Just received the following statement from Senator Saxby Chambliss:
Chambliss Addresses Concerns with Financial Regulatory Reform Legislation
“To leave Freddie Mac and Fannie Mae out of any additional regulations is a mistake.”
WASHINGTON – U.S. Sen. Saxby Chambliss, R-Ga., addressed his concerns with the financial regulatory reform bill on the Senate floor today. The following are excerpts of his floor speech:
“…There are some provisions in the bill that I have particular objection to, and there are some things that are not in the bill that I think should be in the bill. For example, one of the major causes of the problem – and I think it goes without saying – is the fact that the GSE’s – Fannie Mae and Freddie Mac – have been authorized over the years to purchase mortgages from individuals who simply couldn’t make their payments, and those mortgages have been bundled up together and have been sold on the market and have been one of the root causes, in my opinion, of the problem.
“And I’m not alone in thinking that. Other individuals, but more importantly, people who know a lot more about the root cause of the problem than anybody in this body agree that that is a major issue that has to be addressed in any overall financial reform. And to leave any reference to Freddie Mac and Fannie Mae out of any additional regulation is a mistake. There are going to be amendments with respect to that, and I look forward to the debate on that.
“Another issue is that there are no mortgage standards that are specifically set forth in the underlying bill. I can remember very well going in and buying my first house, and making an application for a mortgage. Even though my payment was going to be fairly minimal to the amount of money I was making, I had to pay 20 percent down. It took me a couple of weeks to be approved by individuals in my hometown whom I knew very well. At the end of the day, they just wanted to make sure I was going to be able to pay that loan back. Not that we need to go all the way in that direction, but certainly we need standards in place that are going to ensure that people who are buying houses can afford to make the mortgage payments they are applying for.
“With respect to the Consumer Financial Protection Act, it appears that the underlying bill will require the inclusion of more non-problem areas of the consumer finance industry than are really in any way potentially a part of any future financial meltdown.
“So I hope that as we debate these amendments – and I know we’ll have a very spirited debate on them – we can come to some agreement as to what’s reasonable. Let’s do what we need to do to provide our regulatory agencies with the additional oversight they need to make sure that we put them in a position and give them the tools not to allow the situation that occurred in 2007, 2008, and 2009 to recur, but that we don’t go too far to where we overreach and exercise more control on the part of the regulators than what is absolutely necessary…”
To watch Sen. Chambliss’ speech in its entirety, click here.