Three cheers for Sheila Bair, the former head of the FDIC and a true advocate for the little guy, who resigned this week on July 8th. She fought for what is right for the homeowner, the depositor and the taxpayer.
As a financial regulator, she understood the crisis as we do at Oppenheim Law, on the ground and in the trenches.
Truly the champion of the little guy, Sheila really understood that there were two sets of rules in this country:one set for big banks and another set for everyone else.
Her opinion was always dismissed and considered inferior to that of the Treasury and the Federal Reserve. She knew that the Obama Administration, while maybe understanding the plight of the little guy, always capitulated to the interests of big business, Wall Street and the banks.
Sheila understood that from Day One her responsibility was to protect the consumer, the depositor, the homeowner, and most importantly, the taxpayer. In a major piece written in the New York Times magazine this past weekend, she questioned why investment banks that were “counterparties” to AIG, like Goldman Sachs, received 100 cents on the dollar from the AIG bailout. Goldman, in fact, received over $12 billion from the bailout. As is well known, many people in the administration were in fact in some way connected to Goldman.
Before the crisis had truly descended upon our nation in 2007, Sheila understood that if banks were required to modify mortgages there was a possibility that the foreclosure crisis which led to the meltdown of the real estate market and subsequent destruction of the economy could possibly be contained.
No one listened to Sheila!
Shelia constantly tried to convince both the Bush and Obama Administrations that something needed to be done, however, her warnings were not heeded until it was too late.
Had the government listened to Shelia on early mortgage modification, it is possible “that the government could have prevented lots of pain and might have helped stabilize the economy a lot sooner,” according to the NYT.
However, Shelia states that maybe one of the reasons that mortgage modifications never really took off was that “maybe people thought that [she] was overstating the problem.” She added that in many cases regulators didn’t believe that borrowers were worth helping. The sense was that borrowers had probably overstated their income and assets and thus deserved to be thrown out of their homes.
Shelia also felt that the Treasury and the Federal Reserve did not lay the blame with overzealousness and greed on Wall Street but rather with a “system come undone.” We of course know that it was precisely greed on Wall Street that caused the crisis.
Needless to say, we here at Oppenheim Law will miss Sheila Bair and we hope, whatever she does, that she will not give up the good fight for what is right for the homeowner, the depositor and the taxpayer.
Three cheers for Sheila Bair!
From The Trenches,