Financial Crisis Links
THE UNIVERSITY OF IOWA CENTER FOR INTERNATIONAL FINANCE & DEVELOPMENT
Prepared by Judith Faucette
Statements and Press Conferences of World Leaders
US
House and Senate Testimony
·
Joint Economic Committee Hearing on Predatory
Lending and Reverse Redlining – June 25, 2009
Video of the entire
hearing
Prepared testimony of
Robert Strupp, Director of Research for the Community Law Center on
discriminatory practices in real estate, the work of the Baltimore City
Flipping and Predatory Lending Task Force, federal policies on home ownership
and the problems that arose from them, targeting of minorities and seniors, and
resulting foreclosures
Prepared testimony of
Gregory Squires, Chair of the Department of Sociology at George Washington
University, on increasing economic equality, inequality and subprime lending, and
policy responses
Prepared testimony of
Sarah Bloom Raskin, Maryland Commissioner of Financial Regulation, on state
banking commissioners' enforcement actions against predatory lenders, predatory
lending and foreclosures in Maryland, efforts to combat these practices in
Maryland, regulatory and legislative action, a settlement with Taylor Bean,
preemption and failure to fill regulatory gaps, and the Consumer Financial
Protection Agency
Prepared testimony of James
Carr, COO of the National Community Reinvestment Coalition, on origins of the
foreclosure crisis, inequality in the crisis, and suggested solutions
·
House Financial Services Committee Hearing on
Regulatory Restructuring – June 24, 2009
Video of the entire
hearing
Prepared testimony of
Elizabeth Warren, law professor at Harvard University, on the problems with the
banking industry's current business model, how big banks keep business away
from local banks with better practices, how bad consumer credit increases
systemic risk, and the potential of a Consumer Financial Protection Agency
Prepared testimony of
William Galvin, Secretary of the Commonwealth of Massachusetts, on how the
administration's plan would increase consumer protection, the promise of a
Consumer Financial Protection Agency, the need to bolster state securities
regulators, reverse preemption of state authority, states' effectiveness as
securities regulators, and the need for more tools and reforms
Prepared testimony of
Ellen Seidman, Senior Fellow with the New America Foundation, on causes of the
crisis, principles of regulation, the Consumer Financial Protection Agency, and
a proposal to use the CFPA for Community Reinvestment Act evaluations
Edmund
Mierzwinski and Travis Plunkett Testimony
Joint prepared
testimony of Edmund Mierzwinski, Consumer Protection Director for the U.S.
Public Interest Research Group, and Travis Plunkett, Legislative Director of
the Consumer Federation of America, on the Consumer Financial Protection
Agency, how to learn from past failures, how to fill regulatory gaps, past
errors of the federal bank regulators, the structure and jurisdiction of a
CFPA, and responses to those who oppose the creation of a CFPA, with attached
information
Prepared testimony of
Edward Yingling, President and CEO of the American Bankers Association, on the
need to combine consumer regulation with safety and soundness regulation, the
need to focus on closing regulatory gaps rather than adding another layer of
regulatory bureaucracy, the authority the Consumer Financial Protection Agency
would have over banks' products and services, the cost of undermining national
standards, the cost of the new agency, and suggested improvements to the
proposal
Prepared testimony of
Alex Pollock, Resident Fellow with the American Enterprise Institute, on the
Consumer Financial Protection Agency, the consequences for community banks, the
importance of disclosures, the importance of personal responsibility, the need
for elaboration on the relation between the proposed CFPA and the GSEs, the
conflict between the Community Reinvestment Act and safety and soundness
responsibilities, conflict among regulators, and the need to attract private
capital
Prepared testimony of
Kathleen Keest, Senior Policy Counsel for the Center for Responsible Lending,
on the importance of an independent agency for adequate, impartial, and informed
market-wide oversight, the need for the agency to have regulatory, supervisory,
and enforcement jurisdiction over providers of credit, deposit, and payment
systems, and the need for mixed funding of the agency, with attached
documentation
Prepared testimony of
Ralph Tyler, Commissioner of the Maryland Insurance Association on behalf of
the National Association of Insurance Commissioners, on the establishment of
market regulation and interstate collaboration
Prepared testimony of
Gary Hughes, General Counsel and Executive Vice President of the American
Council of Life Insurers, on life insurance product regulation, life insurance
products and the financial crisis, life insurance regulation and solvency, and
the lack of federal insurance regulatory expertise
Catherine
Weatherford Testimony
Prepared testimony of
Catherine Weatherford, President and CEO of NAVA, the Association for Insured
Retirement Solutions, on the extent of retirement savings needs, the key role
of insured retirement products in retirement, support for strong consumer
protection laws and enforcement, the adequacy of the current regulatory
structure, and the dangers of a new layer of regulation
Prepared testimony of
Cliff Wilson, President of the National Association of Insurance and Financial
Advisors, on the comprehensiveness of state regulation over insurance and the
danger of regulatory confusion, the danger of separating insurance product
regulation from insurance solvency regulation, and the importance of
comprehensive rather than piecemeal regulation
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on Modernizing Oversight of OTC Derivatives – June 22,
2009
Video of entire
hearing
Prepared testimony of
Mary Schapiro, Chairman of the SEC, on the structure of OTC derivatives and how
to fill gaps in their regulation
Prepared testimony of
Gary Gensler, Chairman of the US Commodity Futures Trading Association, on the
importance of comprehensive regulation of OTC derivative dealers and markets,
suggestions for regulation of both dealers and markets, regulation of
standardized and customized derivatives, authority for this regulation, and
four key objectives for regulation
Prepared testimony of
Patricia White, Associate Director of the Fed's Division of Research and
Statistics, on policy objectives for the regulation of OTC derivatives,
supervision, and risk management
Prepared testimony of
Henry Hu, law professor at the University of Texas, on differing perspectives
on financial innovation, decision-making errors and information complexities in
financial innovation, and the decoupling process
Prepared testimony of
Kenneth Griffin, Founder, President, and CEO of Citadel Investment Group, on
the benefits of derivatives, essential reforms to the market, and
incentivization
Prepared testimony of
Robert Pickel, Executive Director and CEO of the International Swaps and
Derivatives Association, on OTC derivatives, notional amounts, regulatory and
industry initiatives related to OTC derivatives, central counterparty clearing,
and transparency
Prepared testimony of
Christopher Whalen, Managing Director of Institutional Risk Analytics, on OTC
asset classes, bank business models and OTC derivatives, basis risk and
derivatives, credit default swaps and systemic risk, credit default swaps and
securities fraud, the best means of OTC derivative oversight, key decisions in
modernizing oversight, the pros and cons of different proposals, and the
relation between this area of regulation and broader regulatory reform, with an
attached article on AIG and a bibliography of other articles
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on the Administration's Proposal to Modernize the Financial
Regulatory System – June 18, 2009
Video of the entire
hearing
Prepared testimony of
Timothy Geithner, Treasury Secretary, on regulation of financial firms,
comprehensive regulation of financial markets, consumer and investor
protection, the need to provide the government with tools to manage the crisis,
and the need to raise international regulatory standards and increase
international cooperation
·
House Financial Services Committee Hearing on
Compensation Structure and Systemic Risk – June 11, 2009
Video of the entire
hearing
Prepared testimony of
Gene Sperling, Counselor to the Secretary of the Treasury, on the role of
perverse incentives in the crisis, the importance of improving compensation
practices across the board, the need for compensation to match performance, the
need to structure compensation according to the time horizon of risks, the need
to align compensation practices and sound risk management, the concerns with
golden parachutes and supplemental retirement packages, and the importance of
transparency and accountability
Prepared testimony of
Scott Alvarez, General Counsel to the Federal Reserve Board of Governors, on
the relationship between compensation practices and risk management, the need
for improvement in compensation structure, the reasons for maligned incentives,
current compensation practices and policies, and suggested steps to improve them
Prepared testimony of
Brian Breheny, Deputy Director of the SEC Division of Corporate Finance, on
executive compensation rules, the 2006 amendments to those rules, upcoming
rulemaking proposals, and shareholder director nomination processes and
disclosure
Prepared testimony of
Lucien Bebchuk, law, economics, and finance professor at Harvard University, on
how to tie compensation to long-term performance, leveraging of bank
executives' payoffs, and the role of government relative to non-financial firms
and large firms posing systemic risk, with attached discussion paper on
regulating bankers' pay
Prepared testimony of
Nell Minow, Editor and Founder of the Corporate Library, on the consequences of
excessive executive pay, the problems with past and current pay structures, and
elements that can improve the situation
Prepared testimony of
Lynn Turner, former SEC Chief Accountant, on principles key to holding investor
trust, investment trends, compensation for undue risks, risk-management
failures, perverse incentives, lack of accountability among Boards of
Directors, failure of asset managers as fiduciaries, the involvement of new
financial products such as CDOs, and recommendations to improve transparency,
create accountability, and regulate systemic risk
Prepared testimony of
Kevin Murphy, business, law, and economics professor at the University of
Southern California, on risk taking and the culture of bonuses for Wall Street
executives, risk and performance measurement, and whether regulation is the
best way to fix compensation problems
Prepared testimony of
J.W. Verret, law professor at George Mason University, on the problems with
diverse proposals to address the compensation issue, consequences of regulating
