Washington Mutual--friends Of The Family No More

Floor Speech

Mr. LARSEN of Washington. Mr. Speaker, last week's Senate hearings on the failure of Washington Mutual painted a picture of a bank that sold risky mortgages to unsuspecting homeowners in order to rake in huge profits. Federal regulators turned a blind eye to these risky practices and allowed Washington Mutual to gamble with our future.

Now, when I grew up in Arlington, Washington, Washington Mutual was known as a friend of the family. But their reckless behavior at the expense of consumers helped bring about the greatest financial crisis of our time. It was the largest bank failure in U.S. history and resulted in thousands of job losses in Northwest Washington State. Friend of the family no more.

Federal regulators as well were asleep at the switch while Washington Mutual made tens of thousands of risky loans. Consumers suffered as big banks put the interests of big profits and big bonuses ahead of working families.

Now, last week, we hear that the Securities and Exchange Commission filed a lawsuit against Goldman Sachs alleging misdealings in the mortgage securities collateralized debt obligation market. And today the House holds hearings on the fall of Lehman Brothers and the huge negative impact on middle class families from whom the risk seemed to be hidden.

These revelations and the Washington Mutual hearings and the Inspectors General report provide a sobering reminder of the urgent need for financial regulatory reform. We must prevent a crisis like this from happening again by imposing strong oversight of financial firms like Washington Mutual, and protecting American consumers and American taxpayers from unfair and abusive financial products like those in Washington Mutual's risky mortgages.

So I urge the Senate to act quickly and pass financial regulatory reform so that the House and the Senate can get together to come up with an even stronger bill, and so that financial firms like Washington Mutual, that, in the future, if they want to drive off the cliff, they may be free to do so, but no longer will American families be trapped in the car as an innocent passenger.

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