Was Dodd A Lacky For Bad Banks?
Q: Pres. Bush proposes “mortgage rates for homeowners with spotty credit histories would be temporarily frozen under a nearly completed agreement between top Bush administration officials and a broad alliance of Wall Street’s biggest banks, mortgage investors, non-profits and consumer groups.” Is this a good idea?
A: It is. In fact I made the recommendation about a month ago to the administration, and I’m glad to see they are picking up on it. I thought this would help everybody here. If you freeze the “teaser rates”–those rates they drew people into these subprime mortgages on–that would be a good idea. And this way, the homeowner can stay there, maintain at least some payments without losing their home and going into foreclosure. And obviously the lending institution or those that hold the mortgages would get something other than zero. So it looks to me a good solution here that would provide everyone with some relief.
Q: This week the administration proposed freezing the interest rates for a lot of sub prime mortgages around the country that are about to trend up in interest rates. The burden of that lands disproportionately on minority home owners. Some are suggestion that merely freezing home rates for people who are in bad mortgages and can’t get out just delays the reckoning that is surely going to come. Do you agree with the proposal?
A: I think it’s a pretty good idea. In fact we made a similar suggestion. Freezing that rate would allow a couple of things to happen. One, people stay in their homes. But also the financial institutions, they’re better off getting 3-4% back than nothing whenever foreclosures occur. [Furthermore], I’m trying to make sure this doesn’t happen again. This was outrageous what went on here. There were no cops on the beat in this administration–they basically walked away from this and you have three times people of color in this country are being lured into sub prime lending.
Q: Regarding hedge funds. Your home state paper, the Stanford Advocate, reports: “Among Democrats running for president, Connecticut’s Dodd, the Senate Banking Committee chairman who has stated his reluctance to hike taxes on hedge fund profits, leads in political contributions, $726,950, from the booming investment sector. The tax code allows hedge fund executives to pay capital gains taxes at 15% instead of paying the personal income tax rate at 35%.” You raise money from these guys, and then the legislation which would raise their tax rate gets killed. Old time politics?
A: It hasn’t been killed at all. In fact, I haven’t come out even in favor or opposed. Look, there are unintended consequences to these actions. Having some idea of capital formation of the country, having a pro-growth Democrat that cares about these issues: What happens to endowments? What happens to retirement accounts? What happens to pensions? As chairman of that committee, the responsible answer is, let’s examine this.
Q: We’ve seen all this turmoil in the markets caused by the credit crunch and the crisis in the mortgage markets. The Federal Reserve lowered the discount rate for banks. Should they lower rates for everyone else, yes or no?
A: Yes, I think it will happen [soon]. But we also need more liquidity. And they ought to be allowing Fannie and Freddie Mac to put more liquidity in the market. It has seized up. You can’t get a mortgage in America today.
Voted NO on paying down federal debt by rating programs’ effectiveness.
Amendment intends to pay down the Federal debt and eliminate government waste by reducing spending on programs rated ineffective by the Program Assessment Rating Tool (PART).
Proponents recommend voting YES because:
My amendment says we are going to take about $18 billion as a strong signal from the Congress that we want to support effective programs and we want the taxpayer dollars spent in a responsible way. My amendment doesn’t take all of the $88 billion for the programs found by PART, realizing there may be points in time when another program is not meeting its goals and needs more money. So that flexibility is allowed in this particular amendment. It doesn’t target any specific program. Almost worse than being rated ineffective, we have programs out there that have made absolutely no effort at all to measure their results. I believe these are the worst offenders. In the following years, I hope Congress will look at those programs to create accountability.
Opponents recommend voting NO because:
The effect of this amendment will simply be to cut domestic discretionary spending $18 billion. Understand the programs that have been identified in the PART program are results not proven. Here are programs affected: Border Patrol, Coast Guard search and rescue, high-intensity drug trafficking areas, LIHEAP, rural education, child abuse prevention, and treatment. If there is a problem in those programs, they ought to be fixed. We ought not to be cutting Border Patrol, Coast Guard search and rescue, high-intensity drug trafficking areas, LIHEAP, rural education, and the rest. I urge a “no” vote.
