Representative Michael E. McMahon Votes To Establish Commission To Investigate Financial Crisis

Press Release

Representative Michael E. McMahon Votes To Establish Commission To Investigate Financial Crisis

Continuing Congress' commitment to consumer protection and financial reform, Congressman Michael E. McMahon voted today to drastically toughen the enforcement and prosecution of mortgage and corporate fraud. The Fraud Enforcement and Recovery Act (FERA) will provide funding and tools to help law enforcement pursue and prosecute the type of fraud many blame for the worst financial crisis in decades. Critically, the legislation will also establish a bipartisan commission to investigate the causes of the collapse of our financial system and the ensuing recession.

"The purpose of this bill is two-fold: it will establish a bipartisan investigation to determine what past events contributed to the current financial collapse and it demands accountability moving forward," said Rep. McMahon. "In the past few years, we have seen numerous examples of fraud and deceit from companies like Enron and Worldcom, and today we are seeing it in our mortgage industry. As an unfortunate consequence of this pervasive, fraudulent behavior, many Staten Islanders and Brooklynites have lost their jobs, their savings or their homes. We cannot allow this to happen again and the Fraud Enforcement Recovery Act is designed with this end in mind. The bipartisan commission it establishes will investigate the collapse of our financial system and allow us to regulate certain industries effectively and in a manner beneficial to the industry as well as the American population."

The investigative commission created by FERA will have subpoena power and will seek to bring accountability and oversight to the financial system It is akin to the Pecora Commission established to investigate the 1929 stock market crash. The Pecora Commission's investigation uncovered the fraudulent and unscrupulous practices on Wall Street that led to the Great Depression, and laid the groundwork for the regulatory structure that served this country for decades thereafter.

FERA is the latest in a series of consumer protection reforms recently passed by the House. Last week, the House passed the Credit Cardholders' Bill of Rights, which includes tough new protections for consumers facing excessive credit card fees, sky-high interest rates and unfair agreements that credit card companies revise at will. Later this week, the House is expected to vote on the Mortgage Reform and Anti-Predatory Lending Act to curb abusive and predatory lending.

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