House Financial Services Committee Ranking Member Barney Frank (D-Mass.) said Friday that he would reintroduce legislative language next week that would require large financial institutions to pay for federal mortgage assistance programs.
Frank said his bill would allow four federal mortgage programs that Republicans are working to eliminate this month to continue operating without threatening to increase the U.S. budget deficit and debt. He said his bill would be similar to language that he tried unsuccessfully to include in financial reform legislation last year.
"I don't mean to demonize, but I think Goldman Sachs, and Wells Fargo, and the Bank of America, and Citicorp, and Morgan Stanley, and the large hedge funds, I think they can pay for this," he said on the House floor. He was speaking in defense of a $1 billion program approved last year that helps unemployed people make their mortgage payments for up to 12 months.
"They can afford this billion dollars," Frank said of the large banks. "Their bonuses alone would pay for these programs."
Frank's threat to force banks to pay for the programs may be just that — a threat — since House Republicans are unlikely to allow his proposal to proceed. But Frank noted that even as House Republicans are working to eliminate four mortgage programs this week and next week, these bills are unlikely to go forward in the Senate or be signed into law by the White House.
For that reason, Frank said his legislation would give Republicans the choice of keeping these programs in place and having their costs accrue to the U.S. debt, or have banks pay for them.
The House on Thursday approved legislation, H.R. 836, that would end a Federal Housing Administration mortgage program, which is authorized to spend $8 billion to refinance mortgages. Next week, Republicans will try to repeal the Home Affordable Modification Program, and the Neighborhood Stabilization Program.