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Wednesday, March 14, 2007

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WASHINGTON -- U.S. Senate Banking Committee Chairman Christopher Dodd said Wednesday that regulators are accountable for problems in the subprime mortgage sector and that he plans to call them before the committee for questioning.

Regulators "bear some responsibility for responding to how we got to this point," Dodd told reporters after speaking at a U.S. Chamber of Commerce conference on market competitiveness.

"That's what's made me angry here - that the regulators apparently have not been doing as good a job as I think they should have been doing. But we'll know the answer to that question as we bring them before the committee," said the Connecticut Democrat.

Dodd said he has not set a date for a hearing.

The riskiest segment of the U.S. mortgage market, which serves borrowers with poor credit histories at high interest rates, has seen rising default rates in recent months amid falling prices and slower sales in the housing market.

At least 20 lenders in the subprime mortgage sector have gone out of business as a result.

U.S. Securities and Exchange Chairman Christopher Cox, speaking on the sidelines at the same event, said the SEC is not a front-line regulator for the subprime lending industry but is "interested as well."

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"It is impossible for there to be significant issues in one area of our capital markets that don't wash over more generally to the rest," he said.

The SEC has opened a preliminary investigation into New Century Financial Corp., the largest independent U.S. subprime mortgage lender, the company said on Monday.

Cox would not comment on whether the investor protection agency is conducting targeted enforcement in the industry, saying: "I think it's best to read our actions."

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