Last week I authored the "Responsible Investment Policy" that calls upon the City Manager and City Treasurer to provide a report concerning the soundness of the city's millions in investments in Bank America, Freddie Mac and Fannie Mae. It also calls upon the City Manager to send a letter expressing the concern of the City Council that many of our residents are in foreclosure and have not been able to work with lenders to modify their mortgages so they can stay in their homes. I also included a provision that the City encourage Bank America to make small business loans available so that our local economy can grow and create more jobs.
The item was approved on a 7-1 vote (DeLong opposing; Garcia absent). Mr. DeLong railed against the proposal and claimed that the City had been assured that the investments are sound by the rating agencies. Unfortunately, rating agencies also assured the City of Long Beach (even while newspaper articles warned of problems) about Lehman Brothers and the City lost millions of dollars.
I authored this item because one out of 243 homes in California are in foreclosure and these three financial entities hold more than 50 percent of all mortgages. Additionally, all three financial entities are under investigations at state and federal levels.
Just last week the California Attorney General Kamala Harris announced her investigations.
This morning on the front page of the newspaper, it was announced that the Securities and Exchange Commission (SEC) is pursuing actions against the executives of Freddie Mac and Fannie Mae.
If the City Council won't stand up to make sure our investments are not only sound but that are placed with institutions that are not harming our residents and taxpayers, then we should be ashamed.
DeLong demeaned the effort stating our investments are miniscule compared to the overall amounts invested nationally in these entities. Really?
If you really believe this, then why do you have us spend so much time on the council passing resolutions on federal legislation when we are just one city out of thousands of cities in the US?
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Saturday, December 17, 2011
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