should not be allowed to engage in speculative, competitive and risky business investment activities.

My concern in 2002 relating to the policy changes in lending practices adopted by rule in the Clinton Administration by Fannie Mae and Freddie Mac led me to cosponsor H.R. 4071, the Uniform Securities Disclosure Act. This legislation sought to amend both institutions’ charters to extend Federal securities registration and reporting requirements to their mortgage-backed and other housing-related securities.

Lax lending practices beginning in the late 1990s led to irresponsible lending and irresponsible borrowing. The subprime crisis was created by allowing banks and lenders loan to unqualified borrowers, and then spread unregulated new securities products throughout financial markets. Now, the taxpayer is being asked to pick up the tab for those reckless and abusive practices.

During the Clinton Administration by rule change Fannie Mae and Freddie Mac were allowed to lower cash reserves from 10 percent to 2.5 percent. Clinton HUD Secretary Andrew Cuomo from 1997 to 2001 opened the door to allowing those agencies to take on huge exposure to the sub prime markets.

We now know President Clinton’s appointment of Franklin Raines as Fannie Mae CEO turned out to be an example leading to today’s problem. Raines overstated Fannie Mae’s earnings by $10.6 billion so that Raines and his senior management could receive massive bonuses. In fact, Raines personally raked in nearly $100 million at Freddie Mac between 1998 and 2005. Dramatic reform in that institution was needed but ignored.

To view actual video of Congressional hearings relating to what was said by Democrats and Republicans concerning the status of Fannie Mae and Freddie Mac please access http://www.youtube.com/watch?v=_MGT_cSi7Rs

In recent years the race to create loans, to trade “no doc” and “no income” loans, and other non-regulated financial instruments helped bring on our current financial crisis. Many of the proposed new regulations now under consideration have been discussed and vetted over the last several years but were blocked by Democrats in Congress. In 2005, when Republicans passed Fannie Mae and Freddie Mac reforms out of the Senate Banking Committee, Senate Democrats uniformly voted down a Republican proposal to significantly increase the regulations on Freddie Mac and Fannie Mae. In the last two years alone, the Bush Administration went to the new Congressional Democrat majority in Congress 17 times to reform both institutions but was stymied each time by them.

With these Republican initiatives blocked by Congressional Democrats, the Bush Administration on its own took several measures on a case-by-case basis to try to keep the U.S. financial markets from collapsing. With federal action to rescue Bear Stearns, the re-taking of Fannie and Freddie, and its intervention to prevent AIG’s failure, federal regulators realized the crisis was deepening so they decided we must address the systemic problems that are dragging down our economy.