Johnson Plans Resolution in Response to Credit, Banking Crisis

In response to increasingly poor economic indicators and a nationwide credit and mortgage crisis, a resolution filed by Sen. Constance Johnson and Rep. Jabar Shumate will encourage Congress to enact the Homeowners and Banks Protection Act (HBPA). Johnson filed a similar resolution in April, when economists were warning of an impending credit crunch and collapse in the housing market, but the Legislature failed to act on the proposal.

Senate Concurrent Resolution 1 will urge Congress to enact legislation that would freeze foreclosures, halt evictions and appropriately lower mortgages and payments. The Oklahoma City Senator described the Act as the best way to deal with an ongoing economic crisis currently devastating the banking system as a whole. Johnson said the problem is not limited to subprime mortgage lending, but is broader in scope.

“In addition to struggles with foreclosure, families are faced with inflation and significant price increases for the most basic necessities,” said Johnson, D-Oklahoma City. “We should be doing everything in our power to encourage the government to take action now and protect our families as well as banks, which face unique challenges of their own in a credit crisis. Now that we fully understand the seriousness of the problem, I think it’s time for the Legislature to make a statement and let Oklahoma families know that we’re in their corner.”

Johnson said the HBPA would protect federal and state chartered banks, keeping them open for investments in agriculture, industry and infrastructure while eliminating increasingly large amounts of speculative debt. As introduced in 2008, prior to this past summer’s bailouts, the Act forbids entirely any bailouts and all inflationary money printing to speculators and investment banks. Forcing the taxpayers to shoulder the burden of Wall Street’s losses, Johnson said, is simply irresponsible leadership.

Shumate said Oklahomans must demand that their leaders take action now, as foreclosures are on the rise with 1 in 58 homes currently in foreclosure in Oklahoma City alone.

“We can’t sit idly by and watch this situation deteriorate further without taking action to protect our citizens,” said Shumate, D-Tulsa. “We’ve learned our lesson from previous economic crises, and now it’s time for us to prevent this from becoming an even greater problem for families and business owners. If we don’t act soon, we increase the potential for a very serious economic collapse.”

Similar resolutions have already been approved by state legislatures in Alabama and Rhode Island.

Additionally, resolutions supporting the Homeowners and Bank Protection Act have been approved by numerous cities throughout the country.

Senate Concurrent Resolution 1 will be available for consideration in the upcoming 2009 legislative session, and will likely be assigned to the Senate Finance Committee.