Fannie Mae, Freddie Mac, and the Freedman’s Savings Bank

The experiences of Fannie Mae and Freddie Mac during and prior to the Financial Crisis of 2007–09 call to mind the history of the Freedman’s Savings and Trust Company, a prominent bank founded for the benefit of former slaves just after the Civil War. This paper notes similarities concerning the initial motivation for the creation of all three institutions and draws parallels between their mismanagement and subsequent failures. The paper also discusses the government’s response to the institutions’ downfalls and the legacies that the institutions left behind.