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"And you're not going to tell the homeowners?" Elizabeth Warren to Fed and OCC, Senate hearing highlights

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Elizabeth Warren, yesterday:

Hearing: Outsourcing Accountability? Examining the Role of Independent Consultants

Senate Committee on Banking, Housing and Urban Affairs, Subcommittee on Financial Institutions and Consumer Protection

Hearing info here.

The 2-1/2 hour hearing video is here.

Two videos, with transcripts, below:

* * *

Banking Committee Hearing – Illegal Foreclosures
YouTube posted by Elizabeth Warren
Apr 11, 2013
Length: 4:02 minutes

Transcript

Sen. Elizabeth Warren (D-MA): Thank you, Mr. Chairman, and thank you very much for holding this hearing. Thank you, Mr. Stipano and Mr. Ashton, for coming here today. You know, over the last few months, Congressman Elijah Cummings and I have requested documents from your agencies regarding the basic data and the processes of the Independent Foreclosure Review. We made 14 specific requests to you in January, and despite multiple letters back and forth and multiple meetings you have provided only one full response, three partial or minimal responses, and no response to nine of our requests. You have provided little specific information on what the review actually found, such as the number of improper foreclosures, the amount and number of inflated fees, or the extent of abusive practices by each of the mortgage servicers. So I’m hoping in this hearing to give you an opportunity to provide us with some greater clarity than you’ve thus far offered in our meetings and our correspondence. Thank you.

- jump cut -

Warren: You now have evidence in your files of illegal activity, I take it, for some of these banks. I get that from the evidence you’ve released about the charts, who’s going to get paid what, so if someone believes that they have been illegally foreclosed against, will they still have a right under this settlement to bring a lawsuit against the bank?

Daniel Stipano, Deputy Chief Counsel, OCC: Yes.

Warren: All right. Now, if a family wants to bring a lawsuit, you’re both lawyers, would it be helpful, if you’re going against one of these big banks, would it be helpful for these families to have the information about their case that’s in your files. Mr. Ashton?

Richard Ashton, Deputy General Counsel, Federal Reserve: It would be helpful, obviously, to have information related to the injury, yes it would.

Warren: Okay. So, do you plan to give the families this information? That is, those families that have been victims of illegal foreclosures, will you be giving them the information that’s in your possession about how the banks illegally foreclosed against them? Mr. Ashton?

Ashton: I think that’s a decision that we’re still considering. We haven’t made a final decision yet.

Warren: So you have made a decision to protect the banks, but not a decision to tell the families who were illegally foreclosed against?

Ashton: We haven’t made a decision about what information we would provide to individuals, that’s true, yes.

Warren: Mr. Stipano?

Stipano: Same position.

Warren: So, I just want to make sure I get this straight. Families get pennies on the dollar in this settlement for having been the victims of illegal activities or mistakes in the bank’s activities. You let the banks – and you now know individual cases where the banks violated the law, and you’re not going to tell the homeowners, or at least it’s not clear yet whether or not you’re going to do that?

Ashton: We haven’t made a decision on what we’re going to tell the homeowners.

Warren: You know, I just have to say. I thought this was about transparency. That’s what this is all about. People want to know that their regulators are watching out for the American public, not for the banks. And the only way that we can evaluate whether or not you’re doing your job is if you make some of this information publicly available. And so far, you’re not doing that. And without transparency, we can’t have any confidence either in your oversight or that the markets are functioning properly at all. So, and that people are going to receive proper compensation for what went wrong.

* * *

Elizabeth Warren takes on the regulators
YouTube posted by ThinkProgress TP (some overlap with prior)
Apr 11, 2013
Length: 5:08 minutes

Transcript

Sen. Elizabeth Warren: Let me just make sure I understand this completely. I want to know on a bank-by-bank basis the number of families that were illegally foreclosed on. Will you give me that information?

Daniel Stipano, Deputy Chief Counsel, OCC: Eventually we're going to issue a statement to the public where we provide additional information, but if we go through the processes that I described previously, we can share it to Congress in its oversight capacity.

Warren: So you’re saying you will make that information publicly available?

Stipano: I did not say that. I said that we're planning on issuing a public statement that wraps up the IFR and provides additional information.

Warren: That’s not what I’m asking you for.

Stipano: Yeah.

Warren: What I’m asking for is a bank-by-bank analysis of how many families they illegally foreclosed on. Will you give us that information?

Stipano: We can provide that to Congress in its oversight capacity if we go through the normal processes that we’re prepared to follow.

Warren: And why are you not making that public? I just want to make sure I understand.

