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Federal Reserve Eyes Financial Overhaul | |
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Treasury Secretary Henry Paulson unveiled his “blueprint” today towards the financial overhaul of the US economy and what parts the federal government would play. The financial overhaul will also include changes on the way mortgage loans are originated.
The blueprint contains short, intermediate and long term goals of stronger federal oversight of the US regulatory structure.
Contained in the short term goals include creating a new federal commission for mortgage originations, called the Mortgage Origination Commission (MOC), which would regulate home loans on a national basis. If enacted all state regulators would need to report to the MOC, if the MOC is unsatisfied they have the power to halt securitization of home loans.
The blueprint also calls for a single prudential financial regulator that would oversee the regulatory body for banks, currently there are five separate federal agencies overseeing the banks. The Office of the Thrift, one of the five federal agencies, would be eliminated all together.
Although the blueprint did not include plans to end the current foreclosure crisis, it is a step that may help avoid a similar meltdown in the future. This blueprint is just a small step towards maintaining a stable market once the economy begins to recover.