Banking and Financial Services

Crapo Johnson

In a growing state like Idaho, financial institutions play a vital role in the development of our local economy by facilitating capital formation processes that are so necessary for job creation.  Without available credit, companies cannot grow and consequently will not hire additional American workers.

As ranking member of the Senate Banking Committee, I will continue to push for reforms that modernize and rationalize the federal financial regulatory system to handle the challenges of the 21st century markets, while protecting consumers and taxpayers against the risks that caused our recent economic collapse.

Although I had been pushing for financial regulatory reform long before we had the credit crunch and the credit crisis, I voted against H.R. 4173, also known as the Dodd-Frank Act, in 2010 because it failed to address crucial elements of the crisis.  Furthermore, it restricted access to credit, discouraged capital formation, and once again created a large, new, expensive government bureaucracy, unreasonably extending the federal government’s control over the economy and hurting Main Street, not Wall Street.  

In the 112th Congress, I pushed for the regulators implementing the Dodd-Frank Act to perform meaningful cost-benefit analysis so that we can understand how these rules will affect the economy as a whole, interact with one other and impact our global competitiveness.  Ultimately, we need rules that are strong enough to protect our economy but that can adapt to changing market conditions to promote credit availability and spur job growth for millions of Americans.  You can view a summary of these actions on the Action on Banking and Financial Services Page.

We need to fix our nation’s broken housing finance system and reduce the government’s involvement in the housing market from current levels where the GSEs and FHA are guaranteeing about 95 percent of all new mortgages.  Massive failures in our mortgage underwriting and securitization system were at the heart of the 2008 crisis. The most expensive government bailouts were those of Fannie Mae and Freddie Mac – the largest housing lenders that purchased home loans, packaged them into investments and then guaranteed them against default.

In the 111th Congress, I offered an amendment that would have ended the unlimited bailouts of Fannie Mae and Freddie Mac and provided for a true accounting of the costs. Although my amendment received a majority of votes, it failed because the procedural vote needed 60 votes to pass. The main goals of GSE reform legislation should be to reestablish a housing finance market that has long-term stability in which private capital is the primary source of mortgage financing and the taxpayer is protected in the event of another housing collapse.

Multimedia

Treasury Secretary Timothy Geithner testifies before the Banking Committee on "The Financial Stability Oversight Council Annual Report to Congress." Senator Crapo questions the Secretary about concerns that Dodd-Frank proposed rules will reduce credit availability in the housing market, as well as the Secretary's position on whether non-financial end-users should be exempt from margin requirements.

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Last updated 04/11/2014