Financial regulation

by Jeremy Leaming

Despite the lofty rhetoric to the contrary, the Obama administration has failed to help the scores of Americans thrown out of their homes because of rampant foreclosure fraud. The administration instead chose to try to put a sheen of due diligence on a federal effort to get to the bottom of what David Dayen for Salon calls “the largest consumer fraud in the history of the United States.”

With the nation’s economy still hobbled by high unemployment and a growing gap between the superwealthy and everyone else, the U.S. Treasury Department recently revealed a pathetic settlement with some of the shady bankers behind the criminal foreclosure schemes that fails to provide little if any help to the millions of victims of the tawdry financial machinations. Part of the problem, as Dayen reports, centers on the fact that the federal government allowed consultants hired by banks to conduct so-called independent reviews of millions of foreclosures. The consultants, Dayen continues, made millions and only completed a tiny portion of “independent reviews” requested by scores of aggrieved homeowners. When the Treasury settled with the bankers it announced the “vast majority" of borrowers  – 3.4 million -- will receive paltry sums, like $300 or less.

But the Treasury Department’s Office of Comptroller of the Currency (OCC) likely didn’t expect U.S. Senators to dig much into the obviously overblown and flawed review of the millions of foreclosure victims. And they likely were not expecting Elizabeth Warren, one of the nation’s most recognizable and passionate spokespersons on behalf of the middle class, to be holding a U.S. Senate seat and a committee position to zero in on their woefully or intentionally inept handling of the foreclosure crisis. 

But last week, Sen. Warren (D-Mass.), former Harvard Law School Professor, longtime consumer rights advocate and driving force behind the creation of the Consumer Financial Protection Bureau did just that. And it was not the first time the senator has used her platform to highlight the federal government’s bungling of the foreclosure crisis. Last week, as TPM’s Sahil Kapur reported Warren has in just a few months in the Senate “seized opportunities to highlight questionable banking practices an ostensibly lax regulatory response, a chamber frequently criticized for its coziness with Wall Street.”

During a subcommittee hearing Warren, who as Dayen notes has “a grass-roots army of enthusiastic supporters” and “makes headlines crossing the street,” blasted the OCC regulators for “withholding information they said they possessed about improper foreclosures or other abusive financial practices from victims of those practices seeking recourse in court,” Kapur reported.

The regulators told Warren they had not made a decision about what information they will make public about criminal foreclosures.

“So you have made a decision to protect the banks but not a decision to tell the families who were illegally foreclosed against?” Warren asked the regulators.

by Jeremy Leaming

It can be difficult to follow with great interest the machinations in the nation’s capital, especially with divisive, often ridiculous debates that unfold and then are taken to a whole new level by loud pundits dominating airwaves. But when cynicism sets in, as it has within parts of my family, there’s almost no room for serious, calm conversation about policy that is actually being advanced in the confines of the beltway.

Over the winter break I had the great fortune of seeing three of my brothers, two of whom I rarely get to see anymore. One brother, who has veered from libertarianism to socialism, has written off the entire political process. President Obama is a tool of Wall Street, it would not have mattered had Mitt Romney won the White House, they both represent the same interests, he would say. He scoffed at the Affordable Care Act – no public option, no expansion of health care to the needy – and at the extension of unemployment benefits that has occurred under the Obama administration’s watch. In my brother’s mind the entire system was bought by big corporations a long time ago and they pull all the strings of both major political parties. But I wasn’t all that surprised – he’s been regurgitating the late comedian George Carlin’s stinging, though simplistic, lines about a broken American government for many years now.

The reality is that the American political process is messy, incredibly divisive and often terribly exhaustive and inadequate. But the constant carping about how bad politicians are is also tiring and irrelevant. When hasn’t our democracy been a messy, maddening affair? Sure there have been respites, but they often don’t last long. It’s a fairly large country, and regardless of Carlin’s jabs, we do and have had some remarkable politicians and heroic leaders for equality and civil rights.

And regarding the Obama administration’s first term, a little research would reveal that it is wildly over-the-top to blast it as a tool of big business. As The American Prospect’s Jamelle Bouie notes, Obama’s first two years in office “are a good case study of what happens when Democrats have control of the federal government – they try to expand it. In those two years, Democrats greatly expanded the welfare state with a new, quasi-universal health-care program, funneled hundreds of billions of dollars to infrastructure and clean energy research, and implemented a host of new financial regulations. There’s a reason Time correspondent Michael Grunwald called his book on the stimulus The New New Deal – in both size and scope, the activity of Obama and the 111th Congress resembled that of FDR’s first term.”