Brown Urges Protection of Ohioans’ Pensions in Robo-Signing Settlement

This story appeared in Bank Digest.

Following the agreement with the nation’s largest banks in response to last year’s robo-signing allegations, Sen. Sherrod Brown, D-Ohio, Chairman of the Senate Subcommittee on Financial Institutions and Consumer Protection, has joined Sen. Bob Corker, R-Tenn., a member of the Senate Banking Committee, in urging the administration to “hold banks financially accountable for illegal practices and to protect the pensions of Ohio’s workers.” The federal and multistate settlement would permit servicers to pay the proposed penalty by writing down the value of mortgage-backed securities (MBS) owned by investors, including Ohio pension funds, Brown noted, without requiring servicers to reduce principal on the mortgages and second liens that they own. In a bipartisan letter to Secretary Shaun Donovan of the Department of Housing and Urban Development, Brown argued that “Ohio’s pension funds, retirement systems and universities, all heavily invested in MBS, should have a seat at the table during settlement talks.” Brown said, “Middle-class Ohioans did not cause the foreclosure crisis, and this settlement should not be paid using their money.”