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Obama Ally Sen. Chuck Schumer (D-NY) Has Been A "Leading Voice For [Financial] Deregulation," Led Efforts To Block Reform Of Fannie Mae And Freddie Mac, And Was Instrumental In The Collapse Of Bank IndyMac:

Until The Current Financial Crisis, Sen. Chuck Schumer (D-NY) "Had Been A Leading Voice For Deregulation," Supporting Repeal Of Great-Depression Era Regulations, Re-Examining Corporate Oversight Laws, And Opposing Reducing Taxpayer Risks Associated With Fannie Mae And Freddie Mac. "Until the current credit crisis, Mr. Schumer had been a leading voice for deregulation: He ha s championed the repeal of a Great Depression-era law that prohibited commercial banks from underwriting securities; he has written an opinion piece calling for the Sarbanes-Oxley Act to be 're-examined,' and he has opposed a bill that sought to reduce taxpayer risk in the event of a housing market slowdown by requiring Freddie Mac and Fannie Mae to sell their entire investment portfolios of about $1.5 trillion worth of mortgage assets." (Joseph Goldstein, "Pro-Deregulation Schumer Scores Bush For Lack of Regulation," The New York Sun, 9/22/08)

Schumer Called On The Regulator For Fannie Mae And Freddie Mac To Lift Portfolio Caps. "Both Schumer and Christopher J. Dodd, D-Conn., the chairman of the Senate Banking, Housing and Urban Affairs Committee, have called on Fannie Mae and Freddie Mac's regulator to lift the portfolio caps. They argue that allowing the two firms to buy more mortgages, at least temporarily, would inject much needed liquidity into the market and calm the financial markets." (Michael R. Crittenden, "Schumer Will Seek To Lift Cap On Mortgage Portfolios Of Fannie Mae, Freddie Mac," Congressional Quarterly Today, 8/16/07)

Rep. Frank And Sens. Schumer And Dodd Protected Fannie Mae And Freddie Mac. "The powerhouse Democratic overseers of the banking committees -- Rep. Barney Frank, Sen. Christopher Dodd and Sen. Chuck Schumer -- protected Fannie and Freddie." (Robert Novak, Op-Ed, "Crony Image Dogs Paulson's Rescue Effort," Chicago Sun-Times, 7/17/08)

After The Subprime Housing Crisis Began, Schumer Advocated Raising The Cap On What Fannie Mae And Freddie Mac Could Lend. "Even last September, as the subprime housing crisis began to metastasize and the market was expressing concerns about the pair, Sen. Charles Schumer (D-N.Y.), the powerful chair of the Senate banking subcommittee on housing, had the very bad (and ultimately rejected) idea of raising the cap on what Fannie and Freddie could lend by 10 percent. Since then the companies have reported losses of $11 billion, and there's uncertainty about just how much more damage there will be from future defaults." (Editorial, "We Can't Say No, But We Can Regulate Them," [New York] Newsday, 7/20/08)

Despite Reports Of Fraudulent Accounting, Schumer Opposed Creating A Strong Regulator For Fannie Mae And Freddie Mac In 2004. "Even after Freddie Mac was shown to have manipulated earnings, Congress remained deadlocked over legislation to create a stronger regulator. Opposing one such bill in 2004, Sen. Charles E. Schumer (D-N.Y.) argued that a hostile regulator could use the proposed powers to choke the companies." (David S. Hilzenrath, "Fannie, Freddie Deflected Risk Warnings," The Washington Post, 7/14/08)

Schumer Released Letters He Sent To Federal Regulators Questioning The Financial Health Of IndyMac Which Led To A $1.3 Billion Run On The Bank. "Former IndyMac Bank workers who blame Sen. Charles E. Schumer for the collapse of the large Pasadena thrift have found an ally in their quest to hold the New York Democrat to account: a public relations firm with a Republican-heavy client list. Schumer, chairman of Congress' Joint Economic Committee and a strident critic of the Bush administration, on June 26 released letters he had sent to federal bank regulators, saying IndyMac's shaky state 'poses significant risks to both taxpayers and borrowers.' He questioned whether the regulators were 'prepared to take measures that would help prevent the collapse of IndyMac or minimize the damage should such a failure occur.' A run on the bank ensued, with depositors taking out a net $1.3 billion in the following two weeks." (E. Scott Reckard, "Former IndyMac Employees Seek Probe Of Sen. Charles Schumer," Los Angeles Times, 8/16/08)