compensation practices, the need for flexibility in determining compensation
packages, and the uncertainties surrounding the role of compensation in the crisis
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on the Impact of Federal Assistance on the Auto Industry
– June 10, 2009
Video of the entire hearing
Prepared testimony of
Ron Bloom, Senior Advisor on the Auto Industry to the Treasury Department, on
the Auto Task Force, the situations at Chrysler and GM, the government's
ownership stake in GM, and stabilizing the auto finance market and supply base
Prepared testimony of
Edward Montgomery, White House Director of Recovery for Auto Communities and
Workers, on unemployment in the auto industry and its broader implications, the
long-term nature of the problem, the need for a viable industry, and steps
taken by federal agencies towards ensuring viability
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on TARP Oversight – May 20, 2009
Video of the entire
hearing
Prepared testimony of
Timothy Geithner, Treasury Secretary, on economic conditions when the
administration took office, its response, EESA reform, transparency,
accountability, oversight, housing, the Capital Assistance Program, the Consumer
and Business Lending Initiative, the Small Business Initiative, the Public
Private Investment Program, the Auto Task Force, EESA funds, and regulatory
reform
·
Joint Economic Committee Hearing on TARP
Accountability and Oversight – June 9, 2009
Video of the entire
hearing
Prepared testimony of
Elizabeth Warren, Chair of the Congressional Oversight Panel, on the panel's
most recent report, recommendations in light of stress test results, the need
for transparency, the importance of avoiding fire sales of assets, previous
panel reports, and lessons learned from those reports for handling the crisis
·
House Financial Services Committee Hearing on
Capital Loss, Corruption, and the Role of Western Financial Institutions
– May 19, 2009
Video of the entire
hearing
Prepared testimony of
Raymond Baker, Director of Global Financial Integrity, on the Foreign Corrupt
Practices Act, the nature of present-day corruption, the global shadow
financial system, a study on illicit financial flows, and possible solutions,
with two attached articles
Prepared testimony of
Anthea Lawson, Lead Investigator of Financial Institutions for Global Witness,
on the role of banks in corruption and the flow of corrupt money, reasons for
the phenomenon, the need to address corruption in regulatory changes, failures
of banks to perform due diligence, the Foreign Corrupt Practices Act, and
needed changes, with attached documentation of the examples given in testimony
Prepared testimony of
Nuhu Ribadu, former Chairman of the Nigerian Government's Economic and
Financial Crimes Commission, on the global interconnectedness of corruption,
the example of Nigeria, the Siemens scandal, the need for political will in
fighting corruption, the need for international regulations and standards, the
importance of transparency, and the relationship between corruption and
democracy
Prepared testimony of
Monica Macovei, former Romanian Minister of Justice, on means of measuring
corruption, sources of corruption, issues in Romania, dangers to
anti-corruption advocates, the regime change in Romania, and the relationship
between corruption among the political elite and general societal ethics
Prepared testimony of Jack Blum, former Head of the UN Experts Group on Asset
Recovery, on major examples of corruption today, problems in stopping the flow
of corrupt funds, the history of global coordination against corruption, and
the Patriot Act
·
House Oversight Committee Hearing on AIG and
Taxpayer Money – May 13, 2009
Prepared testimony of
Edward Liddy, AIG Chairman and CEO, on the restructuring plan, progress made so
far, particular milestones reached, governance improvement, cooperation with
government entities and trustees, and the danger of criticism
Prepared testimony of
Jill Considine, AIG Trustee, on trustee responsibilities and limitations and
the review of governance and compensation taking place
Prepared testimony of
Douglas Foshee, AIG Trustee, on review and selection of the AIG Board of
Directors
Prepared testimony of
Chester Feldberg, AIG Trustee, on the background of the trust arrangement, the
appointment of trustees, and factors not within the trustees' control
Prepared testimony of
J.W. Verret, law professor at George Mason University, on the precedent set by
the AIG trust arrangement including provisions that require trustees to manage
the trust in the best interests of Treasury rather than the taxpayer, provide
liability protection to trustees, and allow trustees to invest in investment
opportunities that would otherwise belong to AIG
·
House Financial Services Committee Hearing on
the Effect of the Lehman Brothers Bankruptcy on State and Local Governments
– May 5, 2009
Video of the entire
hearing
Prepared testimony of
Karen Rushing, Clerk of the Circuit Court and County Comptroller for Sarasota
County, Florida, on the impact of the crisis on Florida, the consequences of
the federal government's treatment of Lehman Brothers for state and local
governments, and specific consequences stemming from the bonds Sarasota County
held with Lehman Brothers
Prepared testimony of
Ron Galatolo, Chancellor of the San Mateo County Community College District, on
losses to the district's budget related to the holding of troubled Lehman
Brothers assets, the academic consequences and consequences to the local
community, and the impact on the local economy of the need to halt college
construction projects
Prepared testimony of
Richard Gordon, San Mateo County Supervisor, on losses to public
instrumentalities resulting from Lehman Brothers bonds and securities, the
unique position of public instrumentalities, and the benefits of using TARP
assistance to help these instrumentalities
Prepared testimony of
Bob Hullinghorst, Boulder County Treasurer, on local government write-offs due
to the Lehman Brothers failure and the risk-averse philosophy behind local
government involvement with Lehman
Prepared testimony of
Christ Thornberg, economist with Beacon Economics, on San Mateo County's losses
and the consequences thereof, the scope of damage to local governments as a
result of the Lehman Brothers failure, federal government response, and the
need for further action
Prepared testimony of Chriss Street, Orange County Treasurer, on the economic
environment in California, Proposition 13's limitation on property taxes and
its consequences, capital gains taxes in California, revenue expectations and
other revenue tools, California's debt, and the need for the federal government
to purchase Registered Anticipation Warrants rather than guaranteeing
California's debt in order to avoid a decrease in its sovereign debt rating
·
House Financial Services Committee Hearing on
the Mortgage Reform and Anti-Predatory Lending Act of 2009 – Apr. 23,
2009
Video of the entire
hearing
Prepared testimony of
Sandra Braunstein, Director of Consumer and Community Affairs for the Federal
Reserve, on the Fed's rules for mortgage loans under the Truth in Lending and
Home Ownership and Equity Protection Acts, current efforts by the Fed to
improve mortgage disclosures, and legislative responses to issues with mortgage
lending
Prepared testimony of
Steven Antonakes, Massachusetts Commissioner of Banks, on behalf of the
Conference of State Bank Supervisors, on cooperative federalism and the
Conference's support of and suggestions for the legislation under
consideration, as well as attached documentation
Prepared testimony of
John Taylor, President and CEO of the National Community Reinvestment
Coalition, on the need to strengthen mortgage laws and regulatory oversight,
the need for a comprehensive anti-predatory lending law and specific
suggestions to improve the proposed law, and the need to address issues that
fall outside the scope of this law
Prepared testimony of
Michael Calhoun, President of the Center for Responsible Lending, on the
mortgage market and the reason it failed in the crisis, the need to do away
with perverse incentives for lenders, the need to ensure that all loans are
affordable and benefit the borrower as well as providing consequences to deter
lenders from falling short of standards, the need for a realignment of
incentives, the need to preserve state tools that fight predatory lending, and
the importance for servicers to try to keep borrowers in their homes if
possible
Prepared testimony of
Margot Saunders, Of Counsel for the National Consumer Law Center, on the
problems with the pre-emption provision of the proposed law's erasure of
state-law provisions, the scope and effect of particular provisions relative to
predatory lending practices, and recommendations to make the law clearer and
more broadly applicable
Prepared testimony of
Eric Rodriguez, Vice President of Public Policy for the National Council of La
Raza, on predatory lending in the Latino community and NCLR's work, key
existing provisions in the proposed law that protect borrowers and tenants,
provisions that need to be strengthened, and additional recommendations
Prepared testimony of
Hilary Shelton, Vice President for Advocacy and Director of the NAACP
Washington Bureau, on the experiences of people of color with subprime
borrowing, the consequences of predatory lending practices, elements that need
to be included in the proposed legislation, and other laws that the NAACP
supports
Prepared testimony of
Gary Berner, Executive Vice President for Commercial Real Estate at First
Niagara Bank, on behalf of the American Bankers Association, on the major
reforms to the mortgage industry contained in recent regulations, how recent
reforms reflect sound underwriting principles on which traditional mortgage
lending is based, and the need to amend the proposed legislation to recognize
conservative tendencies of banks, recognize the protections of supervisory
processes, provide safe harbors for bank products that fulfill important market
needs, and avoid undue restrictions on credit to creditworthy borrowers
Prepared testimony of
John Dalton, President of the Housing Policy Council, on mistakes made in the
past, changes in the mortgage industry, and recommendations for the proposed
legislation
Prepared testimony of
David Kittle, Chairman of the Mortgage Bankers Association, on concerns with
the proposed legislation including a lack of national standards, retention of
risk by the lender, the definition of a "qualified mortgage,"
steering prohibitions, safe harbor provisions, and assignee liability
Prepared testimony of
Michael Menzies, President and CEO of Easton Bank and Trust, on behalf of
Independent Community Bankers of America, on the new Truth in Lending Act
standards that would be applicable to all residential mortgages under the
proposed legislation, concerns about a new cause of action and the scope of the
safe harbor provisions, anti-steering provisions, the risk retention
requirement, and changes to HOEPA
T.
