Menendez Announces That He Is Exploring Legislative Options To Increase Oversight Of Sectors That Contributed To Mortgage Crisis

Menendez Announces That He Is Exploring Legislative Options To Increase Oversight Of Sectors That Contributed To Mortgage Crisis

Day after Fed rate cut, Menendez says there has been no responsibility or accountability for root causes of ill-fated subprime mortgage boom

Washington - At a Senate Banking Committee markup today, one day after the Federal Reserve Board cut its key interest rate by .50%, U.S. Senator Robert Menendez (D-NJ) announced that he is exploring legislation to increase oversight of financial sectors and actors that may have contributed to the nationwide mortgage crisis. Menendez said that heavy unchecked investment in the subprime market helped fuel the ill-fated subprime mortgage boom, perhaps in large part because accountability for such activity does not exist. Menendez said that if institutional reform to address the roots of the problem is not taken, then widespread a crisis like the current one could devastate the economy again.

Menendez made the following statement:

"If we do not get to the root cause of the vulnerabilities that have led to this crisis, the fallout could continue - and in five or ten years, it could happen all over again. In August, the Dow Jones industrial average dropped 1,000 points, mortgages and business loans dried up, and the Federal Reserve Board suddenly reversed course and pumped more than $100 billion into the baking system - and who did this help? Hedge funds, not homeowners.

"It is time those responsible are held accountable - and until now, Wall Street has been getting a free ride. Enough is enough. So, I think we need to question what it will take to make sure we do not end up here again. Everything should be on the table.

"I look forward to working with Chairman Dodd and this Committee to ensure that those who did not play fairly, those who did not act responsibly, those who sidestepped the problem and ignored the warning signs, be held accountable."

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