PRESIDENT OBAMA’S SECOND VETO…. Shortly before adjourning, Congress quietly passed a housing measure, which some homeowners advocates warned would “make it more difficult to challenge improper foreclosure attempts by big mortgage processors.” The provision was pushed by far-right Rep. Bob Aderholt (R-Ala.), and it’s still not altogether clear how the bill managed to be approved with so little debate.
There’s been some disagreement about the scope and effects of the bill, but yesterday’s Reuters report alarmed consumer advocates, who said the legislation “protect bank and mortgage processors from liability for false or improperly prepared documents.”
This afternoon, the White House announced this will be only the second presidential veto since Obama took office.
The Interstate Recognition of Notarizations Act of 2010 was designed to remove impediments to interstate commerce. While we share this goal, we believe it is necessary to have further deliberations about the intended and unintended impact of this bill on consumer protections, including those for mortgages, before this bill can be finalized.
Notarizations are important for a large range of documents, including financial documents. As the President has made clear, consumer financial protections are incredibly important, and he has made this one of his top priorities, including signing into law the strongest consumer protections in history in the Wall Street Reform and Consumer Protection Act. That is why we need to think through the intended and unintended consequences of this bill on consumer protections, especially in light of the recent developments with mortgage processors.
The authors of this bill no doubt had the best intentions in mind when trying to remove impediments to interstate commerce. We will work with them and other leaders in Congress to explore the best ways to achieve this goal going forward.
Or to rephrase the White House’s reaction, “Wait, the bill may do what? We’re going to make foreclosures easier? Forget it.”
Ellen Bloom, the director of federal policy for Consumers Union, told Jake Tapper, “President Obama is doing the correct thing by vetoing this bill. With the flood of apparent improper foreclosures, this is no time to change the rules to weaken the safeguards of the notary process. This bill would make a bad situation worse when it comes to foreclosure fraud.”
Postscript: If you’re wondering, the first Obama veto came late last year, when the president “killed a short-term resolution that turned out to be unnecessary for extending defense funding.”