Sen. Jon Kyl, a key player in negotiating the Wall Street bailout/economic stabilization bill, said the time has come to break up and sell Fannie Mae and Freddie Mac, the nation's two largest mortgage finance lenders.
The Federal National Mortgage Association, which is known by the chummy nickname Fannie Mae, and the Federal Home Mortgage Corporation, which is otherwise known as Freddie Mac, have operated since 1968 as government-sponsored enterprises.
"The banks were forced - literally forced - to make mortgage loans to a lot of people that in the past they hadn't made them to, because (the people) couldn't afford them," Kyl said in a teleconference with Arizona reporters.
"But they were deemed to be red-lining, to be discriminating against people who need to share in the American dream of home ownership. Well, it's a great dream, and we want as many people to share in it as possible, but not if they can't afford it," he said.
Loans to marginal lenders became troubled. Fannie Mae and Freddie Mac took care of the loans by bundling them and selling them to other financial institutions.
Kyl said he helped draft bills in 2003 and 2004 intended to tighten regulation of Fannie and Freddie in an effort to forestall a potential multibillion-dollar bailout.
"Several pieces of legislation were offered up. I could be partisan and tell you who they were offered by and who stopped them, but I won't. The bottom line was that the prediction, unfortunately, came true," he said.
The time has come for Fannie and Freddie to be cast off, he said.
QUESTIONS FOR DEBATE
The Tribune is staging something of an interactive debate for the 5th Congressional District candidates on Friday.
The newspaper's editors are soliciting questions from voters.
Voters who would like to submit questions for Democratic incumbent Harry Mitchell and Republican challenger David Schweikert are asked to contact Tribune senior opinion writer Le Templar at email@example.com or (480) 898-6474.
The hourlong debate is set for 2 p.m. Friday at the Mesa Country Club, 660 W. Fairview Ave., near Country Club Drive and Brown Road in Mesa.
Libertarian candidate Warren Severin also has been invited to attend.
The 5th District takes in Scottsdale, Tempe, Fountain Hills, Ahwatukee Foothills and west Mesa.
The forum will be free and open for the public and other media to attend.
Several local Hispanic political leaders, speaking at a news conference in downtown Phoenix on Tuesday, urged Hispanic voters to support presidential candidate Barack Obama on Election Day.
Phoenix City Councilman Michael Nowakowski said Hispanics already are motivated to vote this year because of kitchen-table issues such as education and housing availability.
However, Hispanics historically have had low voter turnout numbers.
Among eligible adults, Hispanics trail both whites and blacks on a per capita basis in casting ballots, according to the U.S. Census Bureau. Furthermore, while the percentage of whites and blacks who voted increased from 2000 to 2004, the percentage of Hispanics remained flat.
Nowakowski said Hispanics have extra incentive this year. Specifically, the debate on immigration reform has charged up Hispanics in Arizona and elsewhere.
"You have had so many people attacking the Latino community, they have now awakened the sleeping giant. I think it's about time someone kicked us in the (expletive) and woke us up and made us get out there," said Nowakowski, who's half Hispanic.
In Arizona, 14 different Hispanic organizations have set out to register 50,000 new voters for the November election. Most of those people registered as Democrats, he said.