Issues
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Financial and Mortgage Market Reform On December 11, 2009, the House passed the Wall Street Reform and Consumer Protection Act (H.R. 4173). As you may know, this legislation aims to respond to the financial crisis of last year by reforming lending practices, implementing new consumer protections, and regulating derivatives. Specifically, H.R. 4173 would create a permanent $150 billion fund to sustain the temporary bailouts enacted last year, paid for by an assessment on large financial institutions. In addition, the bill would create a Consumer Financial Protection Agency to regulate all financial products, including loans, credit or repayment plans. Conceptually, I support efforts to implement laws to protect American taxpayers from the financial collapse that continues to plague our economy. That said, unfortunately, the measure put forth by the Democratic leadership goes far beyond these parameters and, in my opinion, creates too much government intervention in our free market society. I opposed passage of H.R. 4173 because it will restrict access to credit, cripple small businesses, and overwhelm federal regulators. Further, I oppose efforts to make the temporary bailout policies enacted last year permanent via the new Consumer Financial Protection Agency. It is my hope that as the bill moves forward that Congress will enact balanced policies that protect consumers and facilitate safe and reliable lending. In addition to financial regulatory reform, we still face significant problems in the mortgage markets that continue to harm the overall economy. While the federal government and the Federal Reserve stepped in to ensure that banks remained solvent, mortgage lending has continued to decline as banks tighten underwriting standards. This has created financial hardship for numerous individuals and businesses. In my opinion, the federal government is cognizant of the importance of the mortgage industry and seeks to ensure that it remains viable. That said, I am also sympathetic to the arguments of those who feel that government should not meddle in private markets or reward those who made poor financial decisions. A major cause of the stress in the mortgage markets was caused by the lax lending standards of government-backed lenders Fannie Mae and Freddie Mac, and notably, the Wall Street Reform and Consumer Protection Act remains silent regarding reform of these institutions. |