[Congressional Record (Bound Edition), Volume 155 (2009), Part 10]
[House]
[Page 14083]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     REMEMBERING L. WILLIAM SEIDMAN

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
  Ms. KAPTUR. Mr. Speaker, I rise this evening to remember L. William 
Seidman, known to many as Bill. Among his many life accomplishments, he 
served as chairman of the Federal Deposit Insurance Corporation through 
the recovery of the savings and loan industry following the massive 
scandals and excesses of the 1980s. He was a patriot, a wry intellect, 
and a very sharp financial system regulator.
  Sadly, America lost Bill in mid-May, but his legacies will remain 
with us for years to come. Beyond his financial expertise, he led the 
effort for the creation of a State college in his home State, in the 
Grand Rapids, Michigan, area known as Grand Valley State University.
  Education is a key indicator of individual success, and through the 
leadership of Bill Seidman, young and old alike can further their 
learning and obtain new skills to achieve their dreams. I can see why 
this achievement was said to have been one of Bill's proudest.
  I've had the great privilege in my life of working with Bill Seidman 
during my own career, and most recently I invited him here to Congress 
to meet Members to engage his experience, along with that of Bill 
Isaac, another former effective Chair of the Federal Deposit Insurance 
Corporation, on the current financial crisis and the paths these two 
experts could suggest to resolve it and accelerate its resolution.
  Of his major concerns, based on a life dedicated to finance and 
prudent banking system regulation and performance, Bill Seidman felt 
that the lack of regulation in the derivatives market, including credit 
default swaps, was a severe and continuing problem. He discussed how 
former Federal Reserve Chair Alan Greenspan opposed regulating these 
instruments because they were agreements between sophisticated parties 
and need not be regulated.

                              {time}  2115

  Seidman strongly disagreed, stating that he felt that the credit 
default swaps market was a dishonest one. His words were prophetic.
  Seidman also felt that securitization lay at the heart of the housing 
crisis because of the way the practice is carried out. He said they 
take a bunch of mortgages, they bundle them up, and then they sell them 
off without any connection to the value of what they are selling. He 
said, ``If you can make money off garbage, go ahead and sell garbage, 
as long as you don't have to deal with it later.''
  Both Bill Seidman and Bill Isaac really advised America that we 
needed to fix securitization, including making sure that bankers have 
real ``skin in the game,'' that is, hold on to some of the risk rather 
than passing it all forward. I couldn't agree more strongly. It's time 
for transformation in these instruments and in the overall financial 
system.
  Our Members were honored to be discussing such matters with Mr. 
Seidman, as he had served as financial adviser to four Presidents, 
served as Chair of the Federal Deposit Insurance Corporation during a 
most difficult time as he helped steady our economic ship of State. And 
during his tenure, one of the Nation's largest banking scandals, the 
savings and loan crisis, unfolded, arising again out of a housing 
crisis.
  Under his watch, the FDIC, through the Resolution Trust Corporation, 
was created to take over the troubled thrifts and resolve them. Bill 
oversaw that as Chair of the FDIC and closed or reorganized 747 
institutions during the banking excesses of the 1980s. Their assets 
totaled over $400 billion.
  The assets were seized and sold at bargain prices through the 
Resolution Trust Corporation, and the goal of getting the maximum for 
those toxic assets and reducing taxpayer exposure was primary. Still, 
that mess cost over $124 billion to the U.S. taxpayer. Stability was 
established at a great price, but after his tenure, rather than 
Congress tightening down on bad behavior and improving financial system 
regulation, it just opened the doors and rewarded bad behavior, and it 
carried us to our current sad state of affairs.
  America will miss Bill Seidman's wisdom, his insight, his experience. 
He continued his knowledge and advice right up until the day we lost 
him. May we remember Bill. We thank his family for his hard work and 
dedication to his callings and the lessons he learned and taught us. We 
need to reread his words and to act thoughtfully and swiftly to solve 
the current crisis facing our Nation. I know he would want that for 
sure.
  I extend the sympathies of this Congress and our hope for strength to 
his family in the coming days to endure his loss, to Bill's wife, his 
children, his grandchildren, and great-grandchildren. He truly was a 
great American.
  Our country was strengthened by his service and it is with a sad and 
grateful heart and mind that I yield back the balance of my time this 
evening.

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