Timothy Ryan, Jr. Testimony
Prepared testimony of
T. Timothy Ryan, Jr., President and CEO of the Securities Industry and
Financial Markets Association, on the requirements and remedies imposed by the
proposed legislation, revisions to HOEPA, positive elements of the legislation,
and concerns regarding safe harbor, credit contraction, and risk retention
Prepared testimony of
Denise Leonard, Chairman of Government Affairs for the National Association of
Mortgage Bankers, on origins of the crisis, recent changes in regulation,
legislation, and the market, standards for residential mortgage loan
origination, minimum standards for mortgages, high cost mortgages, and
appraisal activities
Prepared testimony of
Charles McMillan, President of the National Association of Realtors, on support
for mortgage lending reform and some pieces of the legislation needing
additional clarification
Prepared testimony of
Jim Amorin, President of the Appraisal Institute, on interior observations of
property, conflicts of interest, consumer protection in changing market
conditions, appraiser independence, registration of appraisal management
companies, appraisal subcommittee amendments, and technical issues
Prepared testimony of
Jim Arbury on behalf of the National Multi Housing Council and National
Apartment Association, on enacting a more balanced housing policy, continuing
the ban on seller-financed down payment programs, retention and expansion of
the supply of affordable rental housing, the need to reject new mandates on
multifamily owners, and the need to preserve the apartment industry's access to
capital
·
House Oversight Committee Hearing on The Role
of State and Local Governments in the American Recovery and Reinvestment Act of
2009 – Apr. 21, 2009
Prepared testimony of
Timothy Gilchrist, Senior Advisor for Infrastructure and Transportation to the
Governor of New York, on the New York state budget, New York's Inspector
General and other internal control measures, the role of the GAO in
implementing the Act in New York, minority and women's business enterprises,
and challenges in reporting and transparency with suggestions for where the
federal government can help, as well as an attached press release
Prepared testimony of
David Robinson, Associate Director of the Center for Information Technology
Policy at Princeton University, on the significance of the Recovery Act's implementation
during the information age, ways to use information technology to increase
transparency and effectiveness of spending, benefits for individuals and ways
to use the information that will be available, and state responsibility, with
attached policy recommendations
Prepared testimony of
Colvin Grannum, President of the Bedford Stuyvesant Restoration Corporation, on
the work of the Corporation, how it benefits from the stimulus package, job
creation, and opportunities for local and minority- or women-owned businesses
William
Thompson, Jr. Testimony
Prepared statement of
William Thompson, Jr., New York City Comptroller, on the crisis in New York,
the need for transparency and accountability reforms, measures already taken,
and plans to account for the stimulus funds
·
Joint Economic Committee Hearing on Systemic
Threats of Large Financial Institutions – Apr. 21, 2009
Video of the entire
hearing
Prepared testimony of
Simon Johnson, entrepreneurship professor at MIT, on the roots of the crisis,
the U.S. system, American oligarchs, and solutions
Prepared testimony of
Joseph Stiglitz, professor at Columbia University, on failures of the current
system including "too big to fail" institutions, principles for going
forward including transparency and accountability, the trouble with bailouts,
perverse incentivization, and the need to break up and regulate institutions
Prepared testimony of
Thomas Hoenig, President of the Federal Reserve Bank of Kansas City, on loss of
confidence in large financial institutions, the need for a shift in strategy,
and regulatory changes, with an attached speech proposing changes
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on Lessons from the New Deal – Mar. 31, 2009
Video of the entire
hearing
Prepared testimony of
Christina Romer, Chair of the Council of Economic Advisors, on the limited
effects of a small fiscal expansion, the benefits of monetary expansion even
with near-zero interest rates, the dangers of cutting back a stimulus too soon,
the link between financial and real recovery, the benefits of worldwide
expansionary policy for benefit and burden sharing, the importance of putting
in place reforms to prevent future crises, and the significance of how the
Depression ended
Prepared testimony of
James Galbraith, Lloyd M. Bentsen Chair of the Lyndon B. Johnson School of
Public Affairs at the University of Texas at Austin, on Depression-era actions
related to banking, the importance of social insurance, the limited
understanding of and tools for macroeconomic policy during the Depression, the
scale of reconstruction in the 1930s, and the fate of the commercial banking
system after the Depression
Prepared testimony of
J. Bradford Delong, economics professor at UC Berkeley, on the elements of
recovery during the New Deal, with an appended Q&A sheet
Prepared testimony of
Allan Winkler, history professor at Miami of Ohio University, on the
achievements of the New Deal and its failure to achieve economic recovery
Prepared testimony of Lee Ohanian, economics professor at UCLA, on the negative
effects of the New Deal on economic recovery and the benefits of research in
determining policy, as well as appended charts
·
Senate Finance Committee Hearing on TARP
Oversight – Mar. 31, 2009
Video of the entire
hearing
Prepared testimony of
Neil Barofsky, Special Inspector General for the TARP program, on the office's
upcoming report to Congress, transparency and use of audits, coordinated
oversight efforts, law enforcement, and AIG bonuses
Prepared testimony of
Elizabeth Warren, Chair of the Congressional Oversight Panel, on the panel's
mission and activities, cooperation with other organizations charged with TARP
oversight, the panel's report on TARP, foreclosure mitigation, the TALF,
assistance to AIG, and lack of a strategy at Treasury for TARP
Prepared testimony of
Gene Dodaro, Acting Comptroller General, on Treasury's strategy for TARP and
the principal use of the Capital Purchase Program, the establishment of the
OFS, and the difficulty of determining the actual impact of TARP on the markets
·
House Financial Services Committee Hearing on
the Need for Comprehensive Regulatory Reform – Mar. 26, 2009
Video of the entire
hearing
Prepared testimony of
Timothy Geithner, Treasury Secretary, on causes of the crisis, steps to create
a more stable and resilient financial system, systemic risk reduction,
systemically important firms and markets, payment and settlement activities,
hedge funds, derivatives including credit default swaps, money market mutual
funds, and resolution authority
·
House Financial Services Committee Hearing on
the Balance Between Increased Credit Availability and Prudent Lending Standards
– Mar. 25, 2009
Video of the entire
hearing
Prepared testimony of
Elizabeth Duke, Federal Reserve Board Governor, on the Fed's regulatory
authority, the state of the banking system, credit market conditions, and Fed
actions since 2007
Prepared testimony of
Martin Gruenberg, FDIC Vice Chairman, on use and availability of credit over
the business cycle, bank credit quality and lending activity, and the role of
bank supervision
Prepared testimony of
Scott Polakoff, the Acting Director of the Office of Thrift Supervision, on
recent credit demand and availability data, facets of the credit problem, and
possible actions in response
Prepared testimony of
Timothy Long, Senior Deputy Comptroller and Chief National Bank Examiner, on
low loan demand and loan volume, regulatory approach, and its consistency with
safe and sound banking practices
Prepared testimony of
James Kroeker, SEC Acting Chief Accountant, on recent efforts to improve fair
value accounting and interaction between regulatory capital and U.S. GAAP
Prepared testimony of
Stephen Wilson, Chairman and CEO of LCNB Corporation and LCNB National Bank on
behalf of the American Bankers Association, on the dangers of regulators
applying overly conservative standards, the adverse impact of FDIC special
assessments on lending, and the adverse impact of mixed messages on the Capital
Purchase Program
Prepared testimony of
Brad Hunkler, Vice President and Comptroller of Western & Southern
Financial Group, on behalf of the Financial Services Roundtable, on the role of
the financial services industry, securitization oversight, mark-to-market
accounting, and Congress's role in setting accounting standards
R.
Michael Menzies, Sr. Testimony
Prepared testimony of
R. Michael Menzies, Sr., President and CEO of Easton Bank & Trust on behalf
of the Independent Community Bankers Association, on the Interagency Statement
on Meeting the Needs of Creditworthy Borrowers, community banks' ability to
lend, field examiners' criticism of good loans and tendency to be tougher on
FHLB borrowers, the adverse impact of these practices on ability to lend,
regulators' attempts to improve, problems with the FDIC special assessments,
disparate treatment in enforcement actions, mark-to-market accounting, and
recommendations
Randall
Truckenbrodt Testimony
Prepared testimony of
Randall Truckenbrodt of American Equipment Rentals on behalf of the National
Federation of Independent Businesses, on a negative experience with Bank of
America regarding small business loans
Prepared testimony of
Richard Berg, President and CEO of Performance Trust Capital Partners, on the
problems in defining toxic assets, as well as attached examples and documents
on credit ratings
·
House Financial Services Committee Hearing on
Oversight of the Federal Government's Intervention at AIG – Mar. 24, 2009
Video of the entire
hearing
Prepared testimony of
Timothy Geithner, Treasury Secretary, on regulatory gaps reflected by AIG's
failure, the need for regulatory reforms, AIG's use of derivatives and the
consequences, actions taken by the government to rescue AIG, management
restructuring and compensation at AIG, actions to recoup bonuses, new
restrictions on executive compensation, and regulatory proposals
Prepared testimony of
Ben Bernanke, Chairman of the Federal Reserve, on the reasons for the Fed's
original decision to lend to AIG, the Fed's ongoing involvement at AIG, and
lessons learned
Prepared testimony of
William Dudley, President and CEO of the Federal Reserve Bank of New York, on
the FRBNY's role with AIG, efforts to reduce risk in AIG's Financial Products
division, and ongoing government involvement with AIG
·
House Financial Services Committee Hearing on
Enforcement of Financial Consumer and Investor Protection Laws – Mar. 20,
2009
Video of the entire
hearing
Prepared testimony of
Elizabeth Duke, a Federal Reserve Governor, on mortgage fraud and Fed
investigation of mortgage fraud, safety and soundness examinations of banks,
guidance the Fed has issued on mortgage-related concerns, examinations of banks
for compliance with consumer protection laws, fair lending enforcement, rules
banning unfair and deceptive practices, prevention of these activities, and
future challenges
Prepared testimony of
John Dugan, Comptroller of the Currency, on the OCC's enforcement philosophy,
its authority, its approach to enforcement, enforcement actions towards problem
banks, coordination with other agencies, and supervision and enforcement
regarding mortgage lending
Prepared testimony of
Elisse Walter, SEC Commissioner, on the SEC's law enforcement authority and
processes, regulation and enforcement in the current crisis, subprime
enforcement actions and ongoing investigations, auction rate securities,
short-selling, hedge funds and insider trading, ponzi schemes, cooperation with
other authorities, and the need for additional resources
