Mortgage reform bill picks up key backing
Two Republicans voice support for Barnery Frank's plan to address mortgage industry defects.
WASHINGTON (Dow Jones/AP) -- House Financial Services Committee Chairman Barney Frank, D-Mass., has secured two key Republican endorsements on his legislative plan to reform the mortgage industry, avoiding a potentially bruising political fight this week.
Rep. Spencer Bachus, R-Ala., the panel's top Republican, and Rep. Judy Biggert, R-Ill., another high-ranking member, have both signed on as co-sponsors to an amended bill that Frank plans to introduce before a committee vote on Tuesday.
"The most important fact about this compromise is that it has significant new safeguards to protect families from abusive lending," Bachus, who has long advocated for change in the mortgage industry, said in a press statement. "This is the culmination of discussions that began two years ago when I sent chairman Frank an outline for a subprime lending bill."
Among the changes, the bipartisan amendment includes the Federal Reserve among the regulators that would be responsible for implementing the new law. Also, the bill clarifies new secondary market liability.
"In addition to significant consumer protections, the bill also provides carefully crafted assurances that frivolous lawsuits will not disrupt the ability of capital markets to continue to provide the liquidity necessary to assist families to achieve the dream of owning a home," Bachus said.
The bill is one of the cornerstone's of Frank's legislative strategy this year and proposes widespread changes to the way mortgages are offered and overseen. Some Republicans have raised concerns that Frank's approach could cut off access to credit, but growing problems in the subprime mortgage market raised the proposal's profile.
Once the bill clears Frank's committee, it is expected to go to a vote on the House floor within weeks.
Last week, Frank said he was working on changes to the bill in an effort to secure bipartisan support, saying it was not "in anybody's interest for us to have the kind of knockdown battle that would further roil markets."
Republican dissenters are still expected at the panel vote on Tuesday. Two weeks ago, several Republicans took the rare step of holding a hallway press conference to denounce Frank's legislation, warning that it would make it harder for low-income borrowers to secure loans.