Law Commons^™

Learning From Financial History: An Academic Never Forgets, David J. Reiss

David J Reiss

Those with short-term memories have been dominating our debate over the future of the Consumer Financial Protection Bureau. They argue that the financial industry has learned its lesson and they point to a more rational marketplace today. But the Bureau was designed to regulate the subprime mortgage market and other consumer credit markets through the credit cycle. A strong Bureau should be built today to deal with the inevitable irrational exuberance of lenders and consumers once the cycle rises from its current depths to the heights of tomorrow.

Fannie Mae, Freddie Mac, And The Future Of Federal Housing Finance Policy: A Study Of Regulatory Privilege, David J. Reiss

David J Reiss

The federal government recently placed Fannie Mae and Freddie Mac, the government-chartered, privately owned mortgage finance companies, in conservatorship. These two massive companies are profit-driven, but as government-sponsored enterprises they also have a government-mandated mission to provide liquidity and stability to the United States mortgage market and to achieve certain affordable housing goals. How the two companies should exit their conservatorship has implications that reach throughout the global financial markets and are of key importance to the future of American housing finance policy.

While the American taxpayer will be required to fund a bailout of the two companies that will …

Fannie Mae And Freddie Mac: Implications For Credit Unions, David J. Reiss

David J Reiss

This research brief provides an overview of the role of Fannie Mae and Freddie Mac in the housing finance market and provides a framework in which reform options for the two companies can be evaluated. These options include a return to the pre-crisis status quo; a move to redirect Fannie and Freddie income to affordable housing goals; nationalization; and privatization. The research brief evaluates a number of concrete reform proposals through the lens of these four options, including those of Credit Suisse, the Mortgage Bankers Association, the Housing Policy Council of the Financial Services Roundtable, the Center for American Progress …

Book Review: The Subprime Virus: Reckless Credit, Regulatory Failure, And Next Steps, David J. Reiss

David J Reiss

John Godfrey Saxe’s 19th century poem, “The Blind Men and the Elephant,” opens with six learned men

Who went to see the Elephant

(Though all of them were blind),

That each by observation

Might satisfy his mind.

The financial crisis is the Elephant of our time. Over the last couple of years, more than six wise men and women have written books purporting to explain the financial crisis and many more such books are surely in the works. Most of these wise ones suffer from the same limitations as the poem’s learned men. As each reaches out, he or she …