Prepared testimony of
Martin Gruenberg, FDIC Vice Chairman, on enforcement actions regarding failed
institutions, enforcement actions regarding open banks, the Office of the
Inspector General, and restrictions on the FDIC's authority
Prepared testimony of
Scott Polakoff, Acting Director of the Office of Thrift Supervision, on OTS
enforcement authority, formal enforcement actions, exercise of enforcement
authority in practice, coordination with other agencies, and regulatory gaps
Prepared testimony of
Rita Glavin, Acting Assistant Attorney General for the Department of Justice
Criminal Division, on law enforcement coordination, investigation and
prosecution of mortgage fraud, identifying victims of mortgage fraud and making
them whole, intentions for future prosecutions, and possible improvements
Prepared testimony of
John Pistole, Deputy Director of the FBI, on trends in mortgage fraud, the
current approach to financial fraud, cooperation among agencies, and the FBI's
relationship with the mortgage industry
Prepared testimony of
William Galvin, Secretary of the Commonwealth of Massachusetts, on state
securities regulation, fines for violators and restitution for investors,
additional sanctions, state regulators' need for legislative changes to
increase authority, and expected upcoming problems
Prepared testimony of
Lisa Madigan, Illinois Attorney General, on state mortgage fraud enforcement
actions and obstacles for state attorneys trying to pursue these actions
Prepared testimony of
Sarah Bloom Raskin, Maryland Commissioner of Financial Regulation, on state
supervision and enforcement successes and future expectations, the evolving
network of financial regulation, legislative and enforcement actions,
challenges to state supervision and enforcement, and recommendations, as well
as attached charts and documentation
Prepared testimony of
James Ropp, Delaware Securities Commissioner, on state securities enforcement,
impediments to state regulation, recommendations, and coordination between
state and federal regulators
Prepared testimony of
Merle Sharick, of Mortgage Asset Research Institute, on the organization's
Mortgage Fraud Case Report
·
House Oversight Committee Hearing on Preventing
Stimulus Waste and Fraud – Mar. 19, 2009
Prepared testimony of
Earl Devaney, Chairman of the Recovery Accountability and Transparency Board,
on the purpose of the Board, the recovery.gov website, transparency goals, a
focus on prevention to achieve accountability, and inter-agency cooperation
Prepared testimony of
William Holland, Illinois Auditor General, on the importance of accountability
to state auditors, current oversight at the state level, and uncertainty on the
role of the state auditor and the source of funding under the Recovery Act
Prepared testimony of
David Gragan, Chief Procurement Officer of the District of Columbia and Member
of the National Association of State Procurement Officials (NASPO) Board of
Directors, on ways to prevent waste, fraud, and abuse at the state and local
level, the role of central procurement, the need for adequate staffing, the use
and benefits of cooperative purchasing, steps being taken to eliminate wasteful
spending, plans for audits and investigations related to fraud in stimulus
programs, and oversight challenges for state governments receiving stimulus
money
Prepared testimony of
Jerome Heer, representing the Association of Local Government Auditors, on
local government oversight infrastructure, challenges to local government
oversight efforts, ALGA's work, steps to prevent wasteful spending at the local
level, and plans for audits and investigations concerning fraud in stimulus
programs
Prepared testimony of
Jeremy Brito, Senior Research Fellow at George Mason University's Mercatus
Center, on crowdsourcing accountability and needed clarifications on disclosure
requirements, with extensive attached documentation
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on Current Issues in Deposit Insurance – Mar. 19, 2009
Video of the entire
hearing
Prepared testimony of
Art Murton, Director of the FDIC Division of Insurance and Research, on the
condition of the deposit insurance fund, borrowing authority, improving
systemic risk special assessments, permanently increasing coverage to $250,000,
and mandatory rebates
Prepared testimony of
David Marquis, Executive Director of the National Credit Union Administration,
on permanently increasing coverage to $250,000, extending NCUSIF replenishment
authority to five years, increasing borrowing authority for the NCUSIF, and
systemic risk authority for the NCUA
Prepared testimony of
William Grant, Chairman and CEO of First United Bank & Trust, on behalf of
the American Bankers Association, on the banking industry's commitment to
ensuring that the FDIC is financially secure, the adverse impact of the FDIC's special
assessments on lending, and the need for the $100 billion credit line to reduce
FDIC assessments on banks
Prepared testimony of
Terry West, President and CEO of VyStar Credit Union, on behalf of the Credit
Union National Association, on natural person and corporate credit unions, the
NCUSIF, NCUA's actions to assist corporate credit unions, actions to mitigate
credit union costs without legislation, and suggested legislation
Prepared testimony of
Steve Verdier, Senior Vice President of the Independent Community Bankers of
America, on the importance of deposit insurance, the need to address inequities
in the deposit insurance system, special assessment issues and borrowing under
the Depositor Protection Act of 2009, coverage levels, the need for a fairer
assessment method under systemic risk provisions, and mandatory rebates
Prepared testimony of
David Wright, CEO of Services Credit Union in Yankton, South Dakota on behalf
of the National Association of Federal Credit Unions, on NCUSIF, current
challenges in deposit insurance, proposed modifications to the NCUSIF, and
proposed amendments to the Federal Credit Union Act
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on Modernizing Bank Supervision and Regulation – Mar. 19
and Mar. 24, 2009
Video of the entire
March 19 hearing
Video of the entire
March 24 hearing
Prepared testimony of
John Dugan, Comptroller of the Currency, on improving systemic risk oversight,
resolving systemically significant firms, reducing the number of bank
regulators, enhanced mortgage regulation, and enhanced consumer protection
regulation
Prepared testimony of
Daniel Tarullo, Federal Reserve Governor, on consolidated supervision of
systemically important firms, improved resolution processes, oversight of
payment and settlement systems, consumer protection, and systemic risk
authority
Prepared testimony of
Sheila Bair, FDIC Chairman, on addressing systemic risk, limiting risk by
limiting size and complexity, managing the transition to a safer system, new
resolution procedures, consumer protection, changing the OTC market and the
protection of money market funds, and regulatory issues including the
originate-to-distribute model, executive compensation, fair value accounting, credit
rating agency reform, and counter-cyclical capital policies
Prepared testimony of
Michael Fryzel, National Credit Union Administration Chairman, on the need for
separate oversight of federally-insured credit unions, the importance of
maintaining a separate insurance fund, the unique characteristics of
federally-insured credit unions, and a recommendation for regulatory framework
Prepared testimony of
Scott Polakoff, Acting Director of the Office of Thrift Supervision, on the
structural and non-structural problems in the crisis, principles for
modernizing supervision and regulation, federal bank regulation, and systemic
risk regulation
Prepared testimony of
Joseph Smith, Jr., the North Carolina Commissioner of Banks, on behalf of the
Conference of State Bank Supervisors, on the role of the states in financial
services supervision and regulation, shortcomings of federalism in this crisis,
and needed regulatory reforms in mortgage origination and the financial
services industry, as well as attached charts and a document on state
initiatives to enhance supervision of the mortgage industry
Prepared testimony of
George Reynolds, Chairman of the National Association of State Credit Union
Supervisors and Senior Deputy Commissioner of the Georgia Department of Banking
and Finance, on the history and purpose of NASCUS, priorities for regulatory
restructuring, the importance of preserving the dual charter system and charter
choice, the importance of preserving the states' role in financial regulation,
and the need for comprehensive capital reform for credit unions
Prepared testimony of
William Attridge, President, CEO, and COO of Community River Bank, on behalf of
the Independent Community Bankers of America, on the state of community
banking, the need to address excessive concentration in banks, the need to
regulate and break up large institutions, the importance of maintaining a
diversified regulatory system, the importance of keeping banking and commerce
separate and maintaining the dual banking system, the sufficiency of current
consumer protections for depository institutions, the need to retain the
savings institutions charter and OTS, and the important role of the GSEs
Prepared testimony of
Daniel Mica, President and CEO of the Credit Union National Association, on the
importance of tailoring changes in credit union structure to need, the need for
an independent federal regulator of credit unions, support for specific modest
changes to improve NCUA operations, the need for a separate consumer protection
regulator, and historical lessons about credit union supervision
Prepared testimony of
Aubrey Patterson, Chairman and CEO of BancorpSouth, on behalf of the American
Bankers Association, on the need for a regulatory structure that provides a
systemic risk oversight mechanism, the need for a method that handles failures
of systemically significant non-bank institutions, and the need to close
regulatory gaps
Prepared testimony of
Richard Whalen, Senior Vice President and Managing Director of Institutional
Risk Analytics, on presidential regulation, market and liquidity risk,
supervision and consumer protection, insurance and resolution, systemic risk
regulation, consumer protection and credit access, and risk management
Prepared testimony of Gail Hillberand, Senior Attorney for Consumers Union of
U.S., on how consumer protection can reduce systemic risk, the need for a
change in federal regulatory culture, the need for a Financial Product Safety
Commission, the need for a restoration of state power to protect consumers, the
need for credit reform, systemic risk regulation, and accountability
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on Lessons Learned in Risk Oversight at Federal Financial
Regulators – Mar. 18, 2009
Video of the entire
hearing
Prepared testimony of
Scott Polakoff, Acting Director of the Office of Thrift Supervision, on the OTS
regulatory regime, critical risk areas including concentration risk, liquidity
risk, capital adequacy, loan loss provisions, and fair value accounting, and
regulatory restructuring
Prepared testimony of
Orice Williams, Director of Financial Markets and Community Investment at the
GAO, on the background of the regulatory regimes, differences in regulatory
approach among regulators, use of supervisory activities to assess risk
management at large, complex institutions, use of regularly scheduled targeted
examinations to manage risk at securities firms, use of various tools to manage
risk at banks, the aim of SEC oversight tools towards violations, the
recognition of weaknesses in risk management at specific institutions and with
specific models prior to the crisis despite lack of recognition of the threat
level, and limitations of the current structure including the focus on
individual institutions and limiting regulation to specific legal entities
