Loan Crisis
Congressman Barney Frank on the Subprime Mortgage Crisis
Click here to watch Barney Frank talk about the subprime mortgage crisis on BUniverse.
U.S. Congressman Barney Frank (D-Mass.), chairman of the House Financial Services Committee, talks about the causes of the subprime mortgage crisis. Frank argues that the crisis was caused in large part by mortgage companies that loaned money to people with bad credit and then quickly sold the mortgages to third-party investors. The practice, he says, marked a risky shift in the way business was done in an industry with little regulation. Frank, who represents the Massachusetts Fourth Congressional District, which includes Brookline and Newton, says the loan crisis has persuaded many legislators that the time has come to impose regulations on nonbank mortgage lenders. He says that three years ago, when a group of legislators attempted to move beyond the laissez-faire treatment of the mortgage industry and researched a bill that would look into subprime mortgages, the Republican majority in Congress ordered them to stop. Since then, he says, things have changed, both because the Democrats have gained control of Congress and because the ongoing mortgage debacle has made the need for change difficult to deny. The crisis has been blamed for things ranging from a tumbling stock market to declining home values. Addressing what he describes as Republican objections to regulation, Frank says that the size of the free-market system — $14 trillion — has persuaded him that “there is a wide range of public policy choices that we can make without endangering the capitalist system.”
February 11, 2008, noon
LAW Auditorium
About the speakers:
First elected to the U.S. House of Representatives in 1981, Democrat Barney Frank has served the Fourth District of Massachusetts for more than 25 years and is presently chairman of the House Financial Services Committee. He graduated from Harvard University in 1962 and from Harvard Law School in 1977. He was a Massachusetts state representative from 1972 to 1980 and before that was an assistant to Boston Mayor Kevin White. He has also taught at several Boston area universities, including BU.
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