The Federal Deposit Insurance Corporation's plan to help struggling homeowners avoid foreclosure is "gaining ground and support" among industry leaders Chairman Sheila Bair said Wednesday. Speaking at a New America Foundation conference in Washington, D.C. Bair said that much work is left to be done but that regulators need to focus their full attention on stemming the tide of foreclosures.
In her prepared remarks Bair defended the Community Reinvestment Act, legislation designed to encourage banks to lend to low-income borrowers. The legislation has been cited as a cause of the financial crisis, an accusation Bair said is unfair and not at all accurate.
"Only about one-in-four higher-priced first mortgage loans were made by CRA-covered banks during the hey-day years of subprime mortgage lending (2004-2006)," she said in prepared remarks. "The rest were made by private independent mortgage companies and large bank affiliates not covered by CRA rules."
Although she noted that CRA "isn't perfect," Bair said that on the whole the legislation "works."
On the housing crisis, Bair said that federal regulators need to use our authority and clout to stop" the bleeding. Getting the country out of the foreclosure crisis must be the top priority, Bair said.
Despite their efforts, she said that regulators are "still very much behind the curve."
The FDIC proposal could help 1.5 million families avoid foreclosure using $24 billion in funds from the $700 billion financial rescue package, Bair said. The program has met resistance within the Bush administration, particularly with Treasury Secretary Henry Paulson. However, Bair said her program is "gaining ground and support."
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.