Real Reform Must Protect Consumers, Strengthen Oversight and Reform Fannie/Freddie

July 23, 2009

WASHINGTON. D.C. – House Committee on Oversight and Government Reform Ranking Member Darrell Issa (R-CA) joined with Reps. Spencer Baucus (Ala.), House Minority Leader John Boehner (Ohio), Lamar Smith (Texas), Trent Franks (Ariz.), Randy Neugebauer (Texas), Scott Garrett (N.J.), Jeb Hensarling (Texas) and Tom Price (Ga.) to introduce comprehensive legislation that would overhaul and comprehensively reform the financial regulatory system.

The Consumer Protection and Regulatory Enhancement Act includes provisions to strengthen the bankruptcy code, improve oversight of financial institutions and the Federal Reserve, improve consumer protection regulations and reform Government Sponsored Enterprises (GSE) that helped create a mortgage tsunami that wrought devastation on the American people and economy.

“Throughout this entire crisis, taxpayers have been on the hook for significant risk without any increased protections or transparency from the federal government,” Issa said. “The Obama Administration has yet to learn that ignoring the role of politics and government in causing the housing crisis and the economic collapse while pursing other regulatory reforms will not fix the underlying problem. Current mortgage lending criteria is unsustainable and the Republican proposal seeks to forge a new path that helps all Americans escape crushing debt and return our economy to solvency.”

The Republican plan presents a clear alternative to the “too big to fail” government policy that many economists and market analysts believe would be institutionalized by the Obama Administration’s regulatory reform agenda. The legislation ends the unprecedented government interventions and use of taxpayer dollars to bail out financial firms and pick winners and losers in the economy. Taxpayers will no longer be asked to pick up the tab for bad bets on Wall Street while some creditors and counterparties of failed firms are made whole. The legislation seeks to restore market discipline so that financial firms will no longer expect the government to rescue them from the consequences of imprudent business decisions.

Click here to view a copy of the legislation and here for a section by section summary.

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