Subcommittees Focus on FHA; Too Big to Fail
March 15, 2013
Government backing for the Federal Housing Administration (FHA) gives it competitive advantages over private sector mortgage insurers, driving them out of the marketplace and leaving homebuyers with fewer choices, witnesses told the Financial Services Subcommittee on Housing and Insurance.
Wednesday’s hearing was the third in a series the Financial Services Committee is holding this year to examine the nation’s housing finance system. Committee Chairman Jeb Hensarling (R-TX) announced in January that the hearings will focus specifically on the financially troubled FHA and the need to create a sustainable and competitive housing finance system.
“Too Big to Fail”
Nearly three years after enactment of the Dodd-Frank Act, two powerful regulators created under the law are not fulfilling their missions and operate far from the public’s eye, according to a Government Accountability Office (GAO) report reviewed at a Financial Services Oversight and Investigations Subcommittee hearing.
Thursday’s hearing was the first in what will be an ongoing series of hearings this year that will examine Dodd-Frank, which enshrined “too big to fail” into law. Last week, Attorney General Eric Holder told the Senate Judiciary Committee he was “concerned” that prosecuting large financial firms would have a negative impact on the national economy. Financial Services Committee Chairman Jeb Hensarling (R-TX) and Subcommittee Chairman McHenry sent a letter to Attorney General Holder and Treasury Secretary Jacob Lew asking for documents and information the Obama Administration is relying on to determine which financial institutions it believes are “too big to fail” and, thus, “too big to jail.”