WASHINGTON – Yesterday, the Bush administration announced a plan to modify a select group of home loans on the verge of foreclosure. Today, federal regulators issued limited guidelines for capital infusions being given to banks as part of the economic rescue plan.

U.S. Senator Robert Menendez (D-NJ), a member of the Banking Committee, has called on the Bush administration to take more affirmative and forward-looking action to stem the foreclosure crisis for more than a year and a half. He has also joined with colleagues in calling for stronger guidelines for capital infusions to help ensure that the program will stimulate lending (http://menendez.senate.gov/newsroom/record.cfm?id=304850). Today, he said that the mortgage modification plan and the guidelines are insufficient:

“Unfortunately, the Bush administration has not broken from its frustrating too-little-too-late pattern throughout this foreclosure crisis. They are like a fire department that shows up late and brings only a garden hose. Our goal should be to prevent millions of Americans from losing their homes, and that means we must have much better foresight and a more aggressive program. If someone as independent and respected as Sheila Bair is adamant in her concern over the mortgage modification plan, I would hope that Treasury is listening.

“As for the lending guidelines announced today, we must remember that the goal of infusing banks with money is to stimulate lending. These new guidelines seem to be too limited and weak to ensure lending and protect taxpayers. Stronger guidelines, such as the ones we have called for, will make sure banks are using the public money to stimulate the economy and make it easier for people to get auto loans, student loans and small business loans.”

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