(H.R. 4173) On the Frank of Massachusetts amendment that provided several billion dollars to stem the ongoing wave of mortgage foreclosures, gave consumers the same access to their credit scores as lenders, and made other changes designed to curtail abuses in the financial system
This was a vote on an amendment offered by Rep. Frank (D-MA) to H.R. 4173, a major financial reform bill which implemented the most significant changes in the regulation of the financial industry since The Great Depression. H.R.4173 had been developed in response to the severe problems in the finance and banking industries that had contributed to the severe economic downturn the country was experiencing.
The amendment, among other things, provided $4 billion for foreclosure relief programs, $3 billion in low-interest loans to unemployed homeowners having difficulty making their mortgage payments, and $1 billion in grants to states for the purchase and redevelopment of foreclosed and abandoned residential properties. It also contained language designed to guarantee consumers the same access to their credit scores as lenders; tightened standards on bankers who extended credit to less than “prime” borrowers; and permitted the FDIC to disregard the pledging of collateral by failed financial institutions shortly before their insolvency.
Rep. Waters (D-CA) supported the amendment. She noted that the Black Caucus, of which she is a member, had requested that the $3 billion in low-interest loans for unemployed homeowners be included in the amendment. She said those funds are needed because “foreclosures and unemployment present a systemic risk to our economy” and “our current foreclosure prevention programs address the initial cause of our foreclosure crisis, subprime and predatory lending, and not the current cause, unemployment . . . .” Waters went on to note that “Pennsylvania has run a very successful (similar) loan program that has saved 42,700 unemployed homeowners from foreclosure.”
Speaking in support of the language giving consumers the same access to their credit scores as lenders, Rep.Tsongas (D-MA) said “ it seems unthinkable to me that . . . consumers would be placed in the dark in regard to their creditworthiness''. She also said that the amendment “levels the playing field for consumers.”
Rep. Capito (R-WV) opposed the provision in the amendment providing $3 billion in low-interest loans to help unemployed homeowners. She said that “strapping an unemployed homeowner with more debt is not the answer. Congress needs to support policies that create jobs and not perpetuate any more bailouts.” Capito also opposed the provisions giving $1 billion in grants to states for the purchase and redevelopment of foreclosed and abandoned residential properties. She claimed that this “is a costly bailout for lenders and speculators. This program also could have the unintended consequences of making foreclosure a more attractive option for lenders, thereby compounding the problem.” Capito supported her claim that providing these additional funds was not going to do any good by referring to other recent emergency housing funds Congress had provided and noting that “not one dollar has made it through HUD's cumbersome bureaucracy.”
The amendment was approved by a vote of 240-182. Two hundred and thirty-nine Democrats and one Republican voted “aye”. One hundred and seventy-two Republicans and ten Democrats voted “nay”. As a result, language was added to the major financial reform bill providing several billion dollars to stem the ongoing wave of mortgage foreclosures, giving consumers the same access to their credit scores as lenders, and making other changes designed to curtail abuses in the financial system.