Where credit is due

1913: Federal Resewe Act creates national banking system.

1914: Federal Trade Commission Act prohibits unfair or deceptive business practices.

1933: With memories of 1929 stock crash still fresh, Glass-Steagall Act separates "commercial banks" focusing on consumer activities (checking, savings) from "investment banks," which deal with speculative trading and mergers.

1968: Truth in Lending Act requires banks to disclose loan terms & fees.

1970: Bank Holding Company Act Amendments first step toward weakening Glass-Steagall; allow commercial banks, via holding companies, to both accept deposits and make commercial loans.

1978: Supreme Court's Marquette decision gives banks the right to make loans in states other than where they are headquartered; lenders rush to places with the weakest consumer protections, e.g. Delaware and South Dakota.

'80s

1980: After interest rates rise 13 percentage points in 2 years, President Carter signs law further hollowing out Glass-Steagall. The measure--pushed through by Sen. Jake Garn (R-Utah), a former insurance executive--demolishes usury caps for mortgages and raises bar for prosecuting lenders.

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Jan 1981: Sen. Garn becomes chair of Senate Banking, Housing, and Urban Affairs Committee with fellow deregulation advocate M. Danny Wall as majority staff director. American Banker exults that "lobbyists here view Mr. Wall's promotion as a gift swept to shore by the [GOP] tide last election day."

1982: Sen. Garn coauthors Garn-St. Germain Depository Institutions Act, which deregulates savings and loan industry.

1984: S&Ls start crashing in Texas as oil boom peters out. More than 1,000 thrifts nationwide will fail between 1986 and 1995; debacle will cost $500 billion, including $124 billion in taxpayer money.

April 2, 1987: Sen. John McCain meets with federal regulators to discuss investigation of Lincoln Savings and Loan. The thriff's owner, Charles Keating, was the senator's business partner and campaign contributor, and flew McCain around on his private jet.

Sept. Drexel Burnham Lambert, home to "junk-bond king" Michael Milken, creates "collateralized debt obligations" (CDOS)--securities made up of myriad loan s an d bonds with different risk levels.

Dec 9, 1988: Silverado S& L collapses, leaving $1.3 billion taxpayer liability; board members include Neil Bush, who engineered loans to friends in what federal Office of Thrift Supervision will call "multiple conflicts of interest." Bush later tells Congress a few of his deals may have looked "a little fishy."

Feb 6, 1989: President George H.W. Bush bails out S&L industry; among those helped is his son, Jeb, as government takes over most of a $5 million second mortgage on his Miami office building.

'90s

Sept 30, 1995: Congress enacts Truth in Lending Act "reform," easing regulations on creditors; bill powered through by Rep. Bill McCollum (D-Fla.), a key recipient of finance, insurance, and real estate (FIRE) donations ($136,000 in 1993-94).

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Dec 22: As part of Newt Gingrich's Contract With America, Congress enacts a measure making it more difficult to sue companies for securities fraud.

Aug 2, 1996: Office of Thrift Supervision issues rule preempting almost all state laws regulating S&L credit activities.

1997-1998: FIRE sector spends more than $200 million on lobbying and $150 million on political donations; top agenda items include repealing Glass-Steagall to facilitate mergers.

March 4, 1998: First Union acquires The Money Store, nation's 5th-largest subprime lender (and home to ex-Yankee broadcaster Phil Rizzuto's commercials).

April 1998: Citicorp and Travelers announce biggest-ever corporate merger ($70 billion); transaction technically illegal under Glass-Steagall; CEO Sandy Weill launches $12 million campaign to repeal law.

June 1998: Conseco purchases mobile home lender turned subprime powerhouse Green Tree in $6 billion deal.

July 1999: North Carolina General Assembly bucks deregulation trend, passing landmark measure to curb predatory lending.

Nov 1999: Gramm-Leach-Bliley Act guts Glass-Steagall, setting off wave of megamergers among banks and insurance and securities companies. Driving force is Sen. Phil Gramm (R-Texas), who has received $4.6 million from FIRE sector over previous decade.

2000

June 20, 2000: Treasury and H U O urge Fed to investigate subprime units of major banks. No Fed action follows.

June 26: First Union doses The Money Store, takes $2.8 billion write-down.

Dec 14: As Congress heads for Christmas recess, Sen. Gramm attaches 262-page amendment to an omnibus appropriations bill Commodity Futures Modernization Act will deregulate derivatives trading, give rise to Enron debacle, and open door to an explosion in new, unregulated securities.

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Dec 27: American Homeownership and Economic Opportunity Act makes it harder for consumers to get out of lender-required insurance. National Association of Realtors lobbies hard for it, spending $9 million, plus $4 million in contributions.