Barnanke Criticized By Senator Schumer
November 16, 2007
United States Senator Charles Schumer had some harsh comments for Federal Reserve Chairman Ben Bernanke recently. Schumer strongly encouraged the Fed Chairman to think of the recent credit market mess as a “call to action”. Schumer also urged the Chairman to take decisive action in order to assist the growing problem with mortgage foreclosures which may lead to a bigger economic problem.
Bernanke was appearing before the Congressional Joint Economic Committee in Washington, DC. Schumer went on to say that the Fed’s “hands off attitude” was not the appropriate action to take as the nation faces growing problems with its economic base. These problems include a steep increase in the price of oil as well as a steep decrease in the value of the dollar.
Senator Schumer, NY Democrat, went on to say: “I’m very concerned, Mr. Chairman, that none of the regulators are acting quickly or boldly enough to deal with the risks.”
In the past, the Congress has criticized the Federal Reserve for not issuing guidance that would protect consumers from questionable lending practices that have encouraged foreclosure rates with sub-prime mortgage homeowners.
In response, Bernanke said the Fed is working on those issues and that it plans to issue guidance on the rules addressing unfair or deceptive mortgage lending practices by of the end of this current year.
Senator Schumer did not seem impressed and said that the Bush administration’s current policy response to the growing problem of sub-prime mortgage foreclosures has “not come close to matching the magnitude of the crisis.” The Senator asked Bernanke to use his power to make these changes happen as quickly as possible