Chairman Hensarling: Real Solution to Financial Crisis Requires Sustainable Housing Finance Reform
September 16, 2013 -
Financial Services Committee Chairman Jeb Hensarling (R-TX) released the following statement today about President Obama’s speech and the Administration report marking the fifth anniversary of the financial crisis:
“It looks like the White House is putting more effort into convincing Americans they’ve solved the financial crisis than into actually solving the cause of the crisis. The crisis resulted largely from misguided Washington policies that either strong-armed or enticed financial institutions into loaning money to people to buy homes they sadly couldn’t afford to keep. But in typical fashion, Washington responded by passing a 2,300-page bill that did not solve the crisis but, in many ways, made it worse. The Dodd-Frank Act failed to reform Fannie and Freddie, it enshrined bailouts and ‘too big to fail’ into law, and it added hundreds more burdensome rules on our economy that are so confusing even the regulators can’t figure them out.
“No one in Washington can truly say they’ve addressed the financial crisis until a sustainable housing finance reform plan has been passed and signed into law. Given the magnitude of the crisis and the pain it caused millions, the President’s lack of serious attention to housing finance reform has set the stage for the next crisis as taxpayers today are on the hook for more than $5 trillion in mortgage guarantees. Our committee recently approved legislation that creates a sustainable housing finance system by limiting government control, putting private capital at the center of the mortgage system, and giving homebuyers more informed choices about their mortgage options. The five-year anniversary of the crisis represents the perfect opportunity for the President to join us in this effort.”
The Financial Services Committee approved sustainable housing finance reform legislation – H.R. 2767, the Protecting American Taxpayers and Homeowners Act – on July 24. The PATH Act:
- ends the nearly $200 billion bailout of Fannie Mae and Freddie Mac and gradually phases out the troubled Government-Sponsored Enterprises;
- increases competition by ending the federal government’s domination of the housing finance market;
- protects and sustains the 30-year fixed-rate mortgage; and
- gives consumers more choices in determining which mortgage product best suits their needs.