The Federal Reserve Board was again the target of critics, who argued at a Senate Banking Committee hearing Thursday on the causes of the financial crisis that the central bank did not act fast enough to rein in abusive mortgage lending.
Lawmakers and several witnesses said the Fed, which finalized new mortgage rules this year, should have acted sooner.
"This crisis was entirely preventable," said Senate Banking Chairman Chris Dodd, D-Conn, who asked whether the Fed could have headed off the subprime mortgage crisis by promulgating lending regulations "just four or five years ago."
Jim Rokakis, the treasurer of Cuyahoga County, Ohio, said the Fed rule would have had an impact. "If those rules had been put in effect back in 2001 or even 2002, 2003, the outrageous lending practices... would have been prevented or would certainly have slowed down," he said.