Tag: Great Recession

Big banks took ‘free money’ in 2008. They’re turning their backs now on small businesses, SBA official says.

Washington Post logo“What they are saying is, ‘I don’t give … a hoot about the small businesses,’”one SBA district director said in a candid call with business owners.

Big banks that received taxpayer bailouts during the global financial crisis a decade ago are now too slow in helping small businesses seeking assistance through a $349 billion emergency lending program, a high-level Small Business Administration official said in a recorded teleconference obtained by The Washington Post.

Some banks “that had no problem taking billions of dollars of free money as bailout in 2008 are now the biggest banks that are resistant to helping small businesses,” SBA Nevada district director Joseph Amato said in the Monday teleconference about the Paycheck Protection Program.

Amato’s comments offer a rare candid glimpse at the frustrations of federal officials working with thousands of banks to ramp up one of the most ambitious economic stimulus programs in U.S. history. Continue reading.

Federal government has dramatically expanded exposure to risky mortgages

Washington Post logoThe federal government has dramatically expanded its exposure to risky mortgages, as federal officials over the past four years took steps that cleared the way for companies to issue loans that many borrowers might not be able to repay.

Now, Fannie Mae, Freddie Mac and the Federal Housing Administration guarantee almost $7 trillion in mortgage-related debt, 33 percent more than before the housing crisis, according to company and government data. Because these entities are run or backstopped by the U.S. government, a large increase in loan defaults could cost taxpayers hundreds of billions of dollars.

This risk is the direct result of pressure from the lending industry, consumer groups and political appointees, who clamored for the government to intervene when homeownership rates fell several years ago. Starting in the Obama administration, numerous government officials obliged, mistakenly expecting that the private market ultimately would take over.

View the complete October 2 article by Damian Paletta on The Washington Post website here.

Ten years later: Wounds run deep from 2008 crash

The following article by Sylvan Lane was posted on the Hill website September 1, 2018:

Ten years have passed since the depths of the 2008 financial crisis and the U.S. has emerged as a more prosperous but less equal nation.

The bankruptcy of Lehman Brothers and government takeover of Fannie Mae and Freddie Mac in September 2008 set off a series of collapses that froze the global financial system and triggered a massive recession.

Millions of Americans would lose their homes to foreclosure and their jobs to the contracting economy. The devastation helped fuel the election of former President Obama, who enacted sweeping new rules for banks and a massive stimulus package over the opposition of Republicans.

View the complete article here.

10 Years Later: The Financial Crisis State by State

The following article by Joe Valenta was posted on the Center for American Progress website February 22, 2018:

The New York Stock Exchange stands in lower Manhattan, February 2017. Credit: Getty/Spencer Platt

Ten years ago, the financial crisis began, kicking off the Great Recession. U.S. households lost $19 trillion in wealth, and 8.8 million Americans lost their jobs. The crisis was fueled by predatory lending practices and lax oversight, with its ramifications felt not just in every state, but around the globe. As a result, then-President Barack Obama and Congress strived to limit the harm of a future crisis—and through passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, coupled with other laws and administrative actions, they built a stronger, safer financial system without unduly hampering lending or economic growth. Continue reading “10 Years Later: The Financial Crisis State by State”