Tag Archives: S&L crisis

Bluto: Please Smash the Guitar and End the Bipartisan Deregulatory Kumbaya Chorus

By William K. Black
(Cross-posted from Benzinga)

The imminent passage of the fraud-friendly JOBS Act caused me to reflect on the fact that the worst anti-regulatory travesties in the financial sphere have had broad, bipartisan support.  The Garn-St Germain Act of 1982, which deregulated savings and loans (S&Ls) and helped drive the debacle, was passed with virtually no opposition.  The Texas and California S&L deregulation acts – the two states that “won” the regulatory “race to the bottom” – passed with virtually no opposition.  Texas S&L failures caused over 40% of total S&L losses and California failures caused roughly 25% of total losses.  In 1984, a majority of the members of the House of Representatives, including Newt Gingrich and most of the leadership of both parties, co-sponsored a resolution calling on us to cease our reregulation of the S&L industry.

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