Voted NO on $40B in reduced federal overall spending.
Vote to pass a bill that reduces federal spending by $40 billion over five years by decreasing the amount of funds spent on Medicaid, Medicare, agriculture, employee pensions, conservation, and student loans. The bill also provides a down-payment toward hurricane recovery and reconstruction costs.
Voted NO on prioritizing national debt reduction below tax cuts.
Vote to table [kill] an amendment that would increase the amount of the budget that would be used to reduce the national debt by $75 billion over 5 year. The debt reduction would be offset by reducing the tax cut in the budget framework from $150 billion
Voted YES on 1998 GOP budget.
Approval of the 1998 GOP Budget which would cut spending and taxes.
Status: CR Agreed to Y)78; N)22
Voted NO on Balanced-budget constitutional amendment.
Approval of the balanced-budget constitutional amendment.
Status: Joint Resolution Defeated Y)66; N)34
Require full disclosure about subprime mortgages.
Dodd sponsored requiring full disclosure about subprime mortgages
Sen. DODD: Today we are facing a crisis in the mortgage markets on a scale that has not been seen since the Great Depression: over 2 million homeowners face foreclosure at a loss of over $160 billion in hard-earned home equity; over one out of every 5 subprime loans is currently delinquent. These high default rates have frozen the subprime and jumbo mortgage markets and infected the capital markets to the point where central banks around the world have had to inject liquidity into the system to avoid the crisis from spreading to other segments of the market.
One of the fundamental causes of this serious crisis is abusive and predatory subprime mortgage lending. The Homeownership Preservation and Protection Act of 2007 is designed to protect American homeowners from these practices, and prevent this disaster from happening again. The legislation will:
- realign the interests of the mortgage industry with borrowers to insure the availability of mortgage capital on fair terms both for the creation and sustainability of homeownership;
- establish new lending standards to ensure that loans are affordable and fair, and
- provide for adequate remedies to make sure the standards are met; and create a transparent set of rules for the mortgage industry so that capital can safely return to the market without bad lending practices driving out the good.
It is important to keep in mind that only about 10% of subprime mortgages have been made to first time home buyers. This market has not been primarily about creating a new set of homeowners; a majority of subprime loans have been refinances. While maintaining access to subprime credit on fair terms is important, too much of the subprime market has actually put the homes and home equity of American families at risk.
In the coming months, the housing crisis is going to get worse. We will need to continue to press lenders and servicers to provide real relief for homeowners threatened with foreclosure.
Source: Homeownership Preservation and Protection Act (S.2452 ) 2007-S2452 on Dec 12, 2007
Reliable vote for banking & insurance industries
Dodd’s [Senate vote] reliably corporate-friendly when it comes to the industries that matter most to him. The banking, investment, and insurance industries can count Dodd among their best friends on the left side of the aisle–and he, in turn, can count them among his leading campaign contributors. In the 2008 primary field, he stands out as the candidate of Wall Street.In his election to Congress in 1974, Dodd represented Connecticut’s fairly conservative (and often Republican) second district, of the state’s eastern end. In 1980, he moved on to the Senate, thus expanding his constituency to include the bankers and brokers of the wealthy New York suburbs, and the insurance industry long based around Hartford.
Source: The Contenders, by Laura Flanders, p.171-172 Nov 11, 2007
Co-sponsored bill to make suing corporations harder
Dodd has grown closer to Wall Street financial interests, doing the grunt work on Capitol Hill for legislation that reduces government oversight. He was an important player in the transformations of the 1990s, when banks and securities firms merged, and when the credit card became a principal means of debt financing the United States.Dodd was an original co-sponsor of 1995 legislation making it more difficult for people to sue corporations, allowing judges to decide which plaintiffs were worthy, and limiting judgments in cases where the companies could successfully claim they didn’t know they were committing fraud. His defining moment came when Bill Clinton vetoed the bill. As the Journal of Accountancy noted, “perhaps the bill’s strongest supporter in Congress, Senator Christopher J. Dodd urged both House and Senate Democrats to override Clinton’s veto, even if it amounted to a defeat of the intent of his own party’s president.”