Prepared testimony of
Roger Cole, Federal Reserve Director of Banking Regulation and Supervision, on
the Fed's regulatory structure, supervisory actions related to risk management
including liquidity risk management, capital planning and capital adequacy,
firm-wide risk identification and compliance risk management, actions related
to residential lending, counterparty credit risk, and commercial real estate,
and supervisory lessons learned
Prepared testimony of
Timothy Long, Senior Deputy Comptroller and Chief National Bank Examiner, on
the role of risk management, lessons learned, supervisory responses of the OCC,
OCC supervision of risk management at large national banks, coordination with
other supervisors, and the GAO report
Prepared testimony of
Erik Sirri, Director of the SEC's Division of Trading and Markets, on the CSE
program, observations and lessons learned from the program, and the GAO report
·
House Financial Services Committee Hearing on
Regulation of Systemic Risk in the Financial Services Industry – Mar. 17,
2009
Video of the entire
hearing
Prepared testimony of
Steve Bartlett, President and CEO of the Financial Services Roundtable, on the
need for regulatory reform, the Roundtable's reform proposal, necessary
principles in addition to rearranging regulatory roles, consumer protection,
insurance regulation, the definition of systemic risk, reasons for designating
the Fed as market stability regulator and the role of this position, effects of
creating the position, the functions of a market stability regulator, the
impact this position would have had on the crisis had it been created earlier,
comparison with other proposals, and reasons for current action, as well as
appended details of the proposal
Prepared testimony of
Timothy Ryan, Jr., President and CEO of the Securities Industry and Financial
Markets Association, on SIFMA's consideration of the need for a market
stability regulator, its support for the creation of such a regulator, the
mission of the regulator, the powers and duties of such a regulator, possible
agencies that could fill this role, and international cooperation
Prepared testimony of
Peter Wallison, Arthur F. Burns Fellow in Financial Policy Studies at the
American Enterprise Institute, on the difficulties in identifying systemically
significant institutions, the problems of differential regulation for these
institutions, functional limitations on a regulator's scope of knowledge, and
the problems with the Fed as a systemic risk regulator
Prepared testimony of
Terry Jorde, President and CEO of Country Bank USA, on behalf of Independent
Community Bankers of America, on the need to address excessive concentration of
banking assets, the failure of banking and antitrust laws to prevent this
concentration, the strength of community banking, the need to maintain
diversity in the regulatory structure, identification and regulation of
systemically risky institutions, regulatory fees, resolving systemically risky
institutions, breaking up these institutions and preventing new threats, and
the need to strengthen the separation of banking and commerce
Prepared testimony of
Travis Plunkett, Legislative Director of the Consumer Federation of America, on
the systemic threat of the shadow banking system, other risk-related
priorities, the need to improve systemic risk oversight, the advantages of a
single systemic risk regulator, possible regulators and the need for an
advisory panel to oversee regulation no matter which agency is in charge,
selecting systemically risky institutions, and regulatory procedures
Prepared testimony of
Damon Silver, Associate General Counsel of the AFL-CIO, on the Congressional
Oversight Panel's recommendations related to systemic risk, executive pay, risk
asymmetry, defining systemic risk, history of federal policy related to
systemic risk, lessons from the crisis, regulatory structure and approach, and
the powers of a systemic risk regulator, as well as appended AFL-CIO statements
on various related topics and a fact sheet
Prepared testimony of
Edward Yingling, President and CEO of the American Bankers Association, on the
ABA's support for a systemic risk regulator, the need for authority over
development and implementation of accounting rules, the importance of uniform
standards, the need to deal with failing non-bank institutions that pose a
systemic risk, and the need to close regulatory gaps
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on Modernizing Insurance Regulation – Mar. 17, 2009
Video of the entire
hearing
Prepared testimony of
Michael McRaith, Director of the Illinois Department of Financial and
Professional Regulation, on behalf of the National Association of Insurance
Commissioners, on competitiveness in insurance, state and federal involvement
in identifying and managing systemic risk, the importance of functional
regulation, the example of AIG, the benefits of an Office of Insurance
Information at the federal level, the problems with the optional federal
charter idea, the Interstate Insurance Compact as an alternative, the need for
reforms in licensing and reinsurance, the importance of solvency protection,
the Financial Analysis Working Group, the Solvency II directive, and the local
nature of consumer protection
Prepared testimony of
Frank Keating, President and CEO of the American Council of Life Insurers, on
the significance of the life insurance industry, systemic risk of individual
companies, suggestions for regulatory structure in addressing systemic risk,
and effects of federal decisions on the state-regulated insurance industry
Prepared testimony of
William Berkeley, Chairman and CEO of the W. R. Berkeley Corporation, on behalf
of the American Insurance Association, on the limited systemic risk of
property-casualty insurance, the need to create an independent federal
functional insurance regulator if property-casualty insurance is to be included
within oversight, international comparisons, and support for the National
Insurance Act
Prepared testimony of
Spencer Houldin, President of Ericson Insurance Services, on behalf of the
Independent Insurance Agents and Brokers of America, on the survival of the
property-casualty insurance market through the financial crisis, the failure of
AIG, state insurance regulation's consumer protection, systemic risk oversight,
support for targeted regulatory reform, and the problems with the optional
federal charter idea
Prepared testimony of
John Hill, Chairman and COO of Magna Carta Companies, on behalf of the National
Association of Mutual Insurance Companies, on the state insurance regulatory
system's benefits and disadvantages, consumer protection, guaranty funds, risk
regulation in the property-casualty insurance industry, systemic risk, problems
with proposed regulatory solutions, the benefits of establishing an Office of
Insurance Information, the need for federal standards as opposed to a single
regulator, interstate issues, and the elements of effective regulation
Prepared testimony of
Frank Nutter, President of the Reinsurance Association of America, on the
reinsurance market, regulation of the market, the need for a single federal
regulator, the importance of mutual recognition and smoothing out issues with
the extra-territorial application of state laws, principles for effective
regulation, issues surrounding the proposal for a systemic risk regulator, and
regulatory modernization
Prepared testimony of
Robert Hunter, Director of Insurance for the Consumer Federation of America
(CFA), on CFA's ongoing policy review of insurance regulation, systemic risk,
findings of current research, opposition to an optional federal charter,
support for repeal of the McCarran-Ferguson anti-trust exemption and for
allowing the FTC to study insurance, and other federal legislation, with
attached documents on consumer principles and standards for insurance
regulation, regulatory reform principles, and the text of testimony at a public
hearing on the topic
·
Joint Economic Committee Hearing on TARP
Accountability and Oversight – Mar. 11, 2009
Video of the entire
hearing
Prepared testimony of
Alex Pollock, Resident Fellow with the American Enterprise Institute, on the
context of banking bailouts, accountability for bailout operations, and lessons
from the Reconstruction Finance Corporation in the 1930s
Prepared testimony of
Nicole Tichon, Tax and Budget Advocate for the U.S. Public Interest Research
Group, on U.S. PIRG's Report Card on reform implementation and recommendations
for reform legislation, as well as an attached report on failures of TARP
implementation in the Bush Administration
Prepared testimony of
Richard Neiman, New York Superintendent of Banks, on behalf of the
Congressional Oversight Panel, on the Panel's report on foreclosure mitigation
and the need for more data on foreclosures and delinquencies
Prepared testimony of
Damon Silvers, Associate General Counsel for AFL-CIO and Deputy Chairman of the
Congressional Oversight Panel, on the role of the Panel, preparation for the
reports issued so far, methodologies, and implications for TARP implementation
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on Enhancing Investor Protection and the Regulation of
Securities Markets – Mar. 10, and Mar. 26, 2009
Video of the entire
hearing, day one
Video of the entire
hearing, day two
Prepared testimony of
John Coffee, law professor at Columbia University, on the real estate bubble,
credit rating agencies as gatekeepers, SEC responsibility, regulatory models,
roles of regulators in the "twin peaks" model, the lessons of the
Madoff scheme, problems with asset-backed securitization, and rehabilitating
the gatekeepers
Prepared testimony of
Lynn Turner, former Chief Accountant of the SEC, on the root causes of the
crisis, basic principles for reform including independence, transparency,
accountability, enforcement, and adequate resources, needed reforms to
regulatory structure, gaps in regulation, ways to improve accountability
through improved governance and investor rights, ways to increase transparency,
ways to improve FINRA, and steps to improve enforcement
Prepared testimony of
Timothy Ryan, Jr., President and CEO of the Securities Industry and Financial
Markets Association, on the current fragmented regulatory structure, systemic
risk, the need for a single financial markets stability regulator, the need for
a new core set of standards governing the business conduct of financial
institutions, the need to harmonize regulation over investment advisors and
broker-dealers, the need to broaden the authority of the Municipal Securities
Rulemaking Board, the need to merge the SEC and CFTC, the need to improve
regulation of OTC derivatives, and the importance of international cooperation
Prepared testimony of
Paul Schott Stevens, President and CEO of the Investment Company Institute, on
recommendations to create a new Systemic Risk Regulator and Capital Markets
Regulator, the benefits of these new positions, the need for regulation of
hedge funds, derivatives, municipal securities, investment advisors, and
broker-dealers, the significance of money market funds and impact of the crisis
on these funds, regulatory actions to unfreeze credit markets, and plans for an
industry-led reform initiative, as well as an attached appendix on the
recommendations given in testimony
Prepared testimony of
Mercer Bullard, associate law professor at the University of Mississippi and
President of Fund Democracy, on regulatory issues with money market funds and
mutual funds, 529 plans, hedge funds, and investment advisers
Prepared testimony of
Robert Pickel, Executive Director and CEO of the International Swaps and
Derivatives Association, on how credit default swaps work, the growth of credit
default swaps and the industry's infrastructure, the role of credit default
swaps in the crisis, and evolution of the industry
Prepared testimony of
