New regulation hearings starting

Mortgage and Lending with Sierra Pacific Mortgage Loan Officer, NMLS 184479

We have been talking about the need for regulatory reform to address the causes of the global financial failures. The House Financial Services Committee, chaired by Representative Barney Frank (D-MA), will open hearings on "broad regulatory restructuring and reform for the financial markets" starting Tuesday, October 21.

I don't know if these hearings will make the headline news or not, but the impact of regulatory reform will be significant. The debate will likely be an top issue in the coming year, with the direct interest of the new President.

The question is framed this way: what is the "extent to which an outdated and weak regulatory system contributed to the current market turmoil and whether adoption of a stronger and more robust financial regulatory system could contribute to a more rapid recovery in the financial markets and the economy."

Are these the right questions?

Except for the word "outdated" I think these are the correct questions. The regulatory framework that brought about this collapse was created under the guise of modernizing the futures market and of modernizing the financial markets.

The hearings will look at risk valuation, the implications of federal lending, the role of regulation in restoring market confidence, the need for capital requirements, and the adequacy of existing regulatory structure.

This will be the start of an important discussion. We need an open, transparent discussion. We cannot allow the exchange to be cut off with stock cliches and political grandstanding by either party.

The discussion need to involve listening. I am just not certain that the politicians are capable.

Looking back on the passage of Gramm-Bliley-Leach, I read that it was passed because everyone agreed to add on additional Community Reinvestment Act provisions.

Like the ridiculous addons to the Housing and Economic Recovery Act in July and to the just passed Emergency Economic Stabilization Act, these bills must pass on their own. They are either good or bad, on their own.

They are not made good by adding on another bill. We end up with two or more bad laws. Most of these addons are done in back room negotiations at the last minute.

This removes transparency and preempts open discussion.

Some questions I have. Is it good for banks to consolidate and merge, concentrating power into large companies? Is it good to allow mixture of financial services - commercial, investment, deposit, brokerage, insurance? I am certain that unregulated markets are dangerous, especially those that allow unfunded and under capitalized guarantees to be sold as a cover for bad bonds.

The hearings start October 21.

Richard Smith
American Acceptance Mortgage, Inc
Toll Free 888-474-9920 Cell 423-280-0345
Home financing in Tennessee, Georgia, and Alabama.
Experience matters when it is your home loan.

American Acceptance Mortgage website, FHA, VA, Conventional Home Loans

Mortgage blog, TN, GA, AL real estate

Real Estate Purchase Loan

Real Estate Refinance Loan

FHA, VA, Rural Development, Reverse Mortgages, Construction Permanent, Renovation, FHA Renovation
Mortgage lending offices located in Chattanooga, TN

Join me on LinkedIn, Facebook, Twitter

Posted by

Thank you for visiting. This is the professional blog for

Richard Smith
NMLS# 184479 TN# 104002 GA# 28928 

Conventional, FHA, FHA 203k, HUD $100 down purchases, VA,

Rural Development ( USDA), and Jumbo Loans

Lending in Chattanooga, Tennessee and Georgia for over 20 years.

Sierra Pacific Mortgage

Cell phone: 423-280-0345 Email:

Visit my website to inquiry about a home loan.

Read my most recent articles in Scotsman Guide.

This blog represents the opinions of Richard Smith. The posts and comments written on the blog do not represent the opinions or positions of Sierra Pacific Mortgage. 


This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Lending / Financial
Georgia Real Estate
Tennessee Realtors - Join Hands
Internet Empowered Consumer
Addicted to Active Rain
government regulation
house financial services committee
financial regulation
financial markets crash

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Tim and Pam Cash
Crye-Leike (Sango) - Clarksville, TN
Real Estate Professionals - Clarksville TN

Richard, while I believe hearings need to happen - I do not believe that Mr. Frank or any of the other sitting members of this comittee should be doing them until an independent investigation on all who have been charged with oversight has been conducted.  I am surprised that this has not happened as of yet. 

Oct 11, 2008 01:14 AM #1
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?


Richard Smith

FHA VA Rural Development in TN GA
Ask me a question
Spam prevention