December 20, 2009
Black Caucus Wins Changes to Overhaul of Financial Sector Regulations
By Phil Mattingly, CQ Staff
After weeks of negotiations, the Congressional Black Caucus is expected to back a broad financial regulatory overhaul when it reaches the House floor this week, thanks to the inclusion of $4 billion to address the foreclosure crisis.
Financial Services Chairman Barney Frank included language in his manager’s amendment that would channel money from the $700 billion financial bailout program to address the mortgage crisis, which has affected the entire country but has had a particularly strong impact on black communities over the past two years.
“That bill is a bill that now includes some of our most important issues, and we’re very pleased about that,” said Maxine Waters, a California Democrat who has led the caucus’ protest and negotiations over the Obama administration’s handling of the economy.
Waters and Melvin Watt, D-N.C., indicated that negotiations with the administration were ongoing, and the 42-member caucus wants more of its concerns addressed in any jobs bill put together by House leadership. Waters and Watt chair subcommittees on Frank’s panel.
“We are looking at a whole array of issues . . . that we will be meeting with the administration and leadership about,” Waters said.
The caucus’ concerns have been apparent since Nov. 19, when Waters led the 10 caucus members on the Financial Services Committee in a boycott of a panel vote on the portion of the regulation package dealing with large financial institutions whose failure would pose broad risks to the financial system.
The boycott stemmed from a battle with the Obama administration over its handling of several issues important to the African-American community, not the least of which is an unemployment rate that has reached 15.6 percent, according to the Labor Department, compared with 9.3 percent for white Americans.
“The bill is a bill that we liked, but it just happened to be a moment . . . where we decided to make sure we got everybody’s attention and have the kinds of negotiations that would help open up opportunities,” Waters said.
Frank, D-Mass., will attempt to attach the foreclosure language to the regulatory overhaul of the financial system, including a new title to the bill in a manager’s amendment that will be considered by the Rules Committee this week.
“We have a great frustration with the failure of the combined efforts of elements of the federal government to make a substantial impact on the foreclosure crisis,” Frank said Tuesday at a hearing on the government’s response to the problem.
Redirecting TARP Money
The language would require the Treasury secretary to take $3 billion from the Troubled Asset Relief Program and direct it to the secretary of Housing and Urban Development (HUD) for use through the Emergency Homeowners’ Relief Act.
That law created a standby authority for the HUD secretary to create an emergency program to make loans, advances and emergency mortgage relief payments to homeowners in order to defray mortgage expenses.
Frank’s amendment also proposes redirecting an additional $1 billion from TARP funds to the Neighborhood Stabilization Program established in July 2008. The money would provide grants to states, local governments and nonprofit organizations for the purchase and redevelopment of abandoned and foreclosed homes, an idea championed by Waters.
“This never has been about this bill,” Watt said of the caucus protest. Addressing the economic problems in the black community “is a multifaceted problem that’s going to require a multifaceted solution, and this is one of them.”