Damon Silvers, Associate General Counsel for AFL-CIO, on regulatory
architecture including recommendations for SEC reform, the need to subsume
regulation of hedge funds and derivatives under the SEC and possibly merge with
the CFTC, the need for improved governance, the importance of a comprehensive
approach to executive pay, the need to address immunity in securities fraud
cases, and the international context
Prepared testimony of
Thomas Doe, CEO of Municipal Market Advisors, on the municipal market, growth
of the market, systemic risk, the penal rating scale, and ways to improve
regulation, with appended documents on the history of the organization, the
effects of the crisis on the municipal market, regulation issues, disclosure
and investor protection, undisclosed risks of bank bonds and swaps, auction
rate securities and unchecked systemic risks, municipal bond ratings and bond
insurance, and pricing and evaluation issues
Prepared testimony of
Mary Schapiro, SEC Chairman, on the importance of a capital markets regulator
devoted to investor protection, the importance of keeping such a regulator
independent, and the value of a strong and independent capital markets
regulator to systemic risk oversight
Prepared testimony of
Fred Joseph, President of the North American Securities Administrators
Association, on state securities regulation, core principles for regulatory
reform, and suggested Congressional actions to address each core principle
Prepared testimony of
Richard Breeden, former SEC Chairman, on investor protection, systemic risk and
supervision of market participants, common supervisory rules, reorganization of
failed firms, risk management, credit rating problems, levered short selling,
credit default swaps, regulatory reform, and recommended specific steps
Prepared testimony of
Arthur Levitt, former SEC Chairman, on core regulatory principles and specific
recommendations for regulatory reform
Prepared testimony of
Paul Atkins, former SEC Commissioner, on the need for forthright analysis,
causes of the SEC's operational failures, and proposals for financial services
reform
Prepared testimony of
Richard Ketchum, FINRA Chairman and CEO, on FINRA's investor protection
programs and current regulatory gaps
Prepared testimony of
Ronald Stack, Chair of the Municipal Securities Rulemaking Board, on the way
MSRB operates and its market transparency and surveillance activities,
background on the municipal securities market, MSRB actions to promote
transparency in the market, the need for an expanded MSRB role to enhance investor
protection and securities market regulation, and recommendations
Prepared testimony of
Richard Baker, President and CEO of the Managed Funds Association, on systemic
risk regulation, prudential regulation, and short selling
Prepared testimony of
James Chanos, Chairman of the Coalition of Private Investment Companies, on the
state of the hedge fund sector, mitigation of systemic risk, hedge funds and
functional regulation, and hedge funds as financial investors
Prepared testimony of
Barbara Roper, Director of Investor Protection for the Consumer Federation of
America, on recommended responses to the crisis, harmful policies that need to
be reversed, and needed pro-investor reforms, with appended testimony on
systemic risk
Prepared testimony of
David Tittsworth, Executive Director and Executive Vice President of the
Investment Adviser Association, on regulatory reform and issues with the
Investment Advisers Act
Prepared testimony of
Rita Bolger, Senior Vice President and Associate General Counsel for Standard
& Poor's, Global Regulatory Affairs, on the current NRSRO regulatory
regime, the SEC's exercise of its oversight authority under the current regime,
S&P's initiatives to enhance the ratings process and promote confidence,
and potential regulatory measures
Prepared testimony of
Daniel Curry, President of DBRS, Inc., on DBRS's business as an NRSRO, the
importance of competition in the rating industry, the need for uniform
regulation, the need for regulatory stability, and recognition of the global
nature of credit ratings
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on AIG – Mar. 5, 2009
Video of the entire
hearing
Prepared testimony of
Donald Kohn, Vice Chairman of the Federal Reserve, on the nature of AIG, its
involvement in the markets, the reasons why AIG was not allowed to fail, the
details of the Federal Reserve's involvement with AIG, AIG's activities and
performance, oversight, and adjustments in the strategy for AIG
Prepared testimony of
Scott Polakoff, Senior Deputy Director and COO of the Office of Thrift
Supervision, on the history of AIG, OTS supervisory responsibilities and
actions, lessons learned, and recommendations for regulatory changes
Prepared testimony of
Eric Dinallo, Superintendent of the New York State Insurance Department, on the
relationship of his department to AIG, the origin of AIG's financial problems,
the nature of AIG's companies and their regulation, reasons that federally
chartering insurance companies is not an appropriate solution, securities
lending in general, and AIG's securities lending program
·
Senate Budget Committee Hearing on Economic and
Budget Challenges for the Short and Long Term – Mar. 3, 2009
Video of the entire
hearing
Prepared testimony of
Ben Bernanke, Chairman of the Federal Reserve, on economic developments and the
Fed's response and on fiscal policy in
the current environment
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on Consumer Protections in Financial Services – Mar. 3,
2009
Video of the entire
hearing
Prepared testimony of
Steve Bartlett, President and CEO of Financial Services Roundtable, on the
roots of the crisis, methods of consumer protection through regulatory reform,
TARP and fair value accounting, and the details of the Roundtable's proposal
including a new Financial Markets Coordinating Council, the consolidation of
existing agencies into a new National Financial Institutions Regulator, the
creation of a National Capital Markets Agency that would merge the SEC and
CFTC, and the reinvention of the FDIC as an expanded National Insurance
Resolution Authority
Prepared testimony of
Ellen Seidman, Senior Fellow of the New America Foundation and Executive Vice
President of ShoreBank Corporation, on causes of the crisis and regulatory
problems, the social context of reform, principles for regulatory reform
including functional regulatory structure, methods of consumer protection that
go beyond disclosure, and enforcement, the possibilities of a single regulatory
entity, and some problems with that model
Prepared testimony of
Patricia McCoy, law professor at the University of Connecticut, on reckless
lenders' ability to crowd out good lenders, the race to the bottom in mortgage
regulation, regulatory failures of the OCC, OTS, and Federal Reserve, and
recommendations on uniform federal safety standards for consumer credit and a
federal agency dedicated to consumer protection
·
Joint Economic Committee Hearing on Restoring
the Economy – Feb. 26, 2009
Video of the entire
hearing
Prepared testimony of
Robert Altman, Chairman and CEO of Evercore Partners, on origins of the crisis,
the insufficiency of recovery, the continuation of the credit crisis, federal
policy responses, and Obama administration initiatives
Prepared testimony of
Joseph Mason, economics professor at Louisiana State University, on short-term
and long-term solutions for restoring the economy
Prepared testimony of
Adam Posen, Deputy Director of the Peterson Institute for International
Economics, on the danger of the public-private state of the banks and lack of
money in the banking system, the need to evaluate solvency of individual banks
and quickly decide how to treat them, the lack of importance of "finding
the right price" for troubled assets, the need to limit bank size when
selling and merging failed banks, and the importance of taking these actions
before stimulus money runs out
Prepared testimony of
Paul Volcker, Chairman of the President's Economic Advisory Board, on the
long-term build-up to the crisis, the turmoil in the financial markets,
weaknesses in accounting and credit rating agency practices, lapses in
financial supervision and regulation, the G-30 report, approach to
institutions, and regulatory cooperation
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on the Homeowner Affordability and Stability Plan – Feb.
26, 2009
Video of the entire
hearing
Prepared testimony of
Shaun Donovan, HUD Secretary, on the dangers of the crisis to households, the
Homeowner Affordability and Stability Plan's elements and benefits, and other
measures to address the impact of the crisis on residential neighborhoods
·
House Financial Services Committee Hearing on
Monetary Policy and the State of the Economy – Feb. 25 & 26, 2009
Video of the entire
hearing, day one
Video of the entire
hearing, day two
Prepared testimony of
Ben Bernanke, Chairman of the Federal Reserve, on economic developments and the
Fed's responses, the Fed's transparency, and the economic outlook
Prepared testimony of
James Galbraith, Chair in Government/Business Relations at the University of
Texas at Austin, on the undue optimism reflected in the recovery plan, the need
to go beyond monetary policy and beyond focus on the banking sector, the danger
in trying to use entitlement reform to fix the problem, alternative approaches
to the administration's foreclosure prevention strategy, and the need to focus
on long-term projects including energy alternatives, infrastructure, and
improving the position of the dollar through innovation
Prepared testimony of
Alan Blinder, economics professor and Co-Director of the Center for Economic
Policy Studies at Princeton University, on interest rate policy, quantitative
easing, transparency, and bank nationalization
Prepared testimony of
John Taylor, economics professor at Stanford University and Senior Fellow with
the Hoover Institution, on credit easing, how the Fed funds purchases of
private securities and lending, the Fed's current strategies, the relationship
with the interest rate and quantity of money, and criticisms and
recommendations related to Fed policy
·
House Financial Services Committee Oversight
and Investigations Subcommittee Hearing on TARP Oversight, Accountability, and
Transparency – Feb. 24, 2009
Video of the entire
hearing
Prepared testimony of
Neil Barofsky, TARP Special Inspector General, on use of TARP funds so far,
SIGTARP's mission, transparency mechanisms, coordination with federal agencies
on oversight, enforcement functions, and initial actions in the area of
enforcement
Prepared testimony of
Gene Dodaro, Acting Comptroller General, on creation of programs in addition to
the Capital Purchase Program, efforts to establish the Office of Financial
Stability, and challenges in measuring TARP's impact
Prepared testimony of
Elizabeth Warren, Chair of the Congressional Oversight Panel and law professor
at Harvard University, on the Oversight Panel's functions and how it fits into
the TARP oversight framework, coordination between the three oversight
organizations, the Oversight Panel's approach, and the need for a clear
articulation on the use of TARP funds
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on Strengthening Credit Card Protections – Feb. 12, 2009
Video of the entire
hearing
Prepared testimony of
Travis Plunkett, Legislative Director of the Consumer Federation of America, on
cardholders' signs of economic stress, caution taken by consumers in taking on
new credit card debt, issuers' encouraging risky and
"unsophisticated" households to run up unsustainable levels of debt,
abusive interest rate, fee, and risk management policies, criticisms of these
practices, the need to enact the new federal rule on unfair and deceptive
credit card practices more quickly, the need to ensure that credit card issuers
receiving government assistance offer fair and sustainable loans, the Credit
CARD Act, and other proposals
