Two weeks after House Speaker Nancy Pelosi called for the creation of an independent panel that would investigate the causes of the current financial crisis, the House of Representatives has joined the Senate in approving a financial fraud bill that authorizes such a commission.
The House vote for the fraud legislation (S 386) was 367-59, with all of the “no” votes coming from The Party of No.
The “financial markets commission” that would be created by the bill is inspired by the Depression-era congressional commission led by Ferdinand Pecora that documented the legal and ethical lapses that led to the Great Depression. According to Pelosi’s office, “this commission will produce a detailed and clear-eyed examination of what went wrong, which is needed to bring accountability to a financial system that rewards unduly risky behavior, and to help inform Congress as we move forward with common sense reforms to prevent these crises from happening in the future.”
It would be a 10-member commission, with six of the 10 selected by House and Senate Democratic leadership. It will, as it did in the Senate bill, have subpoena power. The members would be required to have “significant experience in banking, market regulation, taxation, finance, economics, housing and consumer protection.”
The bill containing the commission language would also extend federal fraud enforcement efforts to mortgage lenders and to funds financial institutions received through federal economic recovery programs. It would also increase funding devoted to fraud detection.
The bill now will go to a House-Senate conference where minor differences between the two bills will be reconciled.