Begich Joins Alaska Groups in Support of Wall Street Reform
Protections for Homeowners Nearing Final Passage in Congress
Legislation to reform Wall Street which recently passed the Senate cracks down on reckless abuses by mega-banks while protecting consumers and smaller community financial institutions, U.S. Sen. Mark Begich said today at a news conference joined by consumer advocacy organizations.
Begich said the Wall Street reform bill protects taxpayers from deceptive practices, such as capping credit card interest rates, gives citizens access to their credit scores and prevents lenders from trapping consumers with misleading fine print.
"Americans should be in the driver's seat when it comes to their credit and personal finances," Begich said. "Reckless practices by the big East Coast banks helped send America's economy into one of the worst recessions ever, and this legislation will prevent those abuses in the future."
The senator was joined by representatives of the Consumer Credit Counseling Services of Alaska (CCCS Alaska), the Alaska Legal Service Corporation, the Rural Housing and Planning Division of the Rural Alaska Community Action program, AARP Alaska, and consumers Jennifer and Patrick Michael McConnaughey of Eagle River.
The organizations provide assistance to homeowners and consumers struggling to stay in their homes during an economic crisis brought on by the practices of Wall Street and big banks. Their work has proven invaluable to hundreds of Alaskans.
CCCS Alaska Development Director Jan Jones said: "We still have an inability to determine who the investor is behind the loan at the lender of servicing. I, as a housing counselor, see no reason why this is the case. CCCS Alaska is hopeful that the recent changes in some of the regulations to the HAM program will help make a difference."
"This legislation increases the transparency of what loan you are going to get and it increases documentation for banks to ensure there is not predatory lending," said Sen. Begich. "It clearly sends a message to big banks that deceptive practices are not acceptable and that Alaskans will have the upper hand for the first time when it comes to their financial well-being."
Some of the key measures passed as part of the bill include:
• Audit of the Federal Reserve - A one-time audit by the Government Accountability Office of all emergency activities of the Fed since 2007. The Fed, which distributed more than $2 trillion in loans during the financial crisis, has not been subject to an audit in its 95-year history.
• Rural/Community Bank Protection - Smaller, community banks will be protected from paying more than their fair share for federal bank insurance. It changes the way the Federal Deposit Insurance Corporation (FDIC) calculates premiums paid by banks into the fund. Under the new system, banks would pay based on total assets rather than deposits, protecting smaller community banks and credit unions like many in Alaska.
• Homeowner Protection - Prohibits mortgage lenders and loan originators from getting hidden payments when they steer homeowners into high-cost loans. Also creates strong underwriting standards to ensure borrowers have the ability to pay loans back.
• Pay it Back Act - Requires all repaid TARP funds and all unobligated stimulus funds be used to pay down the deficit.
• Consumer Protection Division - Creates a new consumer protection division within the Federal Reserve charged with writing and enforcing new rules targeting abusive practices in businesses such as mortgage lending and credit-card issuance
• Protecting Taxpayers from Bailouts - In extreme cases the government will have the ability to seize and liquidate a failing financial institution without putting taxpayers on the hook.
Wall Street reform legislation passed the Senate May 20 and is currently in conference committee with the House where differences between the two bills are being resolves. After final approval by Congress, the legislation goes to President Obama for signature.