rssGeithner: ‘Very Substantial’ Consumer Protection Changes Needed in Finance Sector
Tuesday, April 21, 2009 at 1:18 pm
- 7 Comments
Treasury Secretary Tim Geithner appeared on Capitol Hill this morning, testifying for the first time before the congressional oversight panel created to monitor the Wall Street rescue plan. He didn’t have an easy time of things, getting grilled from the panel’s liberals and conservatives alike over things like rising foreclosures and the shift in government bank holdings from preferred stock, which pays interest, to common stock, which doesn’t.
Yet not much news emerged from the sometimes testy discussion. Geithner reiterated the administration’s hope to create a regulator to oversee non-bank institutions like investment firms, much like the Federal Deposit Insurance Corporation currently regulates traditional banks. He also denied the charge that the automakers have been forced to make greater concessions than the finance sector in return for federal help, pointing out that both Freddie Mac and Fannie Mae have seen shifts in management.
Of note, Geithner — himself a creature of Wall Street — conceded that there aren’t nearly enough consumer protections in the credit card, mortgage and other financial products markets, adding that in coming weeks, the administration plans to propose a series of consumer-friendly reforms on all fronts.
“We had systematic failures in consumer protection,” he said. “It’s going to require very substantial changes to fix that.”
Pressed by Elizabeth Warren, the Harvard University law professor who heads the oversight panel, Geithner also reiterated the administration’s support for legislation empowering struggling homeowners to file bankruptcy to prevent foreclosure — an avenue that’s currently prohibited.
The House earlier this year passed legislation allowing bankruptcy judges to reduce — or cramdown — the principal balance and interest rates of mortgage loans to help prevent foreclosures, which are on the rise. But the bill has stalled in the Senate in the face of opposition from most banks.
President Obama has said the cramdown bill is a vital element of the White House foreclosure prevention strategy, providing a legal stick to accompany newly installed financial incentives encouraging the banks to modify mortgages voluntarily.
Asked by Warren if the cramdown bill is “essential,” Geithner offered tepid support for the proposal, conceding that the White House plan alone “is not going to solve all these problems.”
“It’s a difficult balance to get right,” he said.
7 Comments
Comment posted April 21, 2009 @ 11:12 am
The Wall Street special interests (banks,holding cos.,hedge funds,etc.) that received TARP and Stimulas funds are not interested in the home loan modification program.They took taxpayer funds with their left hand (and got healthy) and now they are foreclosing on homeowners ( @ 50 cents on the dollar or less) with the right hand.Most taxpayers don't realize that it was taxpayer money that is allowing these institutions to keep the foreclosures going. Wall Street owned politicians (tell me why Kyl from Arizona receives so much $$ from Wall Street and real estate ) keep the game going.Prop up the banks at the taxpayer / homeowners expense and keep taking their homes.They will re sell them later at a profit (through one of their affiliate cos. or through some other friendly entity). Wall Street and the politicians are KILLING main street and they are keeping the economy in the toilet. Vote them all out next time
Pingback posted April 21, 2009 @ 1:38 pm
[...] News Sources wrote an interesting post today onHere’s a quick excerptTreasury Secretary Tim Geithner appeared on Capitol Hill this morning, testifying for the first time before the congressional oversight panel created to monitor the Wall Street rescue plan. He didn’t have an easy time of things, getting grilled from the panel’s liberals and conservatives alike over things like rising foreclosures and the shift in government bank holdings from preferred stock, which pays interest, to common stock, which doesn’t. Yet not much news emerged from the sometimes [...]
Comment posted April 21, 2009 @ 1:23 pm
Gaithner's standard answer was that one should compare the administration.'s responses to the other alternate actions available.. He did not answer too many questions directly. It was at times difficult to comprehend what point he was making. I hope he knows what he is doing although the banks appear to have rejected his toxic removable plan.
Pingback posted April 21, 2009 @ 2:29 pm
[...] Government, Obama administration at 11:29 am by LeisureGuy This is a heartening development. Mike Lillis of the Washington Independent: Treasury Secretary Tim Geithner appeared on Capitol Hill this morning, testifying for the first [...]
Comment posted April 22, 2009 @ 7:36 am
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Comment posted April 24, 2009 @ 1:32 am
It is estimated that Obama's plan could benefit 8 to 9 million homeowners from the new modification procedures. So how do you know you qualify for the Mortgage Modification? Check the website http://obamamortgage2009.blogspot.com/
to see if you qualify. I was also in trouble and I am glad I did check it before I talk to my mortgage company and it helped – John Mayer, California
Comment posted April 24, 2009 @ 8:32 am
It is estimated that Obama's plan could benefit 8 to 9 million homeowners from the new modification procedures. So how do you know you qualify for the Mortgage Modification? Check the website http://obamamortgage2009.blogspot.com/
to see if you qualify. I was also in trouble and I am glad I did check it before I talk to my mortgage company and it helped – John Mayer, California
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