Consumer protection agency will fail

Our story begins with the Federal Reserve Board (the “Fed”), which
had the statutory power, starting in 1994, to curb lax lending not only for
depository institutions, but for all lenders across-the-board. It declined to
exercise that power in any meaningful respect, however, until after the
nonprime mortgage market collapsed. Part of the fault lies with the Fed’s
supervisory process and part of it is due to the Fed’s ideological blinders to
needed regulatory reforms.

As for the Fed’s ideological blinders, the Board had the statutory
power to impose significant underwriting controls on depository and
nonbank lenders alike, but declined to exercise that power until it was too
late. This power consisted of the Fed’s statutory authority under the unfair
and deceptive acts and practices provision of HOEPA to crack down on lax
underwriting and consumer abuses through regulations with universal
coverage. When he served on the Fed, the late Governor Edward Gramlich
urged then-Chairman Alan Greenspan to exercise the Fed’s power to
address unfair and deceptive loans under HOEPA. Greenspan refused,
preferring instead to rely on non-binding statements and guidances

The Federal Reserve did not relent until July 2008 when, under
Chairman Ben Bernanke’s leadership, it finally promulgated binding
HOEPA regulations banning specific types of lax and abusive loans. Even
then, the regulations were mostly limited to higher-priced mortgages,
which the Board confined to first-lien loans of 1.5 percentage points or
more above the average prime offer rate for a comparable transaction, and
3.5 percentage points or more above for second-lien loans. Although
shoddy nontraditional mortgages below those triggers had also contributed
to the credit crisis, the rule left those loans—plus prime loans—mostly
untouched

speaking of deceptive. do you have any proof warren won't be selected? doesn't black say that if she isn't selected it likely will have no teeth?

maybe she won't be selected. but as written your thread title is highly deceptive.

no real surprise, though.

Deceptive? Defective is more like it.

perhaps rs was conceived on a monday. a veritable lemon, he ought to be returned to the factory for some fine tuning.

Putting Elizabeth Warren in charge of the agency is the least bad thing that Congress can do. It will make the best of a bad decision. As far as I'm concerned the agency was doomed to failure once the decision was made to house it in the Federal Reserve. As I just posted , the Federal Reserve already had this power, and refused to exercise it. The Fed is run by the banks and for the banks. The Fed will control the new agency to a certain extent. Elziabeth Warren certainly knows the issues and is more than capable.

riversider How is it possible that The United States of America a once great country has a pay czar? And then we have a Ms. Warren. This isn't America anymoe. What has happened to America?

"The Fed is run by the banks and for the banks."

... you bomb-throwing unAmerican anarchistic Commie! Renounce this immediately!!!

I like Elizabeth Warren. She's made studying consumer protection a life effort. What bothers me is how our financial institutions make more money from opacity than delivering a valuable service and how they work with government to maintain that advantage. If government isn't going to solve a problem they should stop pretending.

Honstly, I'd prefer it if they just promoted an agenda of disclosure and created remedies that the public can take advantage via the courts, instead of passing laws that prohibit states from getting involved and further shielding lenders and banks from treating borrowers as fiduciaries.

Don't you think for one minute that a politically correct little weasel like warren will ever control free independent men. We will never let it happen. We will never let the criminal class rule us. We have reached the end of compromise.

Riversider posts something critical of the way the Consumer Protection Agency was set up in the new Financial Reform legislation, and aboutready calls him a liar. And she wonders why people don't like her trolling these boards.

No defective is getting an Ivy league degree and writing trash and doing drugs

you bomb-throwing unAmerican anarchistic Commie! Renounce this immediately!!!

Funny, as it is written in their charter. Just look at the selection process.

lic"comm"ent. pull up his source. the black piece. and tell me whether he's being deceptive.

i can hear the masses chanting, more licc, more licc!! you're so beloved, here.

"perhaps rs was conceived on a monday. a veritable lemon, he ought to be returned to the factory for some fine tuning."

Excellent use of the word veritable. There's that Yale education at use.

"you're so beloved, here."

Isn't it time for another vacation?

Oh, look. How nice.

What button do I have to press to read that?

There it is, unhide.

Why are you hiding?

Dnftt

I'd like to hear from Chautauqua County

dnft"t"? "t", what "t"?

i amuse myself.

dnfcc

I think the three rules here are

1. Keep her away from water.

2. She hates bright light.

3. The most important rule. No matter how much she cries, no matter how much she beg, never, never feed her after midnight.

LICcomm, when did AR ever call RS a liar?
Never right, and wrong again.

Don't microwave her either.

no, RS, i love light. i hate glass boxes.

irregardless?

