You would have thought, after the 2008 Meltdown that laws
would have changed to not allow mortgage lenders to slice up, package and sell
their mortgages to investors. You also
would have thought that laws would change to repeal the Community Reinvestment
Act and HUD Rules, so that lenders were not subject to lawsuits for not giving
loans to unqualified borrowers, or laws to ban insurance policies on risky
investments (hedge funds), or laws restoring the Glass Steagall Banking
Act. None of that happened. Dodd-Frank codified bailouts. Some of this was attempted, but the efforts
got buried.
It makes perfect sense for States to pass a Banking law
that restricts home mortgage lending to banks that are registered to operate in
the State and not allow these banks to sell the mortgages to any other
investment institutions, ever. At the
same time, the State could nullify the Community Reinvestment Act and HUD Rules
and any other laws that would conflict with this reform. The bigger banks
should not be given any advantages over the smaller banks. Commercial banks
already handle business loans and should be included for the home mortgage
market.
Private investment dollars would need to be invested in
these banks to fund the purchase of mortgages from Fannie Mae and Freddie Mac
but they should be free to buy the mortgages they believe will be safe to buy
and leave Fannie and Freddie with the bad ones.
Bankers would have the incentive to work with reliable
borrowers and should be allowed to do that unmolested by State or Federal laws
The U.S. Constitution does not include home mortgage
lending in the enumerated powers for a reason.
Bond Sales
Bonds sales need to be reduced by limiting the State
borrowing limit for cities, counties, school districts and other entities and
educating voters that bonds cost double; you repay the principle, interest and
fees and pay double for what you get. There
are very few good reasons for government to sell bonds. A good limit is city and county assets. Most cities and counties own assets that can
be found in their annual CAFR (Consolidated Audited Financial Report). Most have assets that are about 400% of their
annual revenue or more.
This should reduce the amount of Muni Bond sales, so
banks would have more to lend in the home mortgage market.
Credit Cards
Credit Cards appear to be handled well by the big
mega-banks. They could keep doing that. As for their double digit interest
rates, let them be subject to the price/demand curve with no special political
favors.
Stocks
Brokerage services should be looked at to see if any laws
need to change, but so far, it looks like any financial institution can do
this. Money managers like Bernie Madoff need to be audited, so these folks
might need to be watched.
This looks like a good start for dismantling our NAZI
government to reconvert it back into a Free Market government.
Norb Leahy, Dunwoody GA Tea Party Leader
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