Fox “straight news” anchor Martha MacCallum and guest Stephen Moore repeatedly pushed the falsehood that retiring Rep. Barney Frank (D-MA) was to blame for the financial crisis because he supposedly opposed reform of Fannie Mae and Freddie Mac. In fact, Frank repeatedly tried to reform Fannie and Freddie and those enterprises were not the reason for the financial crisis.
Falsehood: Barney Frank Was “In Charge Of The Housing Market In Congress” But Did Nothing To Reform The System
Moore: “When We Talk About The Big Financial Crisis We Just Suffered Under ... The Guy Who Was In Charge Of The Housing Market In Congress, Was Barney Frank.” On the November 29 edition of Fox News' America Live, Martha MacCallum hosted a segment revisiting Barney Frank's tenure on the House Financial Services Committee with The Wall Street Journal's Stephen Moore. From the segment:
MacCALLUM: Steve Moore joins me now, senior economic writer at the Wall Street Journal. What do you think about that Steven?
MOORE: Hey Martha, great to be with you. You know, I think one of the reasons Congress has such a low approval rating is precisely because of people like Barney Frank. You know, when we talk about the big financial crisis that we've just suffered under, and especially the housing collapse, the guy who was in charge of the housing market in congress, was Barney Frank. [Fox News, America Live, 11/29/11]
Moore: “We Had This Huge Financial Meltdown In The Housing Market, It Caught People Like Barney Frank Completely Flat-Footed... Even After The Crisis Was Over, We Did Nothing To Rein It In” From the November 29 edition of Fox News' America Live:
MacCALLUM: You know, this has been reported here to a great extent, but it is something -- you know look at Occupy Wall Street and all of these sort of outrages against corporate America but the responsibility for what happened in the oversight of Fannie Mae and Freddie Mac is a story that is still continues to be told, and maybe something that Barney Frank doesn't want to deal with anymore. That's a question in terms of why he may be leaving, we don't know all of his reasons
MOORE: But you know Martha, it's worse than that, I mean you 're exactly right but what we did is, we had this huge financial meltdown in the housing market, it caught people like Barney Frank completely flat-footed--he never saw it coming, and then what did we do? We put him in charge of solving the problem, and this is one of the things that really makes me so angry is so then we passed this 2000 page you know the Frank --
MOORE: Dodd, to deal with the financial -- Dodd Frank -- you know what's amazing with that bill Martha, in that entire bill, do you know how many pages deal with reforming Fannie and Freddie? Zero. Not a single page. So even after that crisis was over, we didn't rein it in, and as you know, Fannie and Freddie and FHA are now guaranteeing eighty to ninety percent of the mortgages again, it's like we are doing exactly what got us into the crisis in the first place.
MacCALLUM: Indeed, and raking in millions of dollars in bonuses for doing such a good job. [Fox News, America Live, 11/29/11]
FACT: As Soon As Frank Was In The Majority, He Pushed Legislation To Reform Fannie And Freddie
Frank Supported Reforms Regulating Oversight Of Fannie And Freddie As Far Back As 1991.
- On September 30, 1991, Frank voted for a bill to create a new regulatory agency to oversee Fannie and Freddie that would have "[r]equire[d] the [agency's] Director to establish by regulation a risk-based capital test for the enterprises," "[r]equire[d] the Director to establish risk-based capital levels for each enterprise according to statutory guidelines," "[e]stablishe[d] minimum capital levels, critical capital levels, and enforcement levels," and "[s]et forth mandatory supervisory actions for the enterprises at various capital levels, including mandatory conservatorship." [Summary of H.R. 2900, the Government-Sponsored Housing Enterprises Financial Safety and Soundness Act of 1991, accessed 11/29/11; House roll call vote no. 278, 9/25/91]
- In October 1992, Frank voted for the Housing and Community Development Act of 1992, creating OFHEO, which was tasked with “ensur[ing] that Fannie Mae and Freddie Mac (the enterprises) and their affiliates are adequately capitalized and operating safely.” As with the bill Frank voted for in September 1991, the new law gave OFHEO authority to set, monitor, and enforce risk-based capital requirements for Fannie and Freddie. [Summary of H.R. 5334, the Housing and Community Development Act of 1992, accessed 11/29/11; House roll call vote no. 476, 10/5/92]
From 1995 To 2007 Frank Was In The House Minority. [Office Of The Clerk, Accessed 11/29/2011]
But Even While He Was In The Minority, Frank Worked To Reform Fanny & Freddie. In 2005, Frank, then the ranking Democrat on the House Financial Services Committee, worked with committee chairman Rep. Michael Oxley (R-OH) on the Federal Housing Finance Reform Act of 2005, which would have established the Federal Housing Finance Agency (FHFA) to replace the Office of Federal Housing Enterprise Oversight (OFHEO) as overseer of the activities of Fannie Mae and Freddie Mac. [House Financial Services Committee Report on H.R. 1461, the Federal Housing Finance Reform Act of 2005, 7/14/05]
- Frank Voted For The Federal Housing Finance Reform Act Of 2005 In Committee. [Committee vote on H.R. 1461, the Federal Housing Reform Act of 2005, 7/14/05]
- Frank Subsequently Voted Against The Bill On The House Floor, Stating That He Was Opposed To Restrictions On Organizations That Could Receive Funding Under The Bill. [Congressional Record, 10/26/05, House recorded vote no. 547, 10/26/05]
Once He Was Chairman Of The House Financial Services Committee In Early 2007, Frank Sponsored Legislation To Reform Fannie & Freddy.
- Frank Sponsored The Federal Housing Financial Reform Act of 2007 Soon After Democrats Regained The Majority. On March 9, 2007, Frank sponsored the Federal Housing Finance Reform Act of 2007. [Summary of H.R. 1427, the Federal Housing Finance Reform Act of 2007, accessed 11/29/11]
- Like The Bill Frank Worked On When He Was In The Minority, The 2007 Bill Would Have Established The Federal Housing Finance Agency To Regulate Fannie And Freddie., [H.R. 1427, the Federal Housing Finance Reform Act of 2007, accessed 11/29/11]
- Frank's Bill Passed The House With Bipartisan Support. Frank's bill passed the House by a vote of 313-104 in May 2007. [House recorded vote no. 396, 5/22/07]
- The Federal Housing Finance Administration Would Eventually Be Created After Congress Passed The Economic Recovery Act Of 2008. [H.R. 3221, The Housing and Economic Recovery Act of 2008, Accessed 11/29/11]
FACT: Fannie And Freddie Did Not Cause The Financial Crisis
Experts Agree That The Reckless Investment By The Private Sector, Not Fannie And Freddie, Caused The Financial Crisis. [Media Matters, 11/29/11]
For More On What Really Caused The Financial Crisis, Click Here