Lawmakers squabble over who's to blame for foreclosure crisis
By John Krull, January 29, 2009
INDIANAPOLIS—A Senate committee devoted more than a hour Thursday debating a measure that could not become law but revealed the different ways Republicans and Democrats view the mortgage and foreclosure meltdown.
Senate Resolution 13, sponsored by Sen. Lonnie Randolph, D-East Chicago, sparked the debate, which dominated the Insurance and Financial Institutions committee meeting.
The resolution would have urged the U.S. Congress to approve the Homeowners & Bank Protection Act, a measure that currently isn’t before Congress. Randolph’s resolution urged Congress to freeze foreclosures and force mortgage lenders to negotiate better deals with their customers on the edge of foreclosure.
Randolph said he introduced the bill because foreclosures had become a “crisis.”
The particulars of his resolution, though, often were overshadowed by a larger debate over what prompted the meltdown in the mortgage industry.
Randolph and the Democrats on the committee said it was lack of government regulation, which left homeowners unprotected.
Republicans, led by Sen. Travis Holdman, R-Markle and Sen. Brent Waltz, R-Greenwood, disagreed.
“We do not need more regulation,” Holdman said. “The banking industry is regulated second only to the airline industry.”
He also said that the mortgage crisis was Congress’s fault and compared Social Security to a Ponzi scheme.
Democrats, led by Sen. Greg Taylor, D-Indianapolis, and Sen. Frank Mrvan, D-Hammond, argued that the Republicans seemed to care more about bankers and depositors than they did homeowners.
“Keeping people in their homes is just government and good business,” Mrvan said.
When it came time for non-legislators to testify, Chris Beaumont – spokesperson for the Indiana Credit Union League – spoke in opposition. He said that the resolution sprang from an idea fringe political candidate Lyndon LaRouche had about reforming the banking industry.
After an hour of debate, Taylor moved to table the resolution so Randolph could work on it some more.
The committee voted, on a party-line 6-3 vote, against tabling it.
The committee then voted, 9-0, to reject the resolution.
“I think we’ve spend enough time on this,” said Sen. Allen Paul, R-Richmond, the committee’s chair.
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