(WASHINGTON) -- ABC News has learned that President Obama will not sign -– or “pocket veto” -- a bill that breezed through Congress that consumer groups warn would make it easier for banks to foreclose on homeowners.
The purpose of the Interstate Recognition of Notarizations (IRON) Act, written by Rep. Robert Aderholt, R-Al., is to streamline the recognition of notarizations across state lines. Aderholt said in a statement that the legislation “will help businesses around the nation by eliminating the confusion which arises when states refuse to acknowledge the integrity of documents notarized out-of-state. This issue continues to be a problem for businesses and individuals who engage in business across state lines.”
The bill passed the House in April and sailed through the Senate without debate at the end of September, as Congress adjourned for the fall recess.
But consumer groups and some state officials noted the legislation could have the unintended consequence of exacerbating an ugly trend of unfair home foreclosures. By requiring the acceptance of out-of-state notarizations, the bill could make it more difficult for homeowners to challenge improper foreclosure attempts.
On Thursday morning, White House officials held meetings to review the legislation, with the president ultimately deciding that however well-intentioned the bill may have been, it would create too much potential for harm to homeowners at a time of economic tough times, and in the wake of a major controversy over waves of questionable foreclosures by Bank of America, JPMorgan and other big lenders.
In December 2009, President Obama issued a “pocket veto” of a “stop gap” appropriations bill that ultimately proved unnecessary since defense funding passed in time.
Copyright 2010 ABC News Radio