Melvin Watt: “But I think I would be remiss not to discuss the issue because of two reasons: Number one, it needs to be discussed…”

“But I think I would be remiss not to discuss the issue because of two reasons: Number one, it needs to be discussed because of the very difficult, delicate balance that the Chair has been able to walk to get us to this point; and number two, to illustrate once again that when you allow good things to happen in the marketplace, some people in the marketplace will abuse them. And trying to get the right balance to encourage good things to happen in the marketplace and not discourage that from happening opens up, sometimes, the possibility that people who are not well intentioned will engage in activities that need to be prevented. And this is the classic case of that. Basically, the bill now presumes that we meet the ability to repay a loan and provide net tangible benefit to a borrower if it is not a subprime loan. If it is a prime loan in the marketplace right now, that interest rate is 8.25 percent, so anything below that we presume to be a good loan. The market now has done this. They've made available in the market a loan that defers interest and principal. And that is a good thing for about 90 percent of the people, maybe even more than that, who have the ability to do that.”