House Financial Services Committee Chairman Barney Frank (D-Mass) and Idaho Democrat, Walt Minnick, accused federal bank examiners of being "inappropriately tougher" in analyzing asset quality and excessively downgrading loans to the detriment of the economy.
The Congressmen claimed that subjecting shaky borrowers to overly strict capital calls, harmful amortization schedules and additional capital requirements can force real estate into the market at fire-sale prices and cause a drop in the value of similar properties.
"These actions are directly counter to the message from Congress calling for banks to work with borrowers to help them through these difficult times and to make credit available," Frank and Minnick said in an October 29 letter.
The lawmakers sent copies to the heads of the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the National Credit Union Administration.
The
This article is only available in full to Complinet Complete North America Subscribers who are logged in.
Please log in to see if you can view this content.
