No, the grilling of federal banking regulators by members of Congress November 14 and 29th over their proposed rules for overseeing insurance companies which operate savings and loans were not scenes from an Oliver Stone movie but a consequence of political amnesia.

Oliver Stone, you will recall, was the movie director cited by a federal district court judge earlier this month in his opinion throwing out a lawsuit filed by Maurice “Hank” Greenberg and his Starr International.

The lawsuit alleged that the Federal Reserve takeover of AIG in September of 2008 was a conspiracy by the Fed to take control of the company to benefit others.

“Starr’s amended complaint paints a portrait of government treachery worthy of an Oliver Stone movie,” the judge said.

Instead, the judge said, “Specifically, based on Starr’s own allegations, AIG, as of mid-September 2008, was in dire straits, whether as a result of its own business decisions, the unraveling state of the financial system, the lack of available liquidity, or a perfect storm of these and other factors, and was actively considering bankruptcy.”

And, the judge added, “Far from describing actual control of AIG by an outside party, these allegations describe a moment of corporate desperation, in which AIG’s board grabbed the sole lifeline extended to the company.”

The hearings before the Senate Banking Committee and a subcommittee of the House Financial Services Committee focused on how unnecessary it was for community banks to be subject to such high capital standards going forward.

After all, only close to 600 have failed since 2008 and the Treasury has had to sell off at a loss preferred stock in dozens more as it seeks to close the books on the TARP-era.

But, members of the House and Senate at the hearing used the occasion to tell the Federal Reserve Board it should reexamine, in light of current state regulation, its proposal on the metrics to be used in becoming the consolidated federal regulator of insurance companies with thrifts.

And, also on hand to plead the insurers’ case at the House hearing was Kevin McCarty, president of the NAIC and Florida insurance commissioner, as well as representatives of State Farm and TIAA-Cref.

What was missing, however, was the history.

Officials of the NAIC testified before Congress in 2009 and 2010 that the source of AIG’s problems were actions by its Financial Products unit (AIGFP), which NAIC officials opined was regulated by the Office of Thrift Supervision (OTS) as consolidated regulator of AIG.

And, AIG was in deep trouble. AIGFP had sold guarantees on $2.77 trillion worth of securities backed by mortgage-backed securities, and owners of those securities kept coming back to AIG for cash as its credit rating dropped.

According to an examination commissioned by the Pennsylvania Insurance Dept., the obligations of AIGFP were cross-guaranteed by the life and property and casualty insurance affiliates of AIG

The situation was so dire, according to the Government Accountability Office, that the Fed sometime in 2009 seriously considered buying the life insurance subsidiaries of AIG in order to protect policyholders.

As a result, OTS was shut down under the Dodd-Frank, and its authority as consolidated regulator of financial institutions was shifted to the Fed. Indeed, an amendment to Dodd-Frank by Sen. Susan Collins, R-Maine, specifically mandated consolidated regulation of financial institutions with thrifts by the Fed.

Now, however, even Collins is backing off from her own amendment, calling for special oversight of thrifts owned by insurers.

Adding to the issue, the Fed was barred by a provision of the Gramm-Leach-Bliley Act crafted by Rep. Jeb Hensarling, R-Texas, incoming chairman of the committee at the request of his boss, Sen. Phil Gramm, R-Texas, from regulating insurance holding companies.

That meant that the Fed had no in-house expertise on insurance when it was forced to provide $182 billion in cash to keep the company afloat in 2008 and 2009.

Under these circumstances, it is perhaps wise to cite the sign that greeted everyone visiting the House Energy and Commerce Committee offices when Rep. John Dingell, D-Mich., reigned.

The sign said: Those who do not remember the past are condemned to repeat it.