Congresswoman Maxine Waters Votes for Crackdown on Mortgage and Corporate Fraud
Congresswoman Maxine Waters (CA-35) voted today to drastically toughen the enforcement and prosecution of mortgage and corporate fraud. The House passed the Fraud Enforcement and Recovery Act, which will provide essential funding and tools to help law enforcement pursue and prosecute the type of fraud many blame for the worst financial crisis in decades.
Congresswoman Waters expressed her strong support for the legislation because it protects consumers, prevents mortgage and financial fraud schemes and holds those guilty of such schemes accountable through tough enforcement and prosecution.
"This bill strengthens and modernizes consumer protections for mortgage lending. The legislation specifically extends liability to those mortgage lending companies, their employees and agents who make false statements on mortgage applications," Congresswoman Waters said. "Most importantly, it authorizes $165 million in additional funds for enforcement of consumer protections, allowing agencies such as the FBI and Department of Justice to staff teams whose sole goal is preventing mortgage and financial fraud schemes."
Congresswoman Waters chaired a hearing earlier today of the Housing and Community Opportunity Subcommittee to hear from state and federal law enforcement officials about the growing problem of fraud against consumers seeking loan modifications or foreclosure rescue – and steps being taken to prevent such scams. The Financial Crimes Enforcement Network reported a 22 percent increase in suspicious activity reports involving mortgage fraud. The bill Congress passed today will help reduce such fraud.
The legislation will also establish a bipartisan commission to investigate the causes of the collapse of our financial system and the ensuing recession. The investigative commission will have subpoena power and will seek to bring accountability to a system where reckless behavior has gone unchecked in the past.
This commission is similar to the Pecora Commission, which was established to investigate the 1929 stock market crash and uncovered the fraudulent and unscrupulous practices on Wall Street that led to the Great Depression. Its work laid the groundwork for the regulatory structure that served this country for decades. In fact, the weakening of that regulatory framework created the conditions leading to our current economic crisis.
"It's clear that the regulations we have in place now are not working," explained Congresswoman Waters. "We need to understand what conditions led to this crisis as we move forward with commonsense reforms to prevent it from happening again in the future."
The Fraud Enforcement and Recovery Act is the latest in a series of consumer protection and financial reforms recently passed by the House. The House passed the Credit Cardholders' Bill of Rights last week, including tough new protections for consumers facing excessive credit card fees, sky-high interest rates and unfair agreements that credit card companies revise at will. Later this week, the House is expected to vote on the Mortgage Reform and Anti-Predatory Lending Act to curb abusive and predatory lending.
"This Congress is committed to protecting consumers, reforming our financial system and demanding accountability," said Congresswoman Waters. "We are doing everything possible to rebuild our economy in a way that's fair and consistent with our values."