The Bush Economy, Lest We Forget: The Savings And Loan Scandal
- From: Curly Surmudgeon <curlysurmudgeon@xxxxxxxx>
- Date: Thu, 18 Sep 2008 22:01:20 -0700
Note the similarities to today's economic meltdown:
The Bush family and the S&L Scandal
"...The problems occurred in the Savings and Loan industry as they relate
to theft because the industry was deregulated under the Reagan/Bush
administration and restrictions were eased on the industry so much that
abuse and misuse of funds became easy, rampant, and went unchecked. ..."
-----snip----
"There are several ways in which the Bush family plays into the Savings
and Loan scandal, which involves not only many members of the Bush family
but also many other politicians that are still in office and still part of
the Bush Jr. administration today. Jeb Bush, George Bush Sr., and his son
Neil Bush have all been implicated in the Savings and Loan Scandal, which
cost American tax payers over $1.4 TRILLION dollars (note that this is
about one quarter of our national debt)." [editors note: This is 1989
dollars]
----snip----
"Jeb Bush defaulted on a $4.56 million loan from Broward Federal Savings
in Sunrise, Florida. After federal regulators closed the S&L, the office
building that Jeb used the $4.56 million to finance was reappraised by the
regulators at $500,000, which Bush and his partners paid. The taxpayers
had to pay back the remaining 4 million plus dollars."
Neil Bush was the most widely targeted member of the Bush family by the
press in the S&L scandal. Neil became director of Silverado Savings and
Loan at the age of 30 in 1985. Three years later the institution was
belly up at a cost of $1.6 billion to tax payers to bail out."
----snip----
"It should also be noted that shortly after news of Neil Bush's
involvement in the S&L scandal hit the press his father, George Bush Sr.,
announced the Desert Storm campaign in Iraq, which subsequently had the
result of making Neil's name quickly fade from the headlines. In addition,
while Neil Bush's divorce proceeding were exposing more backroom Bush
dealings, America was once again bombarded with war propaganda for
Operation Iraq Freedom."
http://rationalrevolution.net/war/bush_family_and_the_s.htm
======
Silverado Savings and Loan
Silverado Savings and Loan collapsed in 1988, costing taxpayers $1.3
billion. Neil Bush, son of then Vice President of the United States George
H. W. Bush, was Director of Silverado at the time. Neil Bush was accused
of giving himself a loan from Silverado, but he denied all wrongdoing. [2]
The US Office of Thrift Supervision investigated Silverado's failure and
determined that Neil Bush had engaged in numerous "breaches of his
fiduciary duties involving multiple conflicts of interest." Although Bush
was not indicted on criminal charges, a civil action was brought against
him and the other Silverado directors by the Federal Deposit Insurance
Corporation; it was eventually settled out of court, with Bush paying
$50,000 as part of the settlement, as reported in the Washington Post [11].
As a director of a failing thrift, Bush voted to approve $100 million in
what were ultimately bad loans to two of his business partners. And in
voting for the loans, he failed to inform fellow board members at
Silverado Savings & Loan that the loan applicants were his business
partners.[citation needed]
Neil Bush paid a $50,000 fine and was banned from banking activities for
his role in taking down Silverado, which cost taxpayers $1.3 billion. A
Resolution Trust Corporation Suit against Bush and other officers of
Silverado was settled in 1991 for $26.5 million.
http://en.wikipedia.org/wiki/Savings_and_loan_crisis
=====
John McCain is involved too:
"Lincoln Savings and Loan
The Lincoln Savings led to the Keating Five political scandal, in which
five U.S. senators were implicated in an influence-peddling scheme. It was
named for Charles Keating, who headed Lincoln Savings and made $300,000 as
political contributions to them in the 1980s. Three of those senators -
Alan Cranston(D-CA), Don Riegle(D-MI), and Dennis DeConcini(D-AZ) - found
their political careers cut short as a result. Two others - John
Glenn(D-OH) and John McCain(R-AZ) - were rebuked by the Senate Ethics
Committee for exercising "poor judgment" for intervening with the federal
regulators on behalf of Keating.[10]
http://en.wikipedia.org/wiki/Savings_and_loan_crisis
=====
Consequences
While not part of the Savings and Loan Crisis, many other banks failed.
Between 1980 and 1994 more than 1,600 banks insured by the Federal Deposit
Insurance Corporation (FDIC) were closed or received FDIC financial
assistance. [13]
From 1986 to 1995, the number of US federally insured savings and loans inthe United States declined from 3,234 to 1,645. [8] This was primarily,
but not exclusively, due to unsound real estate lending.[14]
The market share of S&Ls for single family mortgage loans went from 53% in
1975 to 30% in 1990.[3] U.S. General Accounting Office estimated cost of
the crisis to around USD $160.1 billion, about $124.6 billion of which was
directly paid for by the U.S. government from 1986 to 1996. [1] That
figure does not include thrift insurance funds used before 1986 or after
1996. It also does not include state run thrift insurance funds or state
bailouts.
The concomitant slowdown in the finance industry and the real estate
market may have been a contributing cause of the 1990-1991 economic
recession. Between 1986 and 1991, the number of new homes constructed
dropped from 1.8 to 1 million, the lowest rate since World War II. [3]
A taxpayer funded government bailout related to mortgages during the
Savings and Loan crisis may have created a moral hazard and acted as
encouragement to lenders to make similar higher risk loans during the 2007
subprime mortgage financial crisis.
http://en.wikipedia.org/wiki/Savings_and_loan_crisis
=====
The Resolution Trust Corporation was a United States Government-owned
asset-management company charged with liquidating assets (primarily real
estate-related assets, including mortgage loans) that had been assets of
savings and loan associations ("S&Ls") declared insolvent by the Office of
Thrift Supervision, as a consequence of the Savings and Loan crisis of the
1980s. It also took over the insurance functions of the former Federal
Home Loan Bank Board. It was created by the Financial Institutions Reform
Recovery and Enforcement Act (FIRREA), adopted in 1989. In 1995, its
duties were transferred to the Savings Association Insurance Fund of the
Federal Deposit Insurance Corporation.
Between 1989 and mid-1995, the Resolution Trust Corporation closed or
otherwise resolved 747 thrifts with total assets of $394 billion.
http://en.wikipedia.org/wiki/Resolution_Trust_Corporation
=====
--
Regards, Curly
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I Love Republicans, They Taste Just Like Chickenhawks
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