April 15, 2016
An expert in banking corruption and finance has joined the Bernie Sanders campaign. William K. Black, an associate professor at the University of Missouri-KC, is Bernie Sanders’ new economic advisor. Black was one of the central figures in exposing and prosecuting corruption in the savings and loan crisis from the late 1980s and mid-1990s. His addition to the Sanders campaign brings important knowledge in laws pertaining to finance and banking.
The savings and loan banking crisis resulted from a multitude of causes, one of which were two laws that helped deregulate them. The Depository Institutions Deregulation and Monetary Control Act of 1980 was signed into law by President Jimmy Carter. That law allowed credit unions and savings and loans to offer checking deposits, and to charge any loan interest rate they chose.
In 1982, Ronald Reagan furthered the deregulation of savings and loans by signing the Garn-St. Germain Depository Institutions Act, which allowed property owners to put real estate into trust accounts to avoid future lawsuits or creditors. Both bills reduced regulatory oversight and by the time the crisis was in full swing in 1995, 1,043 out of 3,234 savings and loan associations had failed due to risky and illegal behavior.
Among others, Black exposed the Keating Five, a group of five senators involved in doing favors for savings and loans in exchange for contributions. Charles Keating, the chairman of Lincoln Savings & Loan was deeply involved. Sen. John McCain was one of those senators Black exposed. He, along with the rest of the senators, was reprimanded but otherwise unpunished.
Black’s tenacity in investigating the banking corruption angered so Keating, he wrote a memo ordering his death.
“…get Black — kill him dead. If you can’t you ought to retire.”