Prepared testimony of
James Sturdevant, an attorney testifying on behalf of the National Association
of Consumer Advocates, on Sturdevant's professional background, credit card
abuses, universal default clauses, balance transfers, unfair timing of payments
rules, skyrocketing credit card debt, and proposed reforms
Prepared testimony of
Kenneth Clayton, Senior Vice President and General Counsel for the American
Bankers Association Card Policy Council, on the significance of Federal Reserve
rule changes that address major consumer concerns, the impact of changes
already made, the need to allow time for these changes to run their course, and
the problems with the Credit Card Accountability Responsibility and Disclosure
Act
Prepared testimony of
Lawrence Ausubel, economics professor at the University of Maryland, on
calculations comparing interest rate increases to default risk and the context
of the current crisis, as well as an attached article on the topic
Prepared testimony of
Todd Zywicki, law professor at George Mason University, on the problems that
are alleged to be solvable through greater regulation, cost-benefit analysis of
three possible types of regulation, and the modern case for regulation
Prepared testimony of
Adam Levitin, associate law professor at Georgetown University, on the
inefficient and irresponsible use of credit cards due to pricing that is not
transparent, the nature of billing tricks and traps that encourage unsound
lending, the need to create a regulatory system that can keep up with
innovation in the area, and the myth of risk-based pricing
·
House Financial Services Committee Hearing on
Use of Federal Assistance by the First TARP Recipients – Feb. 11, 2009
Video of the entire
hearing
Prepared testimony of
Lloyd Blankfein, Chairman and CEO of Goldman Sachs, on the Capital Purchase
Program, Goldman Sachs' use of the new capital, and its role in the markets
Prepared testimony of
James Dimon, Chairman and CEO of JPMorgan Chase, on his institution's
activities prior to the Capital Purchase Program, its current operations,
foreclosure prevention efforts, compensation policies, and the state of the
financial industry
Prepared testimony of
Robert Kelly, Chairman and CEO of the Bank of New York Mellon, on the bank's
business model, performance in 2008, reasons for participation in the Capital Purchase
Program, and use of the funds so far
Prepared testimony of
Ken Lewis, Chairman and CEO of Bank of America, on the need to lend as much as
responsibly possible, Bank of America's lending and restraints on its ability
to do so, future lending goals, the need for TARP funds, transparency concerns,
and cuts in executive compensation
Prepared testimony of
Ronald Logue, Chairman and CEO of State Street Corporation, on State Street's
role in the financial system, the purpose of Capital Purchase Program investment,
State Street's use of the investment, accountability and transparency concerns,
and executive compensation
Prepared testimony of
John Mack, Chairman and CEO of Morgan Stanley, on changes at Morgan Stanley in
reaction to the crisis, its business model, use of TARP funds, disclosure,
executive compensation, and needed reforms
Prepared testimony of
Vikram Pandit, CEO of Citigroup, on Citigroup's use of TARP funds, changes made
in light of the crisis, and the need to strengthen the company, as well as an
attached detailed report on Citigroup's use of TARP funds
Prepared testimony of
John Stumpf, Chairman and CEO of Wells Fargo, on the bank's business and
lending practices, safeguards that are in place, foreclosure prevention
efforts, and loan modification practices
·
Senate Budget Committee Hearing on Policies to
Address the Housing and Financial Crises – Feb. 11, 2009
Video of the entire
hearing
Prepared testimony of Timothy Geithner, Treasury Secretary, on the Financial
Stability Plan, new transparency requirements, risk assessment, the
Public-Private Investment Fund, the Consumer and Business Lending Initiative, a
new comprehensive housing program, and regulatory reform
·
House Financial Services Committee Hearing on
the Federal Reserve's Efforts to Provide Liquidity in the Crisis – Feb.
10, 2009
Video of the entire
hearing
Prepared testimony of
Ben Bernanke, Chairman of the Federal Reserve, on the Federal Reserve's
programs to strengthen credit markets and the economy overall, use of Section
13(3) of the Federal Reserve Act to make loans to financial institutions,
transparency, and disclosure
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on a New Plan for TARP – Feb. 10, 2009
Video of the entire
hearing
Prepared testimony of
Timothy Geithner, Treasury Secretary, on the lack of investor confidence, the
importance of transparency, the need for realistic risk assessment, the
Public-Private Investment Fund, the Consumer and Business Lending Initiative, a
comprehensive housing program, and regulation
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on TARP Oversight – Feb. 5, 2009
Video of the entire
hearing
Prepared testimony of
Gene Dodaro, Acting Comptroller General, on the TARP program, the creation of
programs in addition to the Capital Purchase Program, ongoing efforts to
establish the Office of Financial Stability, and challenges in measuring TARP's
impact on credit markets and the economy
Prepared testimony of
Neil Barofsky, TARP Special Inspector General, on the TARP program, focuses
since implementation, transparency and oversight actions and concerns,
coordination with other agencies, audit initiatives, and initial
recommendations
Prepared testimony of
Elizabeth Warren, Chair of the TARP Congressional Oversight Panel, on the
Oversight Panel's duties, initial questions posed to Treasury about TARP
implementation and responses, the need for responsibility to go along with the
flexibility allowed by TARP, analysis of the program so far, and specific
concerns about foreclosure mitigation
·
House Financial Services Committee Hearing on
the Madoff Ponzi Scheme – Feb. 4, 2009
Video of the entire
hearing
Prepared testimony of
Harry Markopolos, Chartered Financial Analyst and Certified Fraud Examiner, on
his contacts with and warnings to the SEC about Madoff from 2000-08, failures
of the SEC, suggestions for restructuring, the need for more qualified SEC
employees and competitive compensation, ways to improve ethics at the agency
and the examination process, alternatives including disbanding the SEC or
dividing its responsibilities, and recommendations for the new SEC Chair, as
well as an extensive appendix of support materials for the investigations
discussed
Joint prepared
testimony of SEC Directors Andrew Donohue, Lori Richards, Erik Sirri, and Linda
Thomsen and Acting SEC General Counsel Andrew Vollmer on the SEC's mission, its
creation and organization, the demographics of the securities markets regulated
by the SEC, some of the laws and regulations that apply to broker-dealers and
investment advisors, examination protocols, the SEC's receipt of tips,
complaints, and reports, coordination within the SEC, enforcement actions
involving Madoff and past investigations and examinations of the Madoff firm,
and potential reforms
Prepared testimony of
Stephen Luparello, FINRA Interim CEO, on FINRA's activities, its oversight of
Madoff's operations, and issues raised by Madoff's fraud including issues with
custody and feeder funds, the need for greater information sharing and
oversight of dual registrants, disparate regulatory oversight of broker-dealers
and investment advisers, and the need for consistent investor protection across
financial services channels
·
Senate Committee on Banking, Housing, and Urban
Affairs Hearing on Modernizing the U.S. Financial Regulatory System –
Feb. 4, 2009
Video of the entire
hearing
Prepared testimony of
Paul Volcker, Chair of the President's Economic Recovery Advisory Board and
former Chairman of the Federal Reserve, on the G-30 Report on Financial Reform
(see Speeches and Statements by Banks, Financial Institutions, and Others
below), the need for immediate and effective government action, the need for
reform that will allow growth without systemic breakdown, the functions of a
financial system, the importance of financial institutions, recommendations for
these and diverse institutions, room for country-to-country variations in
certain areas, and other areas of emphasis in the aforementioned Report
Prepared testimony of
Gene Dodaro, Acting Comptroller General, on the GAO's January 8, 2009 report on
modernizing the regulatory system, the development of the current regulatory
system, the challenges brought by changing financial institutions and products,
and a detailed framework for assessing alternatives to the current system, as
well as supporting tables within the document
·
House Financial Services Committee Hearing on
Promoting Bank Liquidity and Lending Through Deposit Insurance, Hope for
Homeowners, and Other Enhancements – Feb. 3, 2009
Video of the entire
hearing
Prepared testimony of
John Bovenzi, Deputy to the Chairman and COO of the FDIC, on the importance of
liquidity, the Temporary Liquidity Guarantee Program, the FDIC's authority to
assess systemic risk, the importance of a strong and flexible deposit insurance
system, foreclosure mitigation under EESA, the Capital Purchase Program, and
the importance of using additional liquidity to lend to creditworthy borrowers
Prepared testimony of
Meg Burns, Director of the HUD Office of Single Family Program Development, on
the current status of the Hope for Homeowners program, the need for
modifications to the program, and the particular importance of considering
elimination of the upfront mortgage insurance premium, stronger incentives for
subordinate lien holders, and the creation of shared equity and shared
appreciation documents on federal pre-emption of state laws to avoid reluctance
to engage in the program in certain states
Prepared testimony of
Edward Yingling, President and CEO of the American Bankers Association, on the
need to make the deposit insurance limit increase permanent, the benefits of
enlarging FDIC's borrowing authority with the Treasury, the need to provide the
FDIC flexibility to spread cost of systemic risk determination across the
institutions that benefited most but also to require the FDIC to clearly
outline its forecasted use of the systemic risk exception in different
scenarios, the negative effect that some FDIC-proposed changes may have on
liquidity, the benefits of proposed changes to the Hope for Homeowners program
for troubled borrowers' access, and the need to fully fund the Capital Purchase
Program
Prepared testimony of
Michael Menzies, President and CEO of Easton Bank and Trust Company, on behalf
of the Independent Community Bankers of America, on the need to make permanent
the deposit insurance limit increase, issues under the Temporary Liquidity
Guarantee Program, the benefits for community banks of extending the
Transaction Account Guarantee Program, community banks' difficulties in
accessing TARP and the Capital Purchase Program, community banks' foreclosure
mitigation efforts, and the need to increase the FHA's resources and capacity
Prepared testimony of
John Taylor, President and CEO of the National Community Reinvestment
Coalition, on the continuing foreclosure cycle, the need to enact proposed
deposit insurance changes, the need to reduce cost to consumers through
proposed changes in the Hope for Homeowners program, the need for a safe harbor
provision for servicers, the need to enact a broad loan modification program
such as HELP Now to supplement the changes to the Hope for Homeowners program,
and the need for the government to purchase troubled assets
Prepared testimony of
John Courson, President and CEO of the Mortgage Bankers Association, on the
progress of the housing market crisis and current trends, the need for changes
to the Hope for Homeowners program, the need for additional protections for
