South Carolina General Assembly
118th Session, 2009-2010

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Bill 3403

Indicates Matter Stricken
Indicates New Matter

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)



Whereas, the onrushing financial crisis engulfing home mortgages, debt instruments of all types, and the banking system of the United States threatens to set off an economic depression worse than the 1930s; and

Whereas, millions of American citizens are threatened with foreclosure and loss of their homes over the upcoming months, according to studies released by Realty Trac and Moody's; and

Whereas, this financial crisis is now threatening the integrity of both state and federally chartered banks, as typified by the run on deposits of Countrywide Financial in California during the month of August 2007; and a banking collapse would wipe out the life savings of American citizens, and drastically undermine the economic stability of our states and cities; and

Whereas, in a similar financial crisis in the 1930s, President Franklin D. Roosevelt intervened to protect banks and homeowners; for example, in April 1933, he introduced legislation as a "declaration of national policy ... 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 ...". Now, therefore,

Be it resolved by the House of Representatives, the Senate concurring:

That the members of the South Carolina General Assembly, by this resolution, do hereby endorse the Homeowners and Bank Protection Act of 2007. This crisis is such that it requires emergency action that only the United States Congress has the capability to enact. Congress shall move quickly to keep people in their homes and avert social chaos. Congressional action must include the following provisions:

(1)    Congress shall establish a federal agency to place the federal and state chartered banks under protection, freezing all existing home mortgages for a period of months or years which would be required to adjust the values to fair prices, and restructure existing mortgages at appropriate interest rates. Further, this action would also write off all of the speculative debt obligations of mortgage-backed securities, derivatives, and other forms of Ponzi Schemes that have brought the banking system to the point of bankruptcy.

(2)    During the transitional period, all individual homeowner foreclosures must be frozen, allowing American families to retain their homes. Monthly payments, the equivalent of rental payments, must be made to designated banks, which can use the funds as collateral for normal lending practices, thus recapitalizing the banking systems. Ultimately, these affordable monthly payments will be factored into new mortgages, reflecting the deflating of the housing bubble, and the establishment of appropriate property valuations, and reduced fixed mortgage interest rates. This adjustment will take several years to achieve. In the interim period no homeowner must be evicted from his or her property, and the federal and state chartered banks must be protected so that they may resume their traditional functions, serving local communities, and facilitating credit for investment in productive industries, agriculture, infrastructure, and other prudent financing needs.

(3)    State governors shall 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.

Be it further resolved, that a copy of this resolution be forwarded to members of the South Carolina Delegation to Congress and also be delivered to the President of the United States for immediate implementation.


This web page was last updated on February 3, 2009 at 12:36 PM