Today, as the House of Representatives considered the Republican budget proposal on the House Floor, Congresswoman Maxine Waters (D-CA), Ranking Member of the Financial Services Committee, waged a devastating critique of the proposal as harmful to our nation’s economic stability, to our housing market and to American consumers.
Waters criticized the shortsightedness of a Republican budget that would invite a return to the risky days that led to the crisis, by repealing important prohibitions against risky bank practices, severely undermining the highly successful Consumer Financial Protection Bureau, and inviting the return of predatory mortgage activity that would disproportionately impact communities of color. The Ranking Member also criticized the Republican budget for embracing the harmful PATH Act, a divisive proposal to remake the housing finance system that would end the 30-year fixed rate mortgage, hurt community banks and widen the wealth gap.
Full text of the opening remarks is below:
“Thank you Mr. Chairman, and thank you Mr. Van Hollen for your leadership on the Budget Committee.
As Ranking Member of the Financial Services Committee, I’d like to express my serious concerns with how this Budget resolution undermines our financial stability, protection for American consumers, and the entire housing market.
It is now seven years since our country’s financial system was rocked by Wall Street greed and predatory lending. All of our constituents bore witness to an economy where family members lost their jobs, friends were made homeless, and everyone’s savings no matter how modest were depleted. In all, trillions of dollars of wealth vanished in the span of a few months. And when some of the money returned, it was not shared equally.
Democrats in Congress worked to prevent a repeat of this disaster by among other things, putting in place the tools necessary to prevent bailouts of megabanks, and creating an independent regulator solely tasked with defending consumers from financial harm.
Rehashing failed policies, the Republican budget resolution would repeal these tools and bind the hands of the Consumer Financial Protection Bureau. The Republicans would return us to a system where a company like AIG could once again threaten the entire financial system. The Republicans would return us to a system where lenders can make predatory mortgages to some of our most disadvantaged communities, including communities of color.
But that is not all, this Budget resolution goes even further—it would privatize Fannie Mae and Freddie Mac along the lines of the failed PATH Act, a terrible piece of legislation rejected by everyone from housing advocates, REALTORS, home builders, mortgage banks, academics, and I might add, a majority of Members in the House. Why do we all reject it? We fear that it would end of safe mortgages like the 30-year fixed rate mortgage. We fear it would favor only the megabanks, hurting community banks. We fear that it would further widen the wealth gap in this country.
This budget resolution is built upon a flawed foundation that harms some of our most vulnerable communities. I urge that the members of this House oppose the Republican Budget resolution.”
In a recent meeting of the Financial Services Committee to consider the fiscal year 2016 “Budget Views and Estimates” Waters and her Democratic colleagues chastised Committee Republicans for putting forth a budget that fails to provide real solutions that will address the problems of income inequality, the racial wealth gap, slow wage growth, unemployment and a secure social safety net.