Donald Lambro
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WASHINGTON -- There are good reasons to slow the rush by Senate Democrats to pass a bureaucracy-heavy financial regulation bill just to hand President Obama another legislative trophy in a tough election year.

Chief among them is to give the Financial Crisis Inquiry Commission a chance to complete its work and report back on the factors that led to the devastating subprime mortgage debacle that triggered the long recession we're slowly coming out of now.

Usually, in such cases, Congress conducts an exhaustive inquiry that is followed by a fact-filled report on what happened and why, with detailed recommendations on how to prevent such calamities in the future.

In this case, the White House and Democratic leaders are going ahead with what appears to be legislative overkill while the federal commission is in midstream, taking testimony, collecting facts and digging into the reasons the vast regulatory apparatus we have now didn't work.

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"Look at the commission that was established on the Great Depression. They found the causes first, and then Congress legislated based on those findings," says Heritage Foundation financial analyst David C. John. "In this case, the legislation comes first and the rationale for the legislation comes after."

This panel was created by Congress last year to get the answers to a lot of questions that key legislative committee chairmen were not asking as the financial industry plunged headlong into a disaster of its own making that it should have seen coming.

It is more than a little ironic that the lawmaker who wrote the bill now pending in the Senate is Chris Dodd, D-Conn., chairman of the Banking, Housing and Urban Affairs Committee, which has chief jurisdiction over the financial industry.

A lot of people in Congress and in the regulatory agencies were asleep at the switch in this case, but none slept more soundly than Dodd. He was wide awake when he needed a couple of low-rate mortgages that he got through his pals in the industry, but he didn't have much time for his regulatory oversight responsibilities while he took a year off to run for the presidency.

There were some basic reasons behind the subprime home-mortgage catastrophe: Banks abandoned decades of credit standards; allowed small or nonexistent down payments and little income documentation; and often did not fully inform adjustable-rate mortgage (ARM) customers of sky-high interest rate resets to come.

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Donald Lambro

Donald Lambro is chief political correspondent for The Washington Times.