Stipano: I don’t know there’s been a decision not to. I think that we’re still evaluating what we’re going to release publicly.

Warren: Are you claiming that the information about illegal activity is privileged and confidential?

Stipano: It’s all part of the con– it is all confidential supervisory information, but that does not mean that we won’t at some point release some of that information. That decision just hasn’t been made at this point.

Warren: So you’re saying when you find evidence of illegal activities –

Stipano: Yes.

Warren: – by the banks –

Stipano: Yes.

Warren: – when they have illegally foreclosed –

Stipano: Yes.

Warren: – against homeowners, that that information is privileged and you will not release it without a letter from Congress.

Stipano: If it is derived from the bank examination process, yes, it is privileged...

Warren: How else will you get it?

Stipano: Well, sometimes you get information through third parties, through outside sources, but in this case that’s not the case.

Warren: So unless someone throws a rock through the window with this information tied to it, you will not release it, is that what you’re saying?

Stipano: To the extent that the information is confidential supervisory information derived from the exam process, it is subject to privilege. We don’t ordinarily make that public. However, in this case, we do plan on making public issuances describing further findings and further analysis of the process.

Warren: On a bank-by-bank basis of illegal activity?

Stipano: I don’t know if that’s been determined yet.

Warren: All right, so let me ask it from the other point of view. You now have evidence in your files of illegal activity, I take it, for some of these banks. I get that from the evidence you have released about the charts, who’s going to get paid what, so if someone believes that they have been illegally foreclosed against, will they still have a right under this settlement to bring a lawsuit against the bank?

Stipano: Yes.

Warren: All right. Now, if a family wants to bring a lawsuit, you’re both lawyers, would it be helpful, if you’re going against one of these big banks, would it be helpful for these families to have the information about their case that’s in your files. Mr. Ashton?

Richard Ashton, Deputy General Counsel, Federal Reserve: It would be helpful, obviously, to have information related to the injury, yes it would.

Warren: Okay. So, do you plan to give the families this information? That is, those families that have been victims of illegal foreclosures, will you be giving them the information that’s in your possession about how the banks illegally foreclosed against them? Mr. Ashton?

Ashton: I think that’s a decision that we’re still considering. We haven’t made a final decision yet.

Warren: So you have made a decision to protect the banks, but not a decision to tell the families who were illegally foreclosed against?

Ashton: We haven’t made a decision about what information we would provide to individuals, that’s true, yes.

Warren: Mr. Stipano?

Stipano: Same position.

Warren: So, I just want to make sure I get this straight. Families get pennies on the dollar in this settlement for having been the victims of illegal activities or mistakes in the bank’s activities. You let the banks – and you now know individual cases where the banks violated the law, and you’re not going to tell the homeowners, or at least it’s not clear yet whether or not you’re going to do that?

Ashton: We haven’t made a decision on what we’re going to tell the homeowners.

Warren: You know, I just have to say. I thought this was about transparency. That’s what this is all about. People want to know that their regulators are watching out for the American public, not for the banks. And the only way that we can evaluate whether or not you’re doing your job is if you make some of this information publicly available. And so far, you’re not doing that. And without transparency, we can’t have any confidence either in your oversight or that the markets are functioning properly at all. So, and that people are going to receive proper compensation for what went wrong.

* * *

Think Progress's story is here.

Update: Excellent comment by Jackrabbit on Naked Capitalism expands hearing highlights beyond just the two YouTubes. More hearings coming.

h/t Pam Martens on the bombshell at the end of the hearing that it was the banks, not the supposedly independent foreclosure review consultants, who decided who was harmed and what to pay the victims. Promontory, Pricewaterhouse Coopers and Deloitte & Touche all denied having anything to do with or oversight of the one-page payment agreement schedule (PDF). With transcript: http://wallstreetonparade.com/2013/04/elizabeth-warren%E2%80%99s-foreclo...

h/t kravitz on Daily Kos, who has notes and highlights for the whole hearing: http://www.dailykos.com/story/2013/04/11/1200979/-Elizabeth-Warren-Gets-...

Ben Hallman's report on the hearing for Huffington Post is here.

This hearing is not closed yet. Sherrod Brown said record will be held open for a week for other senators to ask questions of and have answers submitted by the witnesses.

Next hearing will be Wednesday, 4/17/13, 10a-12p, Helping Homeowners Harmed by Foreclosures: Ensuring Accountability and Transparency in Foreclosure Reviews, Part II, witnesses Lawrance Evans (GAO) and Joseph Smith (nat’l mortgage settlement monitor).

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