[Congressional Record Volume 155, Number 186 (Friday, December 11, 2009)]
[Extensions of Remarks]
[Pages E2966-E2967]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         WALL STREET REFORM AND CONSUMER PROTECTION ACT OF 2009

                                 ______
                                 

                               speech of

                            HON. STEVE BUYER

                               of indiana

                    in the house of representatives

                      Wednesday, December 9, 2009

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 4173) to 
     provide for financial regulatory reform, to protect consumers 
     and investors, to enhance Federal understanding of insurance 
     issues, to regulate the over-the-counter derivatives markets, 
     and for other purposes:

  Mr. BUYER. Madam Chair, I rise in strong opposition to H.R. 4173 
because it does not exempt the VA's very successful Loan Guaranty 
program from regulation under the provisions of this bill. The saying, 
``if it ain't broke, don't fix it,'' applies. The VA guaranteed loans 
are not experiencing the high rates of delinquency and foreclosure like 
those backed by FHA. VA, to its credit, recognized the risks inherent 
in easing underwriting standards and stayed out of the subprime market.
  According to the September 30, 2009 National Delinquency Survey 
conducted by Mortgage Bankers Association, VA-backed home mortgages are 
experiencing significantly lower delinquency and foreclosure rates than 
any other government-backed programs. For example, as of September 30, 
the delinquency rate for all subprime mortgages was over 28 percent. 
FHA-backed loans show about a 14.4 percent delinquency rate while only 
about 8.1 percent of VA loans were delinquent. More ominously, 24.7 
percent of subprime loans were in foreclosure (VA quite wisely does not 
guarantee subprime loans), and 3.3 percent of FHA loans had reached the 
foreclosure stage but only about 2.3 percent of VA loans were being 
foreclosed. These differences due to VA's stewardship and the Veterans 
Affairs Committee's oversight amount to tens of millions of dollars in 
savings to the taxpayers.
  Madam Chair, the provisions of H.R. 4173 would clearly apply to the 
VA's Loan Guaranty program. For example, in defining the scope and 
functions covered by the bill, section 4002 excludes only the 
``Secretary of the Treasury and any agency or bureau under the 
jurisdiction of the Secretary.'' That means VA loan guaranty programs 
are subject to the provisions of the bill. Further in the definitions 
of ``Financial Activity'', it includes extending credit. VA has a small 
direct loan program used to sell their foreclosed properties. The 
bill's definitions also cover collecting consumer data. VA does that. 
VA also sells mortgage-based securities on the secondary market. Such 
activities are covered in the definitions section. The definitions also 
cover VA's contracts for portfolio servicing, including sales and 
maintenance of its foreclosed properties. Finally, VA-guaranteed loans 
offered by lenders would be subject to the jurisdiction of the CPRA 
rules and regulations.
  There are a couple of reasons why VA's loan guaranty program is 
outperforming the non-VA sector. First, the House Veterans Affairs 
Committee has oversight of the program and works hard to ensure the 
program is conducted in a manner that does not stray into products like 
subprime loans. Second, VA did not reduce its underwriting standards, 
and the combination of its higher standards along with servicing 
programs to assist veterans experiencing difficulty, has allowed VA to 
be a good steward of taxpayer dollars.
  My understanding of this mammoth 1,300 page bill is that the new 
bureaucracies and czars and whatever else is hidden in the bill will 
have the ability to affect how the VA loan guaranty programs are 
offered. Additionally, the broad language in the bill which allows the 
CFPA the discretion to define its own powers is at best short-sighted 
and at worst Orwellian. I am reminded that absolute power corrupts 
absolutely. Moreover, by placing additional tax burdens on financial 
institutions, many of which invest in mortgage securities offered on 
the secondary market, mortgage rates will go up. That is exactly what 
the VA's Loan Guaranty program, or the housing market at large,

[[Page E2967]]

does not need because the secondary market is a major source of new 
lending resources as well as a $200 million dollar revenue stream to 
the Treasury.
  Madam Chair, I didn't think it was possible to concoct a bill that 
was even more opaque and unintelligible than the majority's healthcare 
bill. Well, I was wrong. The majority has succeeded in grand fashion to 
foist yet another financial disaster in-the-making on the American 
public, one designed not to ensure stability in the markets, but to 
make financial markets subject to political intrusion and manipulation. 
We have seen what political pressure to expand access to credit to 
those whose incomes would not normally have qualified them for a 
mortgage did to the housing market. Let's not make this same mistake 
with veterans. In summary, the VA loan guaranty program has been well-
managed and does not need the regulation and supervision under H.R. 
4173 would allow.
  I urge all of my colleagues to oppose H.R. 4173 and I yield back.

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