Read a Pacific Northwest, liberal perspective on world, national, and local politics. From majestic Redmond, Washington - the Northwest Progressive Institute Advocate.

Thursday, October 7, 2010

White House: President Obama will veto bill that might have worsened foreclosure mess

The White House announced today that President Barack Obama will effectively veto H.R. 3808, the Interstate Recognition of Notarizations Act of 2010. H.R. 3808 would have required federal and state courts to accept several types of documents notarized manually or even automatically by computers and sent across state lines.

The legislation, passed by voice vote in the House and by unanimous consent in the Senate, somehow caught the eye of Ohio's Democratic Secretary of State, Jennifer Brunner, who began asking questions about it. Consumer protection advocates echoed her concerns and advised President Obama not to sign the bill, which seems intended to speed up the process of robotically generating the necessary paperwork to kick people out of their homes.

Today, the White House agreed.

"Notarizations are important for a large range of documents, including financial documents," reflected White House Communications Director Dan Pfeiffer in a blog post intended to explain why the legislation was being deep-sixed.

"As the President has made clear, consumer financial protections are incredibly important, and he has made this one of his top priorities, including signing into law the strongest consumer protections in history in the Wall Street Reform and Consumer Protection Act. That is why we need to think through the intended and unintended consequences of this bill on consumer protections, especially in light of the recent developments with mortgage processors."

NPI applauds this decision. The foreclosure mess is already bad enough... the last thing we want to do is make it easier for big banks to bypass the hurdles we have in place to protect homeowners. In addition to this action, the President should join with other Democrats in calling for a moratorium on foreclosures. Evidence suggests that Wall Street banks are not adhering to state and federal laws which govern how foreclosures must be processed. An investigation is warranted to determine just how widespread the misconduct is.

Wall Street banks have proven over and over again that they cannot be trusted to treat people fairly. We've taken a few step forwards towards stronger, sensible regulations, but we still haven't restored the Glass-Steagall Act, which provided a firewall between commercial and investment banking. Restoring Glass-Steagall would, of course, require the likes of Bank of America to be broken up into smaller companies, but that would actually be a good thing.

Reform doesn't end with stronger regulatory controls, however. We still need to overhaul our markets, which need to rebuilt and dedicated to the broadest possible prosperity. If we don't address the root causes of our economic instability and insecurity, we will be doomed to repeat the mistakes of the past.


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