“Today’s Federal Reserve Board regulations should help to put an end to certain abusive lending practices.  Too many homeowners have been put into loans that are unaffordable, and as a result, we are now seeing the devastating effects of the failure of millions of mortgage loans.  My initial reaction is that, if effectively followed and enforced, the new regulations, though not strong enough in all areas, will help to prevent similar abuses in the future.  Under these regulations, lenders will only be permitted to make subprime mortgage loans that are sustainable.  Lenders will no longer be able to qualify borrowers based on the value of the home they are purchasing or on short-term, teaser rates. 

“The Administration's failure to prevent bad lending practices has caused unprecedented hardship in the form of record foreclosures and market turmoil.  Now, homeowners across the country and our entire financial system are suffering the consequences.  Regrettably, the Administration has refused to develop or support any meaningful effort to help keep Americans in their homes and preserve efficiency and stability in our markets.

“IndyMac’s closure is the latest example of the severe consequences associated with risky mortgage lending practices, coupled with regulatory failures which allowed these risky lending practices to occur.  This combination of risky lending and lax regulation is largely responsible for the current problems in our housing markets and overall economy.  I intend to thoroughly examine the implications of this failure.  That said, I am confident in the strength and stability of our banking system, and the mechanisms in place to ensure that depositors have access to their money even when a bank fails.  The FDIC’s announced actions as conservator underscore this strength and stability.”

Connecticut Senator Chris Dodd, Chairman of the Senate Committee on Banking, Housing and Urban Affairs, today announced that the Senate passed the Housing and Economic Recovery Act.  This landmark bipartisan legislation includes major efforts to address the root of our economic problems – the housing crisis – by providing relief to homeowners in Connecticut and across the country, and by introducing broad improvements to the nation’s housing sector. 

Today, Christopher Dodd (D-CT), U.S. Senators Russ Feingold (D-WI), and Robert Menendez (D-NJ) introduced legislation sending an important message to oil companies about the federal land they lease for oil development – use it or lose it.  The legislation, entitled the Responsible Federal Oil and Gas Lease Act, would spur oil companies to develop the 66 million acres of federal land they currently lease but have not developed to produce oil.  The bill, which is similar to legislation introduced in the House by Rep. Nick Rahall (D-WV), mandates that oil companies either produce on or seek to develop their existing federal leases, or relinquish the leases.  The bill ensures that companies take reasonable steps to produce oil and gas on federal lands and waters within a lease's term.   The Senators are also supporting the Responsible Ownership of Public Lands Act, introduced by Dodd and cosponsored by Feingold and Menendez, to place an escalating fee on leases of federal land that lie unused.

Senator Chris Dodd (D-CT) today responded to the announcement by the Department of Defense that the Air Force will hold a new competition to select the manufacturer of the next generation of air refueling tankers.  This decision comes shortly after the Government Accountability Office’s (GAO) decision to uphold a protest by the U.S.-based Boeing Corporation that the Air Force improperly awarded the $35 billion contract to Northrop Grumman and European aircraft manufacturer Airbus. 

“I am pleased that the Federal Reserve is now taking steps to issue new rules for mortgage lending and to improve oversight of our financial system.  As documented by the Senate Banking Committee, it was the lack of regulatory will, not lack of regulatory authority, that contributed to the current credit crisis.  While the Fed and Treasury promote ideas to strengthen our markets in the long-run, it is my hope that they and my Senate colleagues will continue to support more immediate solutions for the economic problems facing Americans today.  In addition to helping hundreds of thousands of Americans keep their homes, the Senate housing bill will provide for the improved oversight of government-sponsored entities and help restore liquidity to the mortgage markets that Chairman Bernanke and Secretary Paulson called for today.  The financial markets cannot return to normal without strengthening the well-being of homeowners and consumers who participate in those markets every day.  Going forward, the Committee will examine regulatory proposals to ensure that regulators fulfill their mandate to ensure financial security for consumers and investors, as well as large financial institutions.”

Senator Chris Dodd, Chairman of the Senate Committee on Banking, Housing, and Urban Affairs released the following statement today on the Memorandum of Understanding (MOU) that was entered into by the SEC and Fed.

"It is my hope that the MOU will result in improved supervision of investment banks and bank holding companies, and strengthen our financial markets for investors and our nation's economy.  It is important to note that the MOU does not grant any new authority to either agency, nor does it affect the ability of the Congress and the Senate Banking Committee to oversee regulated institutions and markets.  I am pleased that the MOU seeks to achieve its important objectives while leaving consideration of any broader reforms to our financial regulatory landscape to Congress-- issues that the Senate Banking Committee will begin to examine in greater detail over the coming weeks and months."

Senator Chris Dodd (D-CT) continued his series of “Road to Economic Recovery” events today at the Atlantic Steel & Processing Company in Waterbury.  Dodd met with the company’s employees and management to hear from them about how they are creating new jobs as many companies are being forced to cut their workforce.  Dodd also toured the facility.

“As a result of Chairman Bair’s leadership, the FDIC has been at the forefront of addressing the mortgage crisis.  It comes as no surprise, then, that she has put forward a constructive proposal that is worthy of Congress’ serious consideration. I look forward to further reviewing the details of the plan.”