CHATTANOOGA, TN – U.S. Senator Bob Corker, R-Tenn., today reiterated his opposition to the Dodd regulatory reform bill as written, expressed continued hope that bipartisan agreement can be reached and discussed ways of addressing what he calls “fundamental omissions” in the underlying legislation. Corker shared some of his concerns and ideas for improvement on ABC’s “This Week.”
“While the Dodd bill addresses some important issues, including systemic risk, orderly liquidation, consumer protection and derivatives regulation, there are still many changes that need to occur before we move to debate the bill on the floor. If an acceptable bipartisan agreement can be reached allowing the bill to advance, I plan to introduce a series of amendments to address what I believe to be some fundamental omissions in the underlying legislation,” said Corker.
“At the core of the financial crisis were home loans that should never have been written because the borrowers could not repay them. To correct this glaring vulnerability in our financial system, I’ve stressed the need to establish minimum loan underwriting standards that would require an appropriate down payment and verification of the borrower’s ability to pay for the life of the loan. Such requirements do not exist in the Dodd bill, and I intend to introduce them on the floor.
“Additionally, investors who purchased mortgage-backed securities had no way of enforcing the representations and warranties made by the sponsors because they lacked access to critical underlying data or a third party opinion. Instead, they relied on the securitizer or the credit rating agencies that all suffered from significant conflicts of interest. I will address that problem by mandating disclosure and transparency of information.
“And finally, if a financial firm fails and must go through resolution, compensation and bonuses received by upper level executives and board members should be used to repay the firm’s creditors. I will offer language requiring the FDIC to execute this clawback provision as part of the orderly liquidation process. Never again can we allow failure to be rewarded.”