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Notes to Chapter 3 559

23. Specifically, between 1980 and 1994, 1,617 federally insured banks with $302.6 billion in assets
and 1,295 savings and loans with $621 billion in assets either closed or received FDIC or FSLIC assis-
tance. See Federal Deposit Insurance Corp., Managing the Crisis: The FDIC and RTC Experience, 1980–
1994 (Aug. 1998), pp. 4, 5.
24. William K. Black, Associate Professor of Economics and Law, University of Missouri–Kansas City,
written testimony for the FCIC, Hearing on the Impact of the Financial Crisis, session 1: Overview of
Mortgage Fraud, September 21, 2010, p. 4. And see Kitty Calavita, Henry N. Pontell, and Robert H. Till-
man, Big Money Crime: Fraud and Politics in the Savings and Loan Crisis (Berkeley: University of Califor-
nia Press, 1997), p. 28.
25. FDIC, History of the Eighties: Lessons for the Future, 1:39.
26. U.S. Treasury Department, “Modernizing the Financial System: Recommendations for Safer, More
Competitive Banks” (February 1991), p. 55.
27. Testimony of John LaWare, Governor, Federal Reserve Board, at Hearings before Subcommittee
on Economic Stabilization of the Committee on Banking, Finance, and Urban Affairs on the “Economic
Implications of the Too Big to Fail Policy,” May 9, 1991, p. 11, http://fraser.stlouisfed.org/
publications/tbtf/issue/3954/download/61094/housetbtf1991.pdf.
FDIC, History of the Eighties: Lessons for the Future, 1:251.
28. George G. Kaufman, “Too Big to Fail in U.S. Banking: Quo Vadis?” in Too Big to Fail: Policies and
Practices in Government Bailouts, ed. Benton E. Gup (Westport, CT: Praeger, 2004), p. 163.
29. FCIC, “Preliminary Staff Report: Too-Big-to-Fail Financial Institutions,” August 31, 2010, pp. 6–
9.(Rep. McKinney is quoted from the transcript of the hearing before the House Committee on Banking,
Housing, and Urban Affairs).
30. Ibid., pp. 10, 19.
Chapter 3
1. Federal National Mortgage Association, Federal National Mortgage Association, Background and
History (1975).
2. Department of Housing and Urban Development, 1986 Report to Congress on the Federal National
Mortgage Association (1987), p. 100.
3. See, e.g., Kenneth H. Bacon, “Privileged Position: Fannie Mae Expected to Escape Attempt at
Tighter Regulation,” Wall Street Journal, June 19, 1992, and Stephen Labaton, “Power of the Mortgage
Twins: Fannie and Freddie Guard Autonomy,” New York Times, November 12, 1991.
4. Armando Falcon Jr., written testimony for the FCIC, Hearing on Subprime Lending and Securitiza-
tion and Government-Sponsored Enterprises (GSEs), day 3, session 2: Office of Federal Housing Enter-
prise Oversight, April 9, 2010, p. 2.
5. Wayne Passmore, “The GSE Implicit Subsidy and the Value of Government Ambiguity,” Federal Re-
serve Board Staff Working Paper 2005–05. See also Congressional Budget Office, “Updated Estimates of
the Subsidies to the Housing GSEs,” April 8, 2004.
6. Federal Housing Finance Agency, Report to Congress, 2009 (2010), pp. 141, 158.
7. Fannie Mae Charter Act of 1968, §309(h), codified at 12 U.S.C. §1723a(h). The 1992 Federal Hous-
ing Enterprises Financial Safety and Soundness Act repealed this provision and replaced it with more
elaborate provisions. Currently, the GSEs typically define low- and moderate-income borrowers as those
with income at or below median income for a given area.
8. Department of Housing and Urban Development, “Regulations Implementing the Authority of the
Secretary of the Department of Housing and Urban Development over the conduct of the Secondary
market Operations of the Federal National Mortgage Association (FNMA),” Federal Register 43, no. 158
(August 15, 1978): 36199–226.
9. President William J. Clinton, “Remarks on the National Homeownership Strategy,” June 5, 1995.
10. President George W. Bush, “President’s Remarks to the National Association of Home Builders,”
Greater Columbus Convention Center, Columbus, Ohio, October 2, 2004.
11. Andrew Cuomo, interview by FCIC, December 17, 2010.
12. Daniel Mudd, testimony before the FCIC, Hearing on Subprime Lending and Securitization and
Government-Sponsored Enterprises (GSEs), day 3, session 1: Fannie Mae, April 9, 2010, transcript, pp.
18–19.