Mr. LEACH. Mr. Speaker, I yield 4 minutes to the distinguished gentleman from Texas [Mr. PAUL].
(Mr. PAUL asked and was given permission to revise and extend his remarks.)
1997 Ron Paul 19:1
Mr. PAUL.
Mr. Speaker, I hesitate to speak out on this legislation, but having been the only dissenter in the committee I feel compelled to explain my vote.
1997 Ron Paul 19:2
I am confident this bill will neither destroy Western civilization nor save it. However, it does nothing to help it. What we have here is another problem, another law and another form to fill out, and all along I thought our new mandate was to reduce government rules and regulations. Every time Congress passes a new law to solve some problem, several new unsuspected consequences emerge, requiring even more problem solving regulations. This new piece of regulatory law, I am sure, will do the same. This bill will limit consumer choice, raise costs on consumers and limit availability of consumers to purchase a home.
1997 Ron Paul 19:3
Just this past weekend, Alan Greenspan explained why consumers are often better served by private market regulations rather than government intervention. He said that, quote: Government regulation can undermine the effectiveness of private market regulation and can itself be ineffective in protecting the public interest.
1997 Ron Paul 19:4
With this I concur. If Congress were really serious about making it easier for first-time home buyers and others to secure financing, it would do what it could do to lower the cost of capital. Interest rates are high because of the lack of sound monetary and fiscal policies pursued by our government.
1997 Ron Paul 19:5
What should we do? We should cut taxes. We should cut spending. We
should cut regulations, not add a new regulation. And follow sound monetary policy. This approach would lower the interest rates on mortgages for all homeowners and potential home-owners. This lower interest rate climate could benefit home buyers in the way that greater reliance on the nanny state cannot. The Constitution limits the power of Congress and clearly states that powers not delegated to Congress are reserved to the States or to the people. We should not interfere in the private, voluntary, noncoercive contracts of individuals in a free society. This legislation tramples on States rights. Some States, notably California and New York, already have laws on the books dealing with this issue. Congress should not be involved in this issue.
1997 Ron Paul 19:6
Perhaps this bill is just a veiled attempt to put all mortgages, public and private, under the control of HUD. Private mortgage insurance has benefited 20 million consumers over the past 40 years. Now Congress wants to do for them what they have done for our public housing tenants. Any new regulatory mandates by Congress would only add to the cost of private mortgage insurance and hurt the very people the proponents of the legislation are trying to help.
1997 Ron Paul 19:7
I suggest that a no vote is the proper vote on this bill. H.R. 607 will limit consumer choice, it will raise the cost to the consumer, it will push home ownership further from the grasp of poor Americans. If you want to vote for the consumer and if they want to help all potential home buyers, vote no on H.R. 607.
1997 Ron Paul 19:8
I hesitate to speak out for this legislation, but having been the lone dissenter in committee, I feel compelled to explain my vote.
1997 Ron Paul 19:9
I’m confident this bill will neither destroy Western civilization nor save it. However, it does nothing to help it.
1997 Ron Paul 19:10
What we have here is another problem, another law, and another form to fill out. And all along I thought our new mandate was to reduce government rules and regulations.
1997 Ron Paul 19:11
Every time Congress passes a new law to solve some problem, several new unsuspected consequences emerge requiring even more problem-solving regulations. This new piece of regulatory law, I’m sure, will do the same.
1997 Ron Paul 19:12
This bill will limit consumer choice, raise costs on consumers, and limit the ability of consumers to purchase a home.
1997 Ron Paul 19:13
Just this past weekend, Alan Greenspan explained why consumers are often better served by private market regulation rather than government intervention. He said that “government regulation can undermine the effectiveness of private market regulation and can itself be ineffective in protecting the public interest.” With this I concur.
1997 Ron Paul 19:14
He continued,
The real question is not whether a market should be regulated. Rather, it is whether government intervention strengthens or weakens private regulation, and at what cost. At worst, the introduction of government rules may actually weaken the effectiveness of regulation if government regulation is itself ineffective or, more importantly, undermines incentives for private market regulation. Regulation by government unavoidably involves some element of perverse incentives.
