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Former SEC official: Fannie Mae, Freddie Mac are ‘zombie banks’

Featured Events | Nov 05, 2015 |
Former SEC Commissioner Daniel Gallager speaks at a Fordham Law School event on Oct. 30, 2015.

Former SEC Commissioner Daniel Gallager speaks at a Fordham Law School event on Oct. 30, 2015.

Fannie Mae and Freddie Mac, the government-sponsored enterprises dealing with mortgage-backed securities in the United States, are “zombie banks” that led to an unsafe housing market bubble and still have not been reined in, a former Securities and Exchange commissioner told a Fordham University audience recently.

Daniel M. Gallagher Jr., who stepped down as an SEC commissioner in October after four years in the role, spoke at a Fordham Law School event, “Are We Ready For The Next Financial Crisis?” The Oct. 30 event, the subject of an article on the Fordham Law News web page, was led by Fordham Law Professor Richard Squire. The professor’s book, Getting Ready for the Next Bailouts, will be published in 2016.

Changing the way subsidies are provided in the housing market could help prevent another financial crisis, said Squire.

Gallagher also said the Dodd-Frank reform legislation – designed to “protect consumers from abusive financial services practices,” according to the act’s text – had failed to “address any of the root causes of the 2008 financial crisis,” according to the Law News article.

Read the entire article here.

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