Fed wants more power over lenders
Federal Reserve Chairman Ben Bernanke said this morning that the Fed will introduce new mortgage lending rules, especially targeting to high-cost lending. Alisa Roth reports why the Fed wants more power.
Federal Reserve Chairman Ben Bernanke speaks at the The Federal Deposit Insurance Corporation -- July 8, 2008 (Mark Wilson/Getty Images)
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Scott Jagow: The Federal Reserve has been pretty hands-on dealing with this financial mess. And with things looking as shaky as ever this morning, the Fed is taking more action.
A couple of hours ago, chairman Ben Bernanke said he may extend the emergency loan window for Wall Street banks through the end of the year, so they can get more capital. The idea is to get the credit flowing, because right now, it's just not.
Ben Bernanke: The Federal Reserve will continue its efforts to make our financial system stronger and more resilient so that it can continue to play its necessary role of supporting economic group and making credit available to all qualified borrowers.
Bernanke also talked about giving the Fed more powers over banks and mortgage lenders. Alisa Roth takes it from there.
Alisa Roth: Ben Bernanke says the Fed will introduce new rules about mortgage lending next week. The new rules will apply to all lenders, and are designed to address the recent problems we've seen. Especially those connected to high-cost lending.
He says the Fed is "strongly committed" to keeping the financial system stable and to helping it work better. But to do that, he reiterates that the Fed will need even more power. And he says the Fed won't be able to do its job:
Bernanke: Without the authority to directly examine banks and other financial institutions that are subject to prudential regulation.
He says the Fed will also need the power to look at financial firms as a whole.
As for Fannie Mae and Freddie Mac, Bernanke says he's pleased with recent efforts to improve oversight of the companies. The better shape they're in, he says, the better they'll be able to do their job of increasing access to mortgage credit without adding unnecessary risk to the markets.
In New York, I'm Alisa Roth for Marketplace.
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