1997 Ron Paul 19:15
The perversity of this bill is its effect on consumers. It will increase premiums on consumers, limit choices, and make home ownership less affordable.
1997 Ron Paul 19:16
If Congress were really serious about making it easier for first-time home buyers and others to secure financing, it would do what it could to lower the cost of capital. Interest rates are high because of the lack of sound monetary and fiscal policies pursued by our Government.
1997 Ron Paul 19:17
What should we do? We should cut taxes, cut spending, cut regulations—not add a new one—and follow sound monetary policies. This approach would lower the interest rates on mortgages for all homeowners and potential homeowners. This lower interest rate climate would benefit the home buyer in a way that greater reliance on the nanny State cannot.
1997 Ron Paul 19:18
The Constitution limits the power of Congress and clearly states that powers not delegated to Congress are reserved to the States or to the people. We should not interfere in the private, voluntary, noncoercive contracts of individuals in our society.
1997 Ron Paul 19:19
This legislation tramples on States rights. Some States, notably California and New York, already have laws on the books dealing with this issue. Congress should not be involved in this issue.
1997 Ron Paul 19:20
It was that wonderful competition of experiments at the State level that brought consumers such benefits as private mortgage insurance, adjustable rate mortgages, and automatic teller machines [ATM’s]. Private markets make home ownership more affordable while Washington interference perversely hurts the consumer.
1997 Ron Paul 19:21
H.R. 607 is harmful and unnecessary. The overwhelming majority of homeowners have no problem canceling their private mortgage insurance, if it is not canceled automatically. In fact, Fannie Mae has studied this concern and is currently setting clear guidelines regarding PMI. These guidelines would quickly become industry standard given the influence they have in the market.
1997 Ron Paul 19:22
If Congress were so concerned about consumers’ alleged overpayment regarding PMI, then we should do something about the mortgages in which we have a vested interest; namely, FHA loans. But this bill exempts FHA homeowners even though it is the FHA mortgages where the Government has some influence.
1997 Ron Paul 19:23
Perhaps this bill is just a veiled attempt to put all mortgages, public and private, under the control of HUD. Private mortgage insurance has benefited 20 million consumers over the past 40 years. Now Congress wants to do for them what they have done to our public housing tenants.
1997 Ron Paul 19:24
A dynamic, free market is the best vehicle for prosperity. By overregulating the marketplace, the flexibility to deal with the law of unforseen consequences is lost. Loan to current value is a better indication of the current situation than loan to original value. Forcing mortgage companies to only look at the loan to original value ignores potential changes in that value. In short, it ignores reality.
1997 Ron Paul 19:25
We cannot ignore the realities of the marketplace. Real values of real estate declined as much as 50 to 60 percent over a 6-month
period in the late 1980’s. Mortgage decisions should include a combination of factors and individual choices.
1997 Ron Paul 19:26
Any new regulatory mandates by Congress would only add to the cost of private mortgage insurance and hurt the very people the proponents of the legislation are trying to help. There is a cost to any regulatory burden imposed on the economy. This misguided legislation would increase the cost, and thus limit the availability, of mortgage insurance for everyone. Since very few people would gain from this legislation, it punishes the vast majority for the benefit of the few. We should reject this special interest favoritism and get our own fiscal house in order so all of us can benefit. We should not impose unfunded mandates on those that are helping consumers realize their goal of home ownership.
1997 Ron Paul 19:28
H.R. 607 will raise costs to the consumer, and push home ownership further from the grasp of poor Americans. If you want to vote for the consumer and all potential home buyers, vote “no” on H.R. 607; and I yield back the balance of my time.
Notes:
1997 Ron Paul 19:1
Ron Paul uses the wrong word, compelled, instead of impelled, where the force is internal.
1997 Ron Paul 19:7
Ron Paul says, If you want, and Congressional Record says If my colleagues want. This may have been an intentional misquote, done because the Congressman must address the speaker. See the C-Span video, at 13:27:54 local time.
Ron Paul’s closing words, and I yield back the balance of my time. are omitted from Congressional Record, perhaps because he extends his remarks. See the C-Span video, at 13:28:03 local time.
1997 Ron Paul 19:8
This verse and those that follow were inserted in Congressional Record as an extension of remarks, and were not spoken on the House floor.