5 young boys killed in afganistan today. Troops still in Iraq. Gitmo still there. Great job barack!
Bowing to the saudi king--boot on the throat of the productive americans.

julia, you're such a big booster of the wars in Afghanistan and Iraq -- why aren't YOU in both of those countries fighting for our Democratic rights?

Can you be in both countries at once?

I'm against the wars you idiot.

We need a war against excessive government.

We need a 'fundamental transformation" against 99% of the government. The criminals should be put into prison for what they did to this contry.

The Honorable Charlie Rangle, the democrats Horatio Alger!

more endless slogans. more generalizing. you've managed to attract the attention of the resident troll here and thats about it. hfs would agree that the sky was purple in order to get attention. why don't you move to utah or idaho or wherever people like you are holed up.

Why don't you cc and alanhart move. We have had enough of the parasites.

how do you know that we are parasites? aren't you being ridiculous in that judgement based on no information. i have asked you a dozen times to tell me how i am on your famous dole and all you do is spout more slogans.

no, RS, i love light. i hate glass boxes.

Me too. There are beautiful examples of Limestone and brick all along Riverside Drive, West End Avenue, Park Avenue, etc. Just not the cheap brick used in projects.

two 2500 page bills-- Not one of the so called representitives who voted for these abortions actually read the bills. Who wrote the legislaton? Who cc? We have a dishonest government, an abject corrupt regime. How could you support the criminals?

hmmn....did you answer the question or spout a slogan?

question: how do you know that we are parasites?

answer: ?

Answer my question cc. Who?

Let's be honest, nobody reads the bills or ever has. The bills are written with the expectation that the regulators will figure it out later. Often there are unintended consequences. My problem with the bill is that it was watered down where it mattered and/or there were already laws on the books like HOEPA. Why create a new law for the same agency(The Fed) that refused to enforce it before. It's a sham, the Fed has too much power and should concern itself with regulating the money supply and not be a regulator, it is not accountable in the same way other agencies of the government are.

i don't know the names of the people who wrote the legislation.

RS---how do you know? You don't even bother to read the links that you post here.

Who wrote the bills riversider? Did Rangel read it? Did Pelosi read it? Did Schumer read it? Did Reid read it? Did obama read it? A completely corrupt regime...........

It was undoubtedly written by staffers of Key Congressman along with help from Treasury and various friends who reside on k-street.

Rangel is finished. I would be very surprised if he reads many bills in the future.

The government is so corrupt, nobody can even imangine these idiots actually reading any bills. Even a 5 page bill. Can anyone picture Rangel sitting in his office reading a bill? HAHAHAHAHAHAH

i can certainly imagine president obama reading this bill.

julia---more spouting. more sloganeering. no content.

obama hasn't read the bills. No question about it. Maybe he's brushing up on the communist manifesto.
Or playing golf or eating kobe beef at taxpayers expense..but reading the bills cc I don't think so.

rs, you're such a tool. as you're convinced our current govt is destroying our economic hopes how do you possibly foresee your new development condo retaining it's value? small rsb condos aren't exactly prime candidates for such results.

Who cares if Obama read the bill or not. He's supposed to have a staff that briefs him on key provisions and help formulate administration policy. Unofortunatley the acolytes at Treasury were all picked by Robert Rubin who has been known to blow up a bank or two.

New York is a special place. It has limited space to build, and is not only important nationally but internationally. Add to that it has culture, shopping, entertainment and the best of everything. The too large to fail banks are expanding along with some new hedge funds. Manhattan will do OK.

I find it amazing that our U.S. Attorney General publicly criticized the Arizona immigration law while at the same time admitting that he did not read it.

I didn't think any AG could have been worse than Gonzalez, but Holder is absolutely disgraceful.

I don't know. Immigration is a national issue, not a state issue. I'm on the fence on this. It's not at all clear that Arizona was correct here.

dnfcc

ar, the only ones on this board who ever have an issue with me are the few who consistentely make arrogant, obnoxious comments and who can't stand that I call them out on their mistakes, lies, hypocrisy and lack of civility.

dnfar

The regime want to have a civil trial for the sept 11th gang in NYC. Does any rational person need to know anything else about them. Oh yea, holder represented terrorist "rights" at his 'law' firm.

5 troops killed in Afganistan today and two abducted. Maybe obama will shove another socialist bill down our throats. This guy is suuch a disgreace. Who can defend him? Gitmo alanhat, Gitmo. Where is the lunatic screaming left. Oh yea, now they are looking for social justice. aka taking other people's money?

how many times are you going to post the same drivel? go away. enjoy your misery in silence.

dnfcc

cc would you let your kids or grandkids fight in these wars?

dfncc

RS, I'm not opining on the merits of the law, but it is embarrasing for our AG to publicy condemn it while not having read it.

