U.S. Senator Debbie Stabenow (D-MI) today announced Senate passage of the Fraud Enforcement and Recovery Act of 2009, which will impose smart regulations on private mortgage brokers and lenders to prevent the same corporate frauds that helped lead to the collapse of our economy. The legislation also provides a blueprint to increase resources for law enforcement agencies, so they can effectively prosecute those responsible for engaging in fraudulent mortgage activity
"For too long, brokers and lenders were given free rein to take advantage of hard-working Americans in order to turn massive profits," said Stabenow. "This legislation takes action to provide our law enforcement agencies with the tools necessary to investigate and prosecute illegal mortgage and corporate activities. As we continue to rebuild our economy, we must hold those who have preyed on families accountable to protect our economy in the future."
Provisions in the legislation:
Imposes smart regulations on private mortgage brokers and lenders by amending the definition of a "financial institution" to include a "mortgage lending business." This will ensure these companies are held fully accountable under federal fraud laws.
Lays the ground work to allow the Department of Justice and the FBI to hire 410 new prosecutors and agents, as well as double the number of mortgage fraud task forces throughout the country.
Makes sure taxpayer money that is currently being made available to banks will not be used fraudulently or illegally. Funds distributed through TARP or the economic recovery package will be subject to the same federal oversight.
Creates a Financial Markets Commission charged with fully investigating the near collapse of the banking system and housing market in order to learn how to prevent a repeat of this crisis.