Source: The Contenders, by Laura Flanders, p.174 Nov 11, 2007
Advocated against extreme predatory lending practices
Dodd’s [pro-corporate] record is not entirely one-sided. He has taken positions against extreme predatory lending practices, for example, and he voted against the 2005 bankruptcy bill, which was considered a gift to the credit card lenders at the expense of consumers.But his close ties to the financial sector remain troubling, all the more so in view of his recent ascendancy to the chair of the powerful Senate Banking Committee, giving him oversight of the banking, financial services, and insurance industries. On the eve of the Democratic takeover of Congress (and of Dodd’s announcement of his candidacy), a government watchdog group said, “It’s a tightrope walk when you’re the chairman of a committee that regulates the industry that gives the most money to politics, in general. It has to be tempting to take a lot of money from the industry, because they want to give it so much.” Dodd, clearly, has long given in to temptation.
Source: The Contenders, by Laura Flanders, p.175 Nov 11, 2007
We need Justice Department to deal with antitrust issues
Q: How do you plan to help small farms as the large companies take over more farms?A: We’ve got to have a Justice Department that starts dealing with some of the antitrust issues in our country. It just doesn’t cover agriculture, but also a variety of other things, including media concentration here. The ability today of just concentrating power is making it very difficult for independents and smaller interests to be able to grow and to have the kind of economic success they’d like to have.
Stop rewarding companies who create jobs offshore
One of the taxes that needs to be addressed–because we’re losing manufacturing jobs in this country. We today reward industries that leave America by giving them tax breaks. I would like to see us reward companies that stay in our inner cities, go to places where jobs ought to be created. That to be a part of our tax policy. Source: 2007 Democratic Primary Debate at Howard University Jun 28, 2007
Voted YES on repealing tax subsidy for companies which move US jobs offshore.
Amendment to repeal the tax subsidy for certain domestic companies which move manufacturing operations and American jobs offshore. Reference: Tax Subsidy for Domestic Companies Amendment; Bill S AMDT 210 to S Con Res 18 ; vote number 2005-63 on Mar 17, 2005
Voted NO on reforming bankruptcy to include means-testing & restrictions.
Amends Federal bankruptcy law to revamp guidelines governing dismissal or conversion of a Chapter 7 liquidation (complete relief in bankruptcy) to one under either Chapter 11 (Reorganization) or Chapter 13 (Adjustment of Debts of an Individual with Regular Income). Voting YES would:
- Declare a debtor eligible only for Chapter 13, as anyone financially capable of paying back their creditors at a rate that still allows them to earn above their state’s median income
- Place domestic support obligations such as child support and alimony amongst the first priority claim category of non-dischargeable debts on a debtor filing for bankruptcy
- Require debtors to pay for and attend credit counseling prior to filing for bankruptcy
- Cap home equity protection at $125,000 if the debtor purchased a house within 40 months of filing for bankruptcy.
Voted NO on restricting rules on personal bankruptcy.
Vote to pass a bill that would require debtors able to repay $10,000 or 25 percent of their debts over five years to file under Chapter 13 bankruptcy (reorganization and repayment) rather than Chapter 7 (full discharge of debt). Reference: Bill HR 333 ; vote number 2001-236 on Jul 17, 2001
Rated 32% by the US COC, indicating an anti-business voting record.
Dodd scores 32% by US Chamber of Commerce on business policy whether you own a business, represent one, lead a corporate office, or manage an association, the Chamber of Commerce of the United States of AmericaSM provides you with a voice of experience and influence in Washington, D.C., and around the globe.
Our members include businesses of all sizes and sectors—from large Fortune 500 companies to home-based, one-person operations. In fact, 96% of our membership encompasses businesses with fewer than 100 employees.