HR 3915: A FRANK Discussion (11/8/2007)

As expected, the House Financial Services Committee passed HR3915 out of committee to the full House of Representatives with a favorable vote of 45 to 19.

The vote, which came early Tuesday evening will need approval of the full House and then would need to be passed by the Senate and signed by the president before becoming law.

HR3915, which is strongly opposed by some segments of the lending community, sets minimum standards for loans including a reasonable assumption that the borrower will be able to repay the loan. It also mandates a mechanism for licensing mortgage brokers who are not appropriately regulated by the states or by agencies such as the Comptroller of the Currency. The bill also proposes liabilities for those who securitize potentially risky loans.



While the bill seeks to correct some of the longstanding practices that its sponsors feel have contributed to the current subprime situation, there is nothing in HR 3915 to address either fiscally or legislatively the current fallout from those practices.

The bill, if it does pass both houses of Congress, will undoubtedly see many changes before it is sent to the president for his signature.

If you oppose HR3915 you can use the following template, contributed by one of our readers, as a starting point for a letter to your state representative.

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