Federal Money Mavens Propose New Mortgage Rules
Weighing in on the issue of the nation’s troubled mortgage market, a group of top federal economic policy-makers assembled by President George Bush is recommending stricter standards for the industry.
The proposed new rules include tougher federal and state regulation of financial institutions; a national licensing system for mortgage brokers; and more financial backing and increased disclosure concerning the securitization of mortgages, reports the New York Times.
The proposals reportedly don’t break new ground, and Treasury Secretary Henry M. Paulson Jr., who presented them in a speech today at the National Press Club in Washington, D.C., did not offer many details, according to the newspaper. It writes that “some of his recommendations amounted to little more than demands that investors and financial institutions take greater care in analyzing and managing their risks.”
Says Paulson: “Regulation needs to catch up with innovation and help restore investor confidence but not go so far as to create new problems, make our markets less efficient or cut off credit to those who need it,” reports the Wall Street Journal.
The business newspaper provides a link to his prepared remarks, as well as a policy statement (PDF, sub. req.) of the President’s Working Group on Financial Markets.
