AIG Still Lobbying for Lax Regulations
A month ago, at the advent of the global economic crisis, the federal government loaned the nation’s largest insurer, AIG, $120 billion to keep it from collapsing, effectively giving the U.S. taxpayer an 80% equity stake in the company. Questions have been thrown around about whether or not the company will continue its lobbying practice despite being 80% owned by the government. Yesterday, ProPublica reported that AIG will continue to lobby. Today, the Wall Street Journal reports that the lobbying will be aimed at reducing regulations and easing oversight of mortgage lenders:
AIG is currently working to ease some provisions in a new federal law establishing strict oversight of mortgage originators, according to state regulators. The law requires that originators be licensed by the states, and that they supply comprehensive information so state regulators can track their activities.
The goal of the new rules is to hold originators accountable if they engage in the sorts of improper or fraudulent lending that ultimately contributed to AIG’s downfall. The law was passed by Congress in July as part of a sweeping housing-industry rescue package.
In the second quarter lobbying filings of 2008, AIG spent $3 million, much of that to block these efforts at oversight. Overall, this year AIG spent $6.7 million on lobbying expenses.
It seems absolutely inappropriate for a company kept alive by the federal government to continue to influence lawmakers and executive branch employees, especially as it concerns oversight that appears intended to stop the type of abusive behaviors that led not only to the near collapse of AIG itself, but to the global economic crisis.