hedgehog
Mentor
By Associated Press
WASHINGTON (AP) - A key House lawmaker on Wednesday threatened to strip the Federal Reserve of its authority to write rules against abuses in the market for high-risk mortgages if the central bank did not act quickly to do so.
The remarks by Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, intensified the pressure from congressional Democrats on the Fed in recent months as mortgage delinquencies and foreclosures have surged.
If the Fed doesn't exercise its authority soon as the sole federal agency entitled to write regulations prohibiting unfair and deceptive mortgage practices, "then we'll find someone else who will," Frank said at a committee hearing.
That could mean a potential transfer of authority to another federal bank regulatory agency such as the Federal Deposit Insurance Corp. or the Treasury Department's Office of the Comptroller of the Currency. The Fed, among the U.S. agencies, has the broadest power to impose restrictions on mortgage lending practices.
"I just want to put you on notice," Frank told Fed Governor Randall Kroszner, who testified before the panel. "I think that the absence of rules is a serious problem that has to be dealt with."
Kroszner said the central bank is looking closely at the issue, recognizing that "any rule should be drawn sharply" to avoid choking off access to credit that lets less affluent people become homeowners.
The Fed is holding a daylong open meeting on the issue Thursday at which representatives from the mortgage industry, consumer advocates, state regulators and academics are presenting their views.
The recent foreclosure wave has gripped homeowners with tarnished credit or low incomes who took out high-priced home loans, known as subprime mortgages, during the housing boom that has turned into a slump.
Nearly 2 million adjustable-rate mortgages are resetting to higher rates this year and next, setting up a potential new wave of foreclosures that has put policymakers on edge.
Fed officials say the agency already has used its authority under a 1994 law three times in recent years to prevent specific abusive mortgage practices.
I just love the "tough talk" exhibited by Rep. Barney Frank (chairman of the House Financial Services Committee) regarding the federal reserve. He threatens to strip the federal reserve of its authority to write regulations on unfair and deceptive mortgage practices. These guys must think we are stupid and don't realize the gig is up. This is a pre-emptive statement made by Mr. Frank for what its about to come. The ticking time bomb in house foreclosures is about to accelerate with a ton of sub prime resets occuring from June 2007 all the way into 2008. This is a feeble attempt to try and appease the american people that our government is watching out for us and "cracking down" on the fed and their careless, loose money policies. If Mr Frank wants to really get tough on the fed perhaps he should introduce legislation to repeal the federal reserve act, but we know that will never happen, because Mr. Frank is in bed with these guys. I also like how Mr. Frank runs cover for his masters by refering to the Fed as a federal agency, more smoke and mirrors to fool the people. Edited by: KJV1
WASHINGTON (AP) - A key House lawmaker on Wednesday threatened to strip the Federal Reserve of its authority to write rules against abuses in the market for high-risk mortgages if the central bank did not act quickly to do so.
The remarks by Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, intensified the pressure from congressional Democrats on the Fed in recent months as mortgage delinquencies and foreclosures have surged.
If the Fed doesn't exercise its authority soon as the sole federal agency entitled to write regulations prohibiting unfair and deceptive mortgage practices, "then we'll find someone else who will," Frank said at a committee hearing.
That could mean a potential transfer of authority to another federal bank regulatory agency such as the Federal Deposit Insurance Corp. or the Treasury Department's Office of the Comptroller of the Currency. The Fed, among the U.S. agencies, has the broadest power to impose restrictions on mortgage lending practices.
"I just want to put you on notice," Frank told Fed Governor Randall Kroszner, who testified before the panel. "I think that the absence of rules is a serious problem that has to be dealt with."
Kroszner said the central bank is looking closely at the issue, recognizing that "any rule should be drawn sharply" to avoid choking off access to credit that lets less affluent people become homeowners.
The Fed is holding a daylong open meeting on the issue Thursday at which representatives from the mortgage industry, consumer advocates, state regulators and academics are presenting their views.
The recent foreclosure wave has gripped homeowners with tarnished credit or low incomes who took out high-priced home loans, known as subprime mortgages, during the housing boom that has turned into a slump.
Nearly 2 million adjustable-rate mortgages are resetting to higher rates this year and next, setting up a potential new wave of foreclosures that has put policymakers on edge.
Fed officials say the agency already has used its authority under a 1994 law three times in recent years to prevent specific abusive mortgage practices.
I just love the "tough talk" exhibited by Rep. Barney Frank (chairman of the House Financial Services Committee) regarding the federal reserve. He threatens to strip the federal reserve of its authority to write regulations on unfair and deceptive mortgage practices. These guys must think we are stupid and don't realize the gig is up. This is a pre-emptive statement made by Mr. Frank for what its about to come. The ticking time bomb in house foreclosures is about to accelerate with a ton of sub prime resets occuring from June 2007 all the way into 2008. This is a feeble attempt to try and appease the american people that our government is watching out for us and "cracking down" on the fed and their careless, loose money policies. If Mr Frank wants to really get tough on the fed perhaps he should introduce legislation to repeal the federal reserve act, but we know that will never happen, because Mr. Frank is in bed with these guys. I also like how Mr. Frank runs cover for his masters by refering to the Fed as a federal agency, more smoke and mirrors to fool the people. Edited by: KJV1