And Holder is disgraceful for far more important reasons than this.

We don't need new agencies. We already have laws & agencies to protect against this stuff. Problems are:
1. Existing agencies do not enforce the law: ie: SEC failing to meaningfully investigate Madoff & instead watching porn.
2. Congress, via fanny & freddie, created an environment where lenders were forced to make mtg loans to people who could never repay.
3. Many borrowers have a low level of education which sets them up to be taken advantage of fraudsters. So, borrower may or may not read mtg docs, doesn't understand them, doesn't do research to gain more knowledge so that they can understand what they're committing to & instead verbally asks mortgage salesperson, who tells borrower "everything's gonna be alright".
4. For at least one (or 2) decade(s), HUD has published a ton of pamphlets & info explaining mortgages in very basic & simple terms. So, info explaining mtgs & answering questions has existed for at least 1 or 2 decades.
5. For the avg buyer, a fixed rate was (& is) always the safest way to go, but many buyers didn't have enough of a downpayment to qualify, so they got seduced by mtg fraudsters with shaddy 'no dp' type loans & Congress allowed it to occur.

Lotsa people got caught up in the RE bubble & as always happens the most vulnerable people get screwed the worst.

During the bubble, I remember speaking to people about mtgs they would take & many didn't know the details of or understand their mtg terms, so I'd discuss it with them (ARM, floor, etc) & they'd just get a perplexed look on their face, but took the mtg anyway, rolling the dice.

IMO, anyone who went for negative amortization or zero down (or any of the other numerous BS sucker gimicks) was a shmo. Of course, question remains as to WHY congress allowed these horrible BS sucker gimick mtgs to be offered to consumers in the first place. By allowing gimicky mtgs on the market, Congress is just as guilty. Congress could have regulated & protected consumers, but they failed to do so.

So, we don't need new agencies, we just need to enforce existing law & Congress needs to act sensibly. We do not need to create more bureaucracies.

Dwell, We need one simple law. A know your customer rule, where a broker would be required to only offer those mortgage products deemed appropriate to the customer's stated objectives. This is currently done with regards to stocks and investments. If a broker violates this the case goes to arbitration or a panel, etc and if a broker is guilty too often , he loses his license. Done and simple.

I meant the ceiling of an ARM, not floor

And let's not forget the bubble occurred outside the U.S. where there was no Fannie, Congress etc.

And when Congress and the President get to discussing Fannie Mae , do you honestly think they will promote a market based solution? They will replace Fannie and Freddie with Dannie and Bettie

We also need to get the government out of the business of buying and insuring mortgages. The government does have a role. The SEC has some good ideas regarding transparency and making sure participants in the securitized mortgage market have access to information. If everyone agrees to treat investors and borrowers fairly and honestly we'll be on our way.

Agreed, Riverside.

You know, the issue of consumer mtgs really isn't that complicated. It's KISS: keep it simple shmo! Offer very basic & simple mtgs, either fixed or a simple ARM based on treasury & require a DP so that people don't buy above their means.

And, in a bubble, even some sophisticated RE investors f'd up, like all that mezz lending & ridiculous billion $ leverage.

fanny, freddy, dodd & rangel: goodbye

"If everyone agrees to treat investors and borrowers fairly and honestly we'll be on our way. "

Yes. This is really the key, the foundation stone for everything in life, including government & personal relationships.

And Fannie Mae and Freddie Mac represented unfair competition to the private market place. Fannie Mae and Freddie Mac pushed the market to focus on non-conforming and sub-prime mortgage solutions, areas Fannie and Freddie could not compete directly. Ironic though that Fannie and Freddie were huge indirect buyers of sub-prime mortgages to the tunes of billions and were the combined the largest buyer of mortgages from the very group least able to repay.

Dwell. The investors are organizing. You can't abuse this important group forever..

http://web.me.com/jennifertfranklin/Talcott_Franklin_P.C./Clearing_House.html

Interesting stuff, River, thanks. And thank you for posting this type of stuff cuz some give you alotta crap for doing so. My only bright thought is that it's about 100 days to November!!!!!!

If everything went perfectly in November, what changes would you expect to see?

""If everyone agrees to treat investors and borrowers fairly and honestly we'll be on our way. "

HA HA HA. The investors gambled and LOST. You can't organize to get your money back. THat's like everyone who loses money in Vegas organizing to get their money back.

i guess class actions and the like are fine, as long as they're for investors.

remember, rs, honest people can't be cheated. or at least that's what you wrote.

