The House has completed action on measures relating to consumer protection and reforms to the U.S. financial system. That includes anti-predatory lending and mortgage fraud legislation that take the next step in rebuilding the economy.
Anti-Predatory Lending Approved by the House on May 7, 2009, the Mortgage Reform and Anti-Predatory Lending Act of 2009 will curb abusive and predatory lending—a major factor in the nation’s highest home foreclosure rate in 25 years. The bill would outlaw many of the egregious industry practices that marked the subprime lending boom and prevent borrowers from deliberately misstating their income to qualify for a loan.
The bill would:
ensure that mortgage lenders make loans that benefit the consumer and prohibit them from steering borrowers into higher cost loans;
establish a simple standard for all home loans: institutions must ensure that borrowers can repay the loans they are sold;
for mortgage refinancing, require that all loans provide a net tangible benefit to the consumer;
for the first time ever, make the secondary mortgage market responsible for complying with these standards when they buy loans and turn them into securities;
encourage the market to move back toward making fixed-rate, fully documented loans;
protect tenants who rent homes that go into foreclosure.
Fighting Mortgage Fraud The Fraud Enforcement and Recovery Act of 2009, which the House approved on May 6, 2009, provides critical funding and updated tools to help law enforcement pursue and prosecute the mortgage and corporate fraud that impacted millions of Americans and led to the worst financial crisis in decades.
In addition, it would establish an investigation like the Pecora commission that examined the causes of the Stock Market Crash of 1929. In 1932, the Senate authorized one of its committees to investigate the causes of the stock market crash of 1929. That congressional investigation uncovered fraudulent and other unscrupulous practices on Wall Street that undermined the financial system. The congressional investigation helped develop the regulatory structure that served us for decades.
Commission to examine U.S. financial system Congress this week is expected to vote on legislation to create an outside commission to investigate the causes of the current financial and economic crisis in the United States.
Reasons for a commission:
Get to the truth with a detailed and clear-eyed examination of what went wrong.
Bring accountability to a system where risky behavior has been rewarded.
Prevent this from happening again. In recent decades, our economy has suffered through several disastrous crises—the Savings & Loan debacle in the ‘80s, the ‘dot-com bubble’ in the ‘90s, and now the current mortgage crisis.
Approval of Credit Cardholders’ Bill of Rights The House has already passed a Credit Cardholders’ Bill of Rights that includes tough new protections for consumers facing excessive credit card fees, sky-high interest rates and unfair, incomprehensible agreements that credit card companies revise at will. This legislation restores fairness for average Americans and stands up for consumers who are struggling through this recession. The President is pushing the Senate to finish the job and send him this legislation.
