On October 22, U.S. Representative Barney Frank (D.-Mass.), chairman of the U.S. House Financial Services Committee, announced new details of his proposed bill, H.R. 3915, which
would make significant changes to the Truth in Lending Act and is designed to address what he claims are abusive lending practices responsible for the dramatic rise in mortgage foreclosures in some parts of the country. The bill calls for close federal supervision of mortgage brokers, who have become the predominant providers of sub-prime loans allegedly responsible for the foreclosure crisis.
In its current form, the bill’s express purpose is “to reform consumer mortgage practices and provide accountability for such practices, to establish licensing and registration requirements for residential mortgage originators, [and] to provide certain minimum standards for consumer mortgage loans... [among] other purposes.”
Representatives on both sides of the aisle have expressed the urgency and significance of the initiative. “Our goals should be to correct problems within the sub-prime market without choking off working Americans’ access to credit,” says Rep. Spencer Bacchus of Alabama, the senior Republican on the financial services panel, to the Los Angeles Times. “This is an important issue, and we need to get it right.”
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