They can be expected to sue the servicers for not living up to contractual obligations, as specified in the agreements. They might even win.

honest people can't be cheated.

No idea what you are talking about , but clearly out of context..

The servicers have an obligation to maximize returns to the investors in the various trusts. Everyone knows this is not occurring the way it should. Some of the parties servicing hold second liens outside the trust and Bank America/Countrywide own an insurance company apparently collecting fat premiums while the loans sit delinquent. They delay liquidation for as long as sufficient equity remains in the homes which protects the servicer but leaves nothing for the senior bond holders.

Now lets discuss how are pension funds both public and private level are not able to fund retirements.

A.R. you really should read some of the things I post before responding with non-sense.

'Interesting stuff, River, thanks. And thank you for posting this type of stuff cuz some give you alotta crap for doing so. My only bright thought is that it's about 100 days to November!!!!!!'

Dwell totally agree! Great to see you here, brightened up my day.

Ninety percent of the politicians give the other ten percent a bad reputation.
Henry A. Kissinger

JuliaG, lets hope we find the ten percent.

If the dems retain control of both houses in nov, the stock market will collapse and the real estate market will obviously follow. We all will be completely screwed. 15 trillion dollars in debt, 10000 baby boomers retiring evey day, a ruling class abjectly corrupt, and obama is HAPPILY facilitating the demise of a country formerly known as America.

Hey juilialg,

Kudos to you & River for taking the bullets. As a lifelong Manhattanite, I know the audience & often, some of them don't want to hear it, nor allow us to speak. Nutthin' new. But, the times, they are a'changin, so look out kids cuz ya don't need a weather man to know which way the wind blows

There's nothing like the prospect of an electoral rout to concentrate the incumbent mind, and so all of a sudden rank-and-file Democrats in Congress are saying maybe they shouldn't let the 2003 tax rates expire after all. Now if they can only persuade their Speaker of the House, the Treasury Secretary and President Obama.

Even Jerrold Nadler, a liberal from central casting, is worrying publicly that the tax hike will hit his New York constituents too hard. And he's certainly right given that the combined top state and federal income tax rate will be close to 54% in 2011 in New York City. Mr. Nadler is proposing—seriously—to adjust the income tax brackets based on regional cost of living so fewer New Yorkers pay the rates

http://online.wsj.com/article/SB10001424052748703467304575383233009284878.html

dwell,

I live on the Upper West Side and love it, but i feel as if the politically correct police will knock on my door at 4:00am and take me away to their internment camps. But, We have been silent too long and for my children's life i feel i have to fight to the death. I see an extremely disturbing outcome to all this 'social justice' lunatic left wing mentality. The mainstream libs are in complete denial, obama and his regime are not your garden party socialists or do gooder liberals---they mean business.

ps I love dylan

"Even Jerrold Nadler, a liberal from central casting, is worrying publicly that the tax hike will hit his New York constituents too hard."

Yeah, yeah, I heard!! Nadler!!!!! OMG!!!!!! Strange bed fellows. Clarification: when I think of Nadler, the words "bed" & "fellow" repulse me. I'll leave it at strange.

And you're doing all this by posting here?

When i think of nadler, i think bed bug!!!

When I think of Nadler, I think Gastric bypass

Yes julia. I feel an authoritarianism creeping upon us, it comes bit by bit, to the point where we'll be living in a dictatorship & some may not even realize it.

Great example:
Example: the healthcare bill has a provision saying that if you buy something for more than $600.00, you have to send the seller a 1099 form.
http://money.cnn.com/2010/05/05/smallbusiness/1099_health_care_tax_change/

Not only is that pointless & wasteful, but, it has no relation to healthcare. Why was that in the healthcare bill & did anyone even know it was in the bill, buried somewhere among the 2,000 page? So, get ready,cuz we'll be filing a buncha 1099s from now on & the gov will know what we buy & from whom & keep us occupied by filing tons of paper.

I see our individual personal liberties being eroded by increasingly dictatorial government which increasingly encroaches into the personal details of our private lives.

agreed

rs, you don't even read what you post. but i do.

i agree that the patriot act is an abomination that should be repealed.

re: Nadler: LOL julia & river!!!! But, compared to what he was, he lookin' very fine.

Hi dwell, how ya been?

Oh, Riversider -- I like you. Post whatever articles you want.

For the folks who don't like them -- don't read them.
If you read them, stop complaining about them.

Yeah Julia,

I'm just down on the pavement, thinking about the government ;)

truth, bully for you. he has been mischaracterizing his sources for years.

Hey Truth,
I'm OK, hope you're doing well. :)

Ah, this is what happens when it's too darn hot outside.