Forum Post: From S-900 to the Super Committee (The Congress That Screws Us)

Of the twelve members named to the Congressional "debt super committee" nine voted in 1999 for S-900, The Gramm-Leach-Bliley Financial Services Modernization Act. S-900 led directly to the 2008 financial collapse of America. These are the people in Congress TODAY who actually empowered the economic crash of 2008.

S-900 did three things that directly caused the real estate and financial collapse of America.

1. S-900 repealed Glass-Steagall. In doing this the law opened the door for "too big to fail" combinations of commercial and investment banks.

2. S-900 lowered regulatory standards for "toxic derivatives" that these banks then used in these fraudulent ways with impunity.

3. S-900 reorganized the Community Reinvestment Bank lowering the standards and allowing the kinds of predatory mortgage practices that underpin this lawsuit.

S-900, The Gramm-Leach-Bliley Financial Services Modernization Act, created "too big to fail" banks by its repeal of Glass-Steagall. S-900 also expanded use, by those banks, of what are now known as "toxic" derivatives. The instruments that the banks used to steal trillions of dollars in accumulated home equity of millions of honest Americans. And S-900 reorganized the Community Reinvestment Bank allowing banks to offer more risky mortgages to people who could not afford them.

Toxic Pat Toomey - PA (R) Sen. Kyl, Jon [R-AZ] Rep. Camp, Dave [R-MI-4] Rep. Upton, Fred [R-MI-6] Sen. Murray, Patty [D-WA] Sen. Baucus, Max [D-MT] Sen. Kerry, John F. [D-MA] Rep. Clyburn, James E. [D-SC-6] Rep. Becerra, Xavier [D-CA-31]

My freshman U.S. senator "Toxic" Pat Toomey, was in the House in 1999 and stood on the floor to defend both the repeal and the derivatives. Here is his floor speech:

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"The repeal of Glass-Steagall is necessary so that consumers can get the products and services they desire and American financial firms can compete in the global marketplace.

Madam Speaker, I would like to highlight just one small part of this sweeping legislation. I am particularly pleased that this bill includes an important provision regarding certain derivative transactions, especially credit and equity swaps. These somewhat obscure products are actually very important tools used by businesses, including financial service firms, to manage a variety of risks that they face. This bill reaffirms that swap contracts are legitimate bank products that can be executed and booked in banks and are adequately regulated by and will continue to be regulated by banking supervisors."