Congressman Frank Lucas: Frankly Speaking

Mar 06, 2009
In The News


Yesterday, Congress passed H.R. 1106, the Helping Families Save Their Homes Act. Supporters hope this legislation will restore liquidity in the housing market and assist those homeowners who are in foreclosure. While this is a lofty goal, the bill just passed may not achieve it.

There are certain aspects of the bill that I can support. For example, permanently raising the FDIC insurance limit from $100,000 to $250,000 will provide additional assurances that our banks are safe, which will encourage investment.

On first blush, it may appear that giving judges this power will be helpful, however the long-term results are unsettling. The most troublesome provision grants bankruptcy judges the power to write down the principle on a mortgage while lowering the interest rate and extending the terms. Known as “cramdown,” this provision would cause mortgage interest rates for the average American consumer to skyrocket, making homeownership harder for all Americans. Compounding this problem, cramdowns will be costly to investors who have invested in mortgage-backed securities and will cause them to demand a higher interest rate on all further mortgages. The result is grim: in a time when we need to restore confidence and liquidity to the housing market, this bill will actually discourage investment and decrease lending, perpetuating the current freeze on credit.

I am sympathetic to those Americans who are struggling with their mortgage payments. However, approximately 90 percent of homeowners are paying their mortgages on time. The federal government cannot continue to bailout the irresponsible choices of a few at the cost of many. Americans are suffering from bailout fatigue. It is time for Congress to come up with serious solutions to the serious problems we are facing instead of continuing to throw money we don’t have at every problem that presents itself.

# # #

Recent Posts

Jun 17, 2024
National Security

Lucas Votes for NDAA on 249th Birthday of U.S. Army

Washington, DC – Congressman Frank Lucas (OK-03) released the following statement after the U.S. House of Representatives passed the FY25 National Defense Authorization Act (NDAA). Lucas voted in favor of the legislation.   “Today, on the 249th birthday of the U.S. Army, House Republicans fulfilled our duty to support America’s servicemembers and bolster our national security. Not only […]

Jun 3, 2024

Lucas Statement on Farm Bill

Washington, D.C. – Congressman Frank Lucas (OK-03) released the following statement after the House Committee on Agriculture completed its markup of the next Farm Bill: “I applaud Chairman Thompson for completing the gargantuan task of passing this Farm Bill out of Committee. As a former Chairman of the House Ag Committee, I know firsthand just how […]

May 16, 2024

Lucas: Basel Endgame Will Penalize Central Clearing

Washington, D.C. –  At today’s House Financial Services Committee hearing, Congressman Frank Lucas (OK-03) questioned FDIC Chair Gruenberg and Federal Reserve Vice-Chair Barr on the consequences of the Basel Endgame proposal. Specifically, Congressman Lucas brought to attention his concern that the Basel requirements will constrain the capacity of banks to offer central clearing. He has previously pressed this […]