In 1982 the "Germain Act" deregulated the nations thrift industry. Anyone with a believable story, enough cash, and a "vision" could start doing all sorts of things with taxpayers insured deposits (1 ).
US Rep John D. Dingell said about bank deregulation "Banking deregulation has enriched scoundrels and knaves and created an ongoing scandal that could fill the jail houses," (2 ).
In the early 1990s the S and L scandal was projected to cost over 180 billion or more (3 ). The final cost was revealed in a press story in 2002 said the S and L scandal cost the American taxpayer about 400 billion gave or take a million (4 ).
Part of the scandal was part of the S and L crisis. The Keating five were Senators (D) Dennis DeConcini Arizona, (D) Alan Cranston California (D), (D)John Glenn Ohio, (D) Donald Riegle Michigan, and (R) John McCain Arizona. The reason they are called the Keating five is because of Charles Keating, Jr. of Lincoln Savings and Loan in California. Keating in 1984 started S and L shifting its assets into more high risk investments violating numerous state and federal laws in 1989 the S and L collapsed. An investigation ensued
On April 2, 1987 the five met in DeConcini's office. They asked Edwin Gray, the head of the three-member bank board that regulated the industry. The five asked why the investigation of their "friend" was taking so long. Gray said he felt this meeting was a show of force. The Senators again asked regulators to back off when the regulators said they were about to make a "criminal referral" (6 ).
A committee investigation into the Keating five matter found
ALAN CRANSTON, Cranston had "engaged in an impermissible pattern of conduct in which fundraising and official activities were substantially linked." And the senator "was soliciting and accepting substantial contributions from Mr. Keating."
DONALD W. RIEGLE JR "The committee has concluded ... that Sen. Riegle's conduct gave the appearance of being improper and was certainly attended with insensitivity and poor judgment."
DENNIS DeCONCINI, The committee said his "aggressive conduct" with the regulators "was inappropriate." And "The committee has concluded that the totality of the evidence shows that Sen. DeConcini's conduct gave the appearance of being improper and was certainly attended with insensitivity and poor judgment."
JOHN GLENN "exercised poor judgment" when he arranged a meeting between Keating and then-House Speaker Jim Wright in January 1988
JOHN MCCAIN "exercised poor judgment in intervening with the regulators," the committee said. But his actions "were not improper nor attended with gross negligence."(7 ).