Progress Report: Movement for LaRouche's Homeowners and Bank Protection Act Is Sweeping Across the Nation
May 15, 2008 (EIRNS)This release was issued today by the Lyndon LaRouche Political Action Committee (LPAC).
While Congress continues to flap its jaws about the so-called housing crisis, resolutions demanding the measures outlined in Lyndon LaRouche's Homeowners and Bank Protection Act (HBPA) resolution have either passed, or been introduced into, over 116 local jurisdictions in the United States over the past six months. Even where representatives of LaRouche's Political Action Committee are not present, the disintegration of the banking system and the soaring number of housing foreclosures, which are a byproduct of the banking collapse, are impelling municipalities around the nation to turn to the HBPA as a firewall to protect their communities.
LaRouche's resolution, first proposed in August of 2007, urges the enactment of a Congressional bill to declare a moratorium on all foreclosures, while allowing housing prices to deflate down to pre-bubble prices, perhaps for years to come. Homeowners will be able to keep their homes, while paying lower rates until mortgages are reset drastically lower. Simultaneously, all federal and state chartered banks, not hedge funds or brokerage firms, will be placed under federal protection and allowed to remain open for all normal business and personal banking operations. However, all speculative paper, including mortgage-backed securities and derivatives, will be written off.
This resolution calling upon Congress to endorse such a policy has passed five state legislatures, including Rhode Island (both houses), Kentucky (Senate), Mississippi (House), Alabama (both branches), and Vermont (House). It has been introduced in 15 other states, including New York, Pennsylvania, Michigan, and Missouri, all states hard hit by the crisis. In addition, it has passed in 84 cities, including major cities like Philadelphia, Providence, Detroit, St. Louis, Indianapolis, Akron, Pittsburgh, and Newark.
In many states, resolutions calling for Congress to pass the HBPA have passed in multiple jurisdictions. In Pennsylvania, 38 urban locales have endorsed the resolution. In Ohio, eight cities have passed the HBPA, and four more are debating it. In Michigan, seven cities have passed it, and in New Jersey, six. Five have endorsed it in Texas, and five also in Indiana.
The resolution is inspired by similar actions undertaken by states and the Congress during the Great Depression. Upon taking office in 1933, President Franklin Roosevelt immediately placed the entire banking system under federal supervision, and during the first 100 days of the New Deal, he invoked the General Welfare principle of the Constitution and passed emergency legislation protecting homeowners and farmers from foreclosure. The Congress can, and must, invoke that same principle today.
Over recent weeks, opponents of the HBPA, who call for bail-outs of the mortgage securities market in the name of helping homeowners, have surfaced in various local jurisdictions, urging passage of counter-legislation. These bills, modelled on the Barney Frank bail-out schemes being put forward in the Congress, are both toothless and counterproductive, since they call for voluntary action in reducing foreclosures, and seek to support the collapsed mortgage securities market, by only marking down mortgages by 15% or so. Obviously, these fraudsters are beginning to feel the pressure from the movement for the HBPA.
This press release is being accompanied by Model Legislation for use by state or local elected bodies, as well as sample copies of resolutions that recently passed cities and states.