The Virus Shall Cure the Illness

Sunday, March 25, 2007
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Good stuff on Bloomberg.com.

Congressional Hearings May Presage Tighter Subprime Regulation

By Alison Vekshin

March 22 (Bloomberg) — U.S. lawmakers may expand the federal government’s role in overseeing mortgage lending as Congress looks for ways to protect borrowers at risk of losing their homes with the implosion of the subprime market.

U.S. Representative Carolyn Maloney said Congress should broaden proposed federal subprime-lending guidelines to cover state-regulated lenders and make them mandatory. And Senate Banking Committee Chairman Christopher Dodd will question federal bank regulators at a hearing today over what he called a “pattern of neglect” that triggered the subprime crisis.

“What is important now is for those who are in a position of power to help protect homeowners and stabilize the system,” said Maloney, a New York Democrat who heads a House Financial Services subcommittee on financial institutions and consumer credit. Congress should “lessen collateral damage,” she said.

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As always, the people that create the problem (think Federal Reserve, monetary inflation, and the credit bubble) always consider themselves to be in a position to be able to solve the problem.

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