WASHINGTON — Former Republican presidential candidate Sen. John McCain blasted Fannie Mae, Freddie Mac and the big Wall Street banks on Wednesday for their role in the financial crisis, saying that no one has been held accountable.
"The housing crisis may be over, at least to some degree," the Arizona Republican said during a speech in Phoenix. "But I promise you those responsible have not been held accountable, and to our overwhelming shame."
Most of McCain's speech focused on the two government-sponsored housing giants, but during a question-and-answer session afterward, he was asked about the role that Wall Street played in packaging and selling dodgy mortgages.
"I agree with you that the ultimate responsibility, I think, lay with Wall Street," McCain responded. "They're the ones who have gotten off scot-free."
During the speech, the 2008 GOP presidential nominee said that he pushed to rein in Fannie and Freddie during the later stages of the housing bubble.
He also spoke favorably of his plan from the 2008 campaign to spend up to $300 billion to buy up mortgages and write down their value, saying that it might have at least stabilized part of the housing market, and comparing it to what he portrayed as more meager subsequent efforts by the Obama administration.
The senator argued that the government's response to the crisis left homeowners and small banks out in the cold, while Wall Street was rescued.
Referring to community banks, he said: "Those were the ones that we really should have been helping. And we didn't give them help."
At another point, McCain dismissed the various aspects of the Dodd-Frank Act that aim to end the problem of banks that are so big that investors do not believe the government will allow them to fail.
"Since we passed Dodd-Frank, you don't have to worry about that anymore," he said sarcastically.
But McCain reserved his harshest remarks for Fannie and Freddie, detailing their lobbying prowess prior to the September 2008 decision to take them into government conservatorship. He recommended that the audience read "Reckless Endangerment," a book co-authored by New York Times reporter Gretchen Morgenson, which details the rise and fall of Fannie and Freddie.
McCain placed particular blame on former Fannie CEOs James Johnson and Franklin Raines, who have not had to return the many millions of dollars they were paid before the firm collapsed.
"What went on you cannot make up," McCain said. "The goal was not to sell mortgages that you've got to pay back, but to sell mortgages."
McCain, a longtime critic of Fannie and Freddie, last year introduced legislation that would lower conforming loan limits, raise guarantee fees, and take other steps to wind the firms down. The bill has failed to attract any Democratic co-sponsors, and it has not been considered by the Senate Banking Committee.
He spoke Wednesday at an event about the Arizona housing market, which was organized by a conservative policy group called the American Action Forum. The group's president is Douglas Holtz-Eakin, a former director of the Congressional Budget Office who served as a senior advisor to McCain in 2008.
