Shaheen sells financial reform

May 01, 2010

After three New Hampshire residents told stories of hardship that she attributed to "reckless" Wall Street behavior, U.S. Sen. Jeanne Shaheen called for tighter regulations on financial institutions during a press conference yesterday in Concord.

"We need to pass financial regulatory reform," Shaheen said, speaking yesterday morning to employees at Cobb Hill Construction. "Never again should American taxpayers have to bail out banks and financial institutions."

Shaheen made her remarks after Cobb Hill President Tom Avallone said the company's project volume had declined to half its normal level over the last 18 months - a drop-off in demand that Avallone said began with "unfair and dishonest" financial institutions and the fallout from their failures.

"They insured themselves against their losses, and it has caused a ripple effect," Avallone said, sitting next to Shaheen at a table at the company's North State Street building. "For 25 years we've based our business on honesty. . . . We should expect the same from Wall Street."

Flanking Shaheen and Avallone were Robert Gott and Michelle Griggs, both of Milford. Griggs, 40, who moved with her family to New Hampshire from California seven years ago, said she isn't sure she'll be able to stay in her home.

When Griggs's husband lost his job about five years ago, the couple refinanced to an adjustable rate mortgage. They thought they'd recover, that Griggs's husband would soon be rehired, that in a few years the economy would be fine.

But the markets collapsed, Griggs's husband lost his job again, and the rate on the mortgage rose quickly. Now they're struggling to refinance.

Griggs acknowledged that she and her husband are partly to blame for signing off on a questionable deal. But she believes there should have been more oversight of their lenders, who were "like vultures flying over our home," she said. "Nobody was watching them."

Gott, 55, is an engineer who lost his job last year. Of his seven neighbors, he said, four are unemployed.

"Many of them have just given up," he said.

His faith, too, has been shaken. "I was brought up to believe in the idea that if we all worked hard, you worked hard, we would work hard together, and we would prosper . . . and when we failed, we failed together," Gott said. "I'm not sure that's really the case anymore."

To prevent a future economic collapse, Shaheen said, "We need to make sure consumers are protected from abusive practices and empower them to make the right choices."

Asked whether there were provisions she didn't support in the bill before the Senate, Shaheen mentioned proposed regulations on proprietary trading as "an area I would like to see strengthened."

In a conference call with reporters later yesterday morning, Shaheen responded to a question about Republican criticisms of the bill - including that it doesn't address the underlying causes of the financial meltdown - by focusing on what she said it would accomplish.

"It's important that we close the loopholes that have allowed derivatives to operate in the dark," she said. "I think one of the best things the legislation does is to provide transparency."

Shaheen said she would be open to an amendment that addressed Fannie Mae and Freddie Mac. But she also said she felt the mortgage institutions were "important enough" to warrant a separate bill.

By:  Maddie Hanna
Source: Concord Monitor