CCH Financial Reform News Center

Bachus Calls for Bank of America Hearings

This story appeared in Bank Digest.

Financial Services Committee Ranking Member Spencer Bachus, R-Ala., has written a letter urging Chairman Barney Frank, D-Mass., to hold hearings examining the allegations that Bank of America's Chief Executive, Ken Lewis, was directed by the Federal Reserve Chairman and the former Treasury Secretary to remain quiet, or risk being terminated, leading up to Bank of America's government-brokered takeover of Merrill Lynch. As recently reported by the Wall Street Journal, “Federal Reserve Chairman Ben Bernanke and then-Treasury Department chief Henry Paulson pressured Bank of America Corp. to not discuss its increasingly troubled plan to buy Merrill Lynch & Co.—a deal that later triggered a government bailout of BofA—according to testimony by Kenneth Lewis, the bank's chief executive.” Bachus wrote that “Government ownership and management of the private sector does not work and it is time that we extracted ourselves from the cycle of multi-billion dollar tax-payer funded bailouts.”

Need for Credit Card Reform Discussed

This story appeared in Bank Digest.

Treasury Secretary Timothy Geithner met with consumer groups, civil rights leaders and credit card consumers to discuss the national need for credit card reform on April 20. The discussion centered on the House Bill, Credit Card Holders Bill of Rights of 2009 (H.R. 627) which would significantly strengthen consumer protections in the credit card market. According to Geithner, “Over the past three months, the Obama Administration has aggressively worked to get our credit markets flowing, get our economy back on track and get Americans back to work.” Commenting on Geithner's discussion, Roxana Araujo, Hollywood Fla., stated that “I feel like until now ordinary Americans have had no protection.” Senator Christopher Dodd, D-Conn., also commented, stating that now “is the time to stand up for American consumers and force real reforms.”

PPIP Fund Manager Applications Received

This story appeared in Bank Digest.

The Treasury Department has announced the receipt of more than 100 unique applications from potential fund managers interested in participating in the Legacy Securities portion of the Public Private Investment Program (PPIP). A variety of institutions applied, including traditional fixed income, real estate and alternative asset managers. The Treasury expects to inform applicants of their preliminary qualification around May 15, 2009.

Home Affordable Modification Program Agreement Released

This story appeared in Bank Digest.

The Treasury Department has posted the latest Commitment to Purchase Financial Instrument and Servicer Participation Agreement for the Home Affordable Modification Program Under the Emergency Economic Stabilization Act of 2008. The agreement entered into by Carrington Mortgage Services LLC is the first step servicers need to take to participate in the Home Affordable Modification Program for loans that are not owned, securitized or guaranteed by Fannie Mae or Freddie Mac.

Mortgage Reform, Anti-Predatory Lending Bill Advances in House

By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter, April 30, 2009.

Legislation to curb abusive and predatory lending passed the House Financial Services Committee by a 49 to 21 vote, and is expected to go before the House of Representatives as soon as next week.

H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act of 2009, would block many industry practices that were a hallmark of the subprime lending boom.

Aguilar Discusses Regulatory Reform and Independent Directors

This story appeared in SEC Today

Commissioner Luis Aguilar talked about the SEC's role in regulatory reform, the role of a systemic regulator and the role of independent directors in a speech at a recent independent directors conference workshop in Boston. Aguilar maintained that the SEC's role is more critical than ever and that its mission is a necessary foundation to the financial system. As a result of the financial crisis, the entire regulatory structure seems to be on the table, he said. Aguilar believes that the crisis presents an opportunity to develop a more robust financial regulatory system. His remarks are posted on the SEC's Web site.

Bachus Questions Mortgage Legislation

This story appeared in Bank Digest.

In an op-ed column published in the Washington Times, House Financial Services Committee Ranking Member Spencer Bachus, R-Ala., questioned many of the provisions of recently proposed mortgage legislation. Bachus stated that H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act, would “further limit options for homebuyers and could freeze an already chilled mortgage market.” Among the criticisms Bachus leveled at the bill are that it would: expose mortgages to litigation risk by offering liability protections to certain 30-year fixed-rate mortgages; encourage excessive litigation by creating a $140 million-dollar foreclosure-related legal assistance fund; and fail to define the mechanics by which market participants will be required to retain a 5 percent stake in each loan that does not qualify for liability protection.  http://republicans.financialservices.house.gov/index.php?option=com_content&task=view&id=514&Itemid=43

House Oversight Committee Demands SEC, DOJ Release AIG Reports

This story appeared in Bank Digest.

Government Reform Chairman Edolphus Towns, D-N.Y., and Ranking Member Darrell Issa, R-Calif., are once again requesting that the United States Department of Justice and the Securities and Exchange Commission provide the Committee with confidential reports prepared by Mr. James Cole, a lawyer with Bryan Cave LLP, who was hired by American Insurance Group (AIG) to independently monitor the business practices of the insurance company and periodically deliver reports concerning his oversight of AIG to federal regulators. 

News Release: http://oversight.house.gov/story.asp?ID=2411

Letter to SEC Chairman Mary Schapiro: http://oversight.house.gov/documents/20090428120920.pdf

Letter to Attorney General Eric Holder:  http://oversight.house.gov/documents/20090428121052.PDF

FHFA Sends GSE Housing Goals to Federal Register

This story appeared in Bank Digest.

The Federal Housing Finance Agency sent a proposed rule establishing 2009 housing goals for government sponsored entities (GSEs) Fannie Mae and Freddie Mac to the Federal Register for publication. Under the proposed rule, loan modifications undertaken by the GSEs consistent with the Administration’s loan modification initiative would receive credit toward achievement of housing goals. Describing the necessity for the new goals, FHFA Director James B. Lockhart stated,  “Restrictions on the availability of private mortgage insurance for borrowers with lower down payments, a surge in refinancing, particularly by higher income borrowers, the increasingly important role of FHA in the mortgage marketplace and a slowdown in the multifamily market, among other factors, mean fewer goals-qualifying loans in 2009.”

News Release: http://www.fhfa.gov/webfiles/2139/HousingGoalsFedReg42809Final.pdf

Proposed Rule:  http://www.fhfa.gov/webfiles/2138/2009EntHsgGoalsMission42809F.pdf

Technical Description of the Estimated Size of the Conventional Mortgage Market. http://www.fhfa.gov/webfiles/2137/MortgageMarket200942709.pdf

Fed Releases Periodic Report Pursuant to EESA

This story appeared in Bank Digest.

The Federal Reserve Board issued a report as required under Sec. 129(b) of the Emergency Economic Stabilization Act of 2008 (EESA) detailing the outstanding lending facilities authorized by the Fed under Sec. 13(3) of the Federal Reserve Act. The facilities included in the report are: (1) Term Securities Lending Facility; (2) Primary Dealer Credit Facility; (3) Commercial Paper Funding Facility; (4) Term Asset-Backed Securities Loan Facility; (5) Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility; (6) Loan to Maiden Lane LLC to facilitate the acquisition of The Bear Stearns Companies, Inc. by JPMorgan Chase Co., Inc.; and (7) Lending facilities established for American International Group,  Inc.. http://www.federalreserve.gov/monetarypolicy/files/129periodicupdate02252009.pdf