08-R092
2008 -- H 7376
Enacted 03/04/08
H O U S E R E S O L U T I O N
MEMORIALIZING THE
UNITED STATES CONGRESS TO TAKE EMERGENCY ACTION
TO PROTECT HOMEOWNERS
AND BANKS
Introduced By:
Representatives Almeida, Fox, Diaz, Williams, and E Coderre
Date Introduced: February
06, 2008
WHEREAS,
The onrushing financial crisis involving home mortgages, debt instruments
of
all types and the banking system of the United States, threatens to set off an
economic collapse
worse
than the Great Depression of the 1930s; and
WHEREAS,
Millions of Americans, including residents of the state of Rhode Island, are
faced
with foreclosure and loss of their homes over the coming months; and
WHEREAS,
The hedge funds which spread this financial collapse among markets
worldwide,
by dominating speculation in all those markets, are now going bankrupt and
demanding
government bailout of their securities and derivatives, and the nominal value
of the
derivatives
based on mortgages alone is the size of the combined GDP of the nations of the
world;
and
WHEREAS,
This financial crisis threatens the integrity of both state and federally
chartered
banks, as typified by the run on deposits of Countrywide Financial Corporation
in
California
on August 16, which could wipe out the life savings of too many American
people, and
drastically
undermine the economic stability of our states and cities; and
WHEREAS,
Under similar circumstances in the 1930s, President Franklin D. Roosevelt
successfully
intervened to protect banks and homeowners, addressing Congress with a
declaration
of
national policy" on April 13, 1933, which stated "that the broad
interests of the Nation require
that
special safeguards should be thrown around home ownership as a guarantee of
social and
economic
stability, and that to protect homeowners from inequitable enforced liquidation
in a
time
of general distress is a proper concern of the Government"; now, therefore
be it
RESOLVED,
That this House of Representatives of the State of Rhode Island and
Providence
Plantations hereby calls upon the United States Congress to take emergency
action in
the
form of a Homeowners and Bank Protection Act of 2007, as proposed by an
economist,
specifically
to:
1.
Establish a federal agency to place federal and state chartered banks under
protection,
freezing
all existing home mortgages for a period of time, adjusting mortgage values to
fair
prices,
restructuring existing mortgages at appropriate interest rates, and writing off
speculative
debt
obligations of mortgage-backed securities, financial derivatives and other
forms of financial
pyramid
schemes that have brought the banking system to the point of bankruptcy;
2.
Declare a moratorium on all home foreclosures for the duration of the
transitional
period,
allowing families to retain their homes. Monthly payment, the equivalent of
"rental
payments,"
shall be made to designated banks, which can use the funds as collateral for
normal
lending
practices, thus recapitalizing the banking system. These affordable monthly
payments
will
be factored into new mortgages, reflecting the orderly deflating of the housing
bubble, the
establishment
of appropriate property valuations, and reduced fixed mortgage interest rates.
While
this shakeout may take several years to achieve, in the interim period no
homeowner shall
be
evicted from his or her property, and the federal and state chartered banks
shall be protected,
so
that they can resume their traditional functions, serving local communities,
and facilitating
credit
for investment in productive industries, agriculture, infrastructure, etc.;
3.
Authorize governors of the several states to assume the administrative
responsibilities
for
implementing the program, including the "rental" assessments to
designated banks, with the
federal
government providing the necessary credits and guarantees to assure the
successful
transition;
and be it further
RESOLVED,
That the Secretary of State be and he hereby is authorized and directed to
transmit
a duly certified copy of this resolution to each member of the Rhode Island
Congressional
Delegation, and also to the President of the United Stated, for immediate
action.
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LC00602
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