O'Reilly advanced falsehood that "the Democrats in charge of the finance committees" resisted regulating mortgage industry

››› ››› CHRISTINE SCHWEN

On The O'Reilly Factor, Bill O'Reilly falsely claimed that "the Democrats in charge of the finance committees" resisted efforts by the Bush administration to regulate the mortgage industry and Fannie Mae and Freddie Mac in particular. In fact, it was only after the Democrats did gain control of both "finance committees" in Congress in 2007 that Congress passed legislation strengthening oversight of Fannie Mae and Freddie Mac.

On the February 24 edition of Fox News' The O'Reilly Factor, host Bill O'Reilly once again advanced a false attack on congressional Democrats over the housing crisis, falsely claiming that "the Democrats in charge of the finance committees" resisted efforts by the Bush administration to regulate the mortgage industry and Fannie Mae and Freddie Mac in particular. In fact, during President Bush's tenure, Democrats did not gain a majority of both houses of Congress -- and therefore control of both "finance committees" -- until 2007. Only then did Congress pass oversight legislation over Fannie Mae and Freddie Mac.

O'Reilly stated to Fox News analyst Karl Rove: "I researched this after I went after Frank -- and I researched it. And here is the absolute -- this is my certainty, and I want you to just reply to it. You're right. The Bush administration tried for three years to try to get more regulation over the mortgage markets and the banking system. They did. But they didn't bring it to the folks. ... Didn't raise the alarm." He later added that this failure of the Bush administration "provided the Barney Franks and [Sen.] Chris Dodds [D-CT] of the world -- the Democrats in charge of the finance committees in Congress -- it provided them cover because they, indeed, didn't want the regulations." Rove responded by saying, in part: "Frank in particular said that we were talking down the mortgage -- the mortgage markets, and we were talking about Fannie and Freddie, and that we were trying to create the bugaboo of a crisis where no crisis existed."

In fact, in early 2007, as the new chairman of the House Financial Services Committee, Frank sponsored H.R. 1427, a bill to create the Federal Housing Finance Agency (FHFA), granting that agency "general supervisory and regulatory authority over" Fannie and Freddie and directing it to reform the companies' business practices and regulate their exposure to credit and market risk. The FHFA was eventually created after Congress incorporated provisions that House Speaker Nancy Pelosi (D-CA) said were "similar" to those of H.R. 1427 into the Housing and Economic Recovery Act of 2008, which Bush signed into law on July 30, 2008.

Furthermore, before taking over the House Financial Services Committee chairmanship, Frank worked with committee chairman Rep. Michael Oxley (R-OH) on the Federal Housing Finance Reform Act of 2005, which would have established the FHFA to replace the Office of Federal Housing Enterprise Oversight (OFHEO) as overseer of the activities of Fannie and Freddie. After voting for the bill in committee, Frank voted against final passage of the bill on the House floor, stating that he was doing so because an amendment added to the bill on the House floor imposed restrictions on the kinds of nonprofit organizations that could receive funding under the bill.

Frank also spoke in support of "legislation that would have enhanced the regulatory structure for Fannie Mae and Freddie Mac" during an October 6, 2004, hearing on capital markets, insurance, and government-sponsored enterprises. During the hearing, Frank said:

First, I want to address a little history here. The committee here was well on the way to adopting legislation that would have enhanced the regulatory structure for Fannie Mae and Freddie Mac. In the Senate, in fact, the committee actually voted out a bill. There was some disagreement between the parties over I think a relatively minor section over receivership. I think that could have been worked out.

I believe we were well on the way, the chairman and I and the staffs, to putting together a bill that would have enhanced the regulator and could have passed. What stopped progress on a new bill was the Bush administration's determination to go beyond safety and soundness and into provisions that would have restricted the housing function.

[...]

What derailed the legislation was an insistence by the Bush administration on going beyond safety and soundness and giving the regulators, for example, particular power to say, well, they are going beyond their charter in housing; they should not do these new products. There were specific issues here that transcended safety and soundness or went under it, but the administration was seeking powers that were not related to safety and soundness. If they were to have dropped that, we would have a law already signed and in place, because on the question of safety and soundness regulation, there has not been a significant dispute.

From the February 24 edition of Fox News' The O'Reilly Factor:

O'REILLY: Remember when you scolded me for yelling at Barney Frank a few months ago? Remember that?

ROVE: I don't know if I -- I don't know if I said you yelled --

O'REILLY: You said I --

ROVE: -- at Barney Frank.

O'REILLY: You said I was in-civil, or you used some word I didn't understand -- some big word. But you basically said the message was OK, but my method may have been a little barbaric, which, of course, is perfectly true.

But, you know, I researched this after I went after Frank -- and I researched it. And here is the absolute -- this is my certainty, and I want you to just reply to it. You're right. The Bush administration tried for three years to try to get more regulation over the mortgage markets and the banking system. They did. But they didn't bring it to the folks --

ROVE: Yeah.

O'REILLY: -- didn't bring it to the folks.

ROVE: Yeah.

O'REILLY: Didn't raise the alarm. Didn't raise the Paul Revere, "The recession is coming. The recession is coming." Therefore --

ROVE: Yeah.

O'REILLY: -- by not doing that, it provided the Barney Franks and Chris Dodds of the world -- the Democrats in charge of the finance committees in Congress -- it provided them cover because they, indeed, didn't want the regulations. I'll give you the last word.

ROVE: We may just have a disagreement over degree here. I remember that we were criticized by Dodd and Frank. Frank in particular said that we were talking down the mortgage -- the mortgage markets, and we were talking about Fannie and Freddie, and that we were trying to create the bugaboo of a crisis where no crisis existed. So it may be that just there's a difference of disagreement over how badly we raised it.

O'REILLY: Yeah, but I'm saying that you could have kicked his butt. You guys could have kicked his butt if you had come out --

ROVE: We -- we could've --

O'REILLY: -- on programs like this. You could have.

ROVE: We could have if you'd helped us.

O'REILLY: You didn't bring it to me. You didn't. I didn't know about it, because I wasn't paying that close of attention.

Posted In
Economy, Housing
Network/Outlet
Fox News Channel
Person
Bill O'Reilly
Show/Publication
The O'Reilly Factor
Stories/Interests
Attacks on Progressives, Propaganda/Noise Machine
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