Foong on Finance: Initial Look at Financial Regulatory Reform
- Jun 29, 2009
Last week, President Obama put forward his proposals to make changes to the regulatory oversight of the financial system.
Among the proposals, the “ Financial Regulatory Reform Plan”
would give the Federal Reserve and the Federal Deposit Insurance Corp.
additional controls over financial institutions. It would require hedge
funds and private equity funds to be registered with the Securities and
Exchange Commission. And it would consolidate the agencies that oversee
consumer debt banking into a regulator called the Consumer Financial
Where our industry is concerned, the plan would more tightly
control banks that issue mortgage-backed securities. And it would
require companies that issue mortgages to keep some of mortgages on
their books, so that they are more careful about the lending that they
From more of a citizen’s point of view, the reform plan has been criticized as not being real reform, just as advocates at this point are worried that healthcare reform is in danger of becoming.
But so far, from industries’ viewpoint, the Mortgage Bankers
Association (MBA) says that it welcomes the coming debate over the
regulation of the financial services industry.
“As the past several years have shown, oversight of financial firms
can and should be improved in order to better protect consumers and
make sure the troubles in the financial sector are not repeated,” says
John A. Courson, MBA’s president and CEO.
“[W]e will continue to argue for one preemptive set of mortgage
regulations throughout the country to replace the current patchwork of
state and local laws.”
MBA Chairman David G. Kittle, says that MBA supports the creation
of a new regulator for non-depository independent mortgage banks and
mortgage brokers, funded by the mortgage industry.
And that MBA will work with policymakers “on the idea that all
participants in the mortgage origination process should have a
financial interest in making sure a borrower has a sustainable mortgage
payment, without putting certain business models at a competitive at
At press time, MHN is still working to obtain from multi-housing
groups their thoughts on the financial regulatory reform proposals.
(Keat Foong is the executive editor of Multi-Housing News. She can be reached at firstname.lastname@example.org)