WASHINGTON — The three leading presidential candidates said Monday that they support modernizing regulation of the financial world but that the long-term plan that Treasury Secretary Henry Paulson outlined Monday mustn't substitute for dealing with the immediate fallout from home foreclosures.
Democratic Sens. Hillary Clinton and Barack Obama were more pointed than Republican Sen. John McCain; they called Paulson's plan inadequate and criticized the Bush administration for allowing the mortgage crisis to occur.
McCain said in a statement that his campaign released, "This long overdue regulatory reform is necessary to regain the trust of the American investor," and that the current crisis is "a classic case of special interests preserving outdated agencies at the expense of the public good."
Still, McCain indicated that he expects Congress to produce its own overhaul, not just adopt the Bush administration's proposals.
Here's what the presidential candidates said about the Paulson plan:
HILLARY CLINTON
Clinton released a six-point plan and said that appointing regulators "who are committed to enforce new and existing rules" is as important as reorganizing oversight agencies.
Clinton supports legislation that would subject all mortgage originators to the same regulations as banks, including minimum licensing, supervision and capital requirements.
She called for a new, affirmative duty on mortgage originators to determine a borrower's ability to repay. She wants more transparency and oversight for "exotic" financial products such as complex derivatives, and more conflict-of-interest rules for ratings agencies.
Clinton also supports a second $30 billion economic-stimulus package.
BARACK OBAMA
Obama supports creating a financial market oversight commission, giving the Federal Reserve basic supervisory authority over all institutions that are eligible to receive credit from it and strengthening capital requirements for mortgage securities.
Obama wants to "regulate institutions for what they do, not what they are," such as the companies that aren't commercial banks or thrifts yet provided subprime mortgages.
He also supports a second $30 billion economic-stimulus package.
JOHN MCCAIN
McCain said he needed to study the Treasury Department plan further, but that he found worthy of consideration the administration's recommendation to create a Mortgage Origination Commission that would evaluate states' systems for licensing and regulating the mortgage origination process.
He also supports "steps for additional transparency and accountability" to accompany the Fed's moves to inject capital into troubled institutions.
ON THE WEB
Clinton's six-part proposal.
Obama and McCain had nothing on their Web sites about the financial regulation proposal.
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