servicers in addition to a safe harbor provision, the need to amend the Fair
Debt Collection Practices Act to increase servicers' ability to work with
borrowers, the need to use TARP for its original purpose, suggested changes for
commercial/multifamily mortgages, the proposed Mortgage Improvement and
Regulation Act, suggestions to improve the FHA, the need for new warehouse
lines of credit, and the importance of the secondary mortgage market
Prepared testimony of
Michael Calhoun, President and COO of the Center for Responsible Lending, on
the failures of voluntary loan modifications to prevent foreclosures, legal and
structural obstacles to modifications, the need for incentives to participation
in the Hope for Homeowners program such as flexibility in write-downs,
elimination of the requirement that homeowners share appreciation with the
government, financial incentives for servicers, and reduced premiums, the need
for a workable solution to second liens, the need to reduce the tax burden on
participating homeowners and allow judicial modifications, the need to prevent
abuses within the FHA, and the importance of a safe harbor provision combined
with changes to the REMIC laws
Prepared testimony of
Robin Staudt, a private citizen, on the impact of the housing crisis on her
personal situation and that of her friends, family, and community
Prepared testimony of
Edward Morrison, professor at Columbia Law School, on his objections to
"cramdown" legislation, the reasons why cramdown legislation is
unnecessary, the benefits of focusing on the safe harbor provision instead, and
a proposal to eliminate barriers to loan modifications including second liens
- Senate
Budget Committee Hearing on the Global Economy – Jan. 29, 2009
Video of the entire
hearing
Prepared testimony of
Simon Johnson, MIT professor and Senior Fellow at the Peterson Institute for
International Economics, on different forecasts for the economy, the progress
of the crisis, the present situation in different countries around the world,
implications for global policy including the idea of a global fiscal stimulus,
and recommendations for the future, including helpful links for understanding
the crisis
Prepared testimony of
Brad Setser, Fellow for Geoeconomics at the Council on Foreign Relations, on
the global nature of economic contraction, contraction in trade, the reverse of
global capital flows, and forecasts, with attached supporting data
Prepared testimony of
Tim Adams, Managing Director of the Lindsey Group, on current global
conditions, upcoming global challenges, and implications for U.S. policy
including the need for a fiscal stimulus, the need to stabilize the banking
sector, the need for a stronger IMF and increased development assistance, the
importance of addressing global imbalances, and the need to stabilize the
long-run fiscal outlook
- Senate
Budget Committee Hearing on the Federal Response to the Housing and
Financial Crisis – Jan. 28, 2009
Video of the entire
hearing
Prepared testimony of
Douglas Elmendorf, Director of the Congressional Budget Office, on continuing
financial problems, the need for a multifaceted strategy, comparisons with
other crises, elements of a rescue plan, foreclosure prevention efforts, the
costs of a financial rescue, and difference in response to the crisis between
the CBO and the Obama Administration, as well as data on actions already taken
and foreclosures
- Senate
Committee on Banks, Housing, and Urban Affairs Hearing on the Madoff Fraud
– Jan. 27, 2009
Video of the entire
hearing
Prepared testimony of
John Coffee, law professor at Columbia University, on the persistence of ponzi
schemes, particular schemes including Madoff's, the question of whether ponzi
schemes can be effectively prevented, and regulatory oversight by the SEC and
FINRA
Prepared testimony of
Henry Backe, an orthopedic surgeon, on the experience of his practice using
Madoff as an investment advisor for its retirement plan and the need to prevent
such schemes from affecting pension plans in the future
Prepared testimony of
Lori Richards, Director of the SEC Office of Compliance Inspections and
Examinations, on the SEC's examination program, the methodology for
prioritizing certain investment advisors for examination, the method of
identifying risk issues for examination, cause and sweep examinations, the
reason that the SEC did not examine Madoff as an investment advisor,
examinations of Madoff as a broker-dealer, and possible reforms to the model
Prepared testimony of
Linda Thomsen, Director of the SEC Division of Enforcement, on SEC
investigation of Madoff and his associates, others involved in investigations,
and the Division's handling of complaints, tips, and referrals
Prepared testimony of
Stephen Luparello, FINRA Interim CEO, on FINRA's operations, its oversight of
Madoff's broker-dealer operations, custody and feeder funds, the need for
greater information sharing and oversight of dual registrants, disparate
regulatory oversight of broker-dealers and investment advisers, and the need
for consistent investor protection across financial services channels
Prepared testimony of
Stephen Harbeck, President and CEO of the Securities Investor Protection
Corporation, on SIPC operations, limitations on oversight and investor
protection, the Lehman Brothers liquidation, the Madoff liquidation, SIPC
jurisdiction, the process and timetable of the Madoff case, sufficiency of the
SIPC fund, and the possible need to increase its credit line
- Senate
Budget Committee Hearing on Addressing Short- and Long-Term Fiscal
Challenges – Jan. 21, 2009
Video of the entire
hearing
Prepared testimony of
Alice Rivlin, Director of Greater Washington Research at the Brookings
Institution, on the economic outlook, the model of an
"anti-recession" package that goes beyond a fiscal stimulus, the need
to reform entitlement programs to reduce the deficit, the need for both
immediate reform and longer-term reform in this context, and the bipartisan
nature of the need for reform
Prepared testimony of
Robert Reischauer, President of the Urban Institute, on the relationship
between our immediate economic problems and the long-term problem of
sustainable growth, the wake-up call that the financial crisis presents, the
positions on how to best order responses to these two problems, a proposal for
simultaneous action on both, and possible measures to achieve this goal
Prepared testimony of
Rudolph Penner, Senior Fellow at the Urban Institute, on the difficulties of
providing policy advice in an historically unprecedented situation, the risk of
an excessive boom in reaction to fiscal stimulus, the danger of increasing
debt, the management capacity of the current bureaucracy and oversight
concerns, and the dangers of temporary spending becoming permanent, as well as
an appendix on long-run problems
·
House Financial Services Committee Hearing on
Use of TARP Funds – Jan. 13, 2009
Video of the entire
hearing
Prepared testimony of
Donald Kohn, Vice Chairman of the Federal Reserve, on the timeline of the
financial crisis thus far, the creation of TARP and related programs, increased
financial stability, the need to use remaining funds to prevent foreclosures,
two methods of foreclosure prevention, the Term Asset-Backed Securities Loan
Facility, suggestions for any remaining funds after foreclosure prevention to
be spent on capital injections and programs to deal with troubled assets, and
the rationale for public investment in the financial sector
Prepared testimony of
John Bovenzi, Deputy to the Chairman and COO of the FDIC, on the present state
of the economy, the need for the next tranche of TARP funds, the Temporary
Liquidity Guarantee Program, the Capital Purchase Program, the need for and
nature of a solution for troubled assets, the need for foreclosure prevention,
the FDIC's proposal for a guarantee program to prevent foreclosures, the
redefault problem, and accountability of financial institutions for funds under
the EESA
Prepared testimony of
Janet Murguía, President and CEO of the National Council of La Raza, on the
effect of discriminatory lending on the housing market, foreclosure prevention
in the Latino community, the need to prioritize foreclosures and credit markets
in the use of the remaining TARP funds, failure of TARP so far to decrease
foreclosures or provide credit to affected communities, lack of transparency
and accountability, the need for a mandatory systemic loan modification
program, the importance of increasing capital and credit specifically for
Latino communities, and the need for mandatory disclosure and accounting of
TARP funds
Prepared testimony of
John Taylor, President and CEO of the National Community Reinvestment
Coalition, on the failure of TARP fund use so far, the insufficiency of
voluntary loan modification, the need for a large-scale loan modification
program, the alternative proposal to use eminent domain to purchase loans, the
importance of third-party counselors in a loan modification program, the need
to protect renters' interests, the need for judicial loan modification, the
need to address unemployment through an economic recovery program along with
infrastructure and small business investments, and the importance of immediate
action such as passing the CRA Modernization Act and tightening regulation
Prepared testimony of
Edward Yingling, President and CEO of the American Bankers Association, on the
importance of differentiating between healthy banks and weak firms such as
automakers and financial firms, the need to segregate the Capital Purchase
Program from other TARP programs, the importance of capital injections, banks'
lending activities in the weakened economy, the ways in which capital injections
promote lending, benefits to and protections for the taxpayer, the importance
of full funding for the Capital Purchase Program, the need to use TARP funds to
help homeowners, recommended changes to the FDIC loan modification proposal and
Hope for Homeowners program, and the need to coordinate the Capital Purchase
Program with other programs to reduce confusion
Prepared testimony of
Cynthia Blankenship, Vice Chairman and COO of Bank of the West, on behalf of
Independent Community Bankers of America, on community banks' difficulty in
qualifying for the Capital Purchase Program, the relationship between TARP
capital injections and bank consolidation, poor behavior on the part of
examiners that leads to capital contraction, the need for regulators to adjust
their accounting requirements during the crisis, community banks' involvement
in foreclosure mitigation efforts, the need to make increases in deposit
insurance permanent, and the need for a systemic risk premium on very large and
interconnected banks
Prepared testimony of
Joe Robson, 2008 Chairman-Elect of the Board of the National Association of
Home Builders, on the benefits of the FDIC loan modification plan, steps taken
to loosen the credit crunch, the need to require institutions receiving TARP
funds to lend to creditworthy borrowers, the current conditions of residential
AD&C loans that are used to purchase land, develop lots, and build
infrastructure and homes, the impact of the credit crunch related to these
loans, proposed solutions, the lack of lending to multifamily developers, the
importance of the Low Income Housing Tax Credit and ways to revitalize it, and
suggestions to stimulate housing demand
Prepared testimony of
Charles McMillan, 2009 President of the National Association of Realtors, on
the need to refocus TARP funds on loosening the credit crisis, a proposed
housing stimulus plan, the need to maintain low mortgage interest rates, other
recommendations, and problems including increased GSE fees and lack of credit
in the commercial market
Prepared testimony of
Michael Calhoun, President and COO of the Center for Responsible Lending, on
the insufficiency of current loan modifications, legal and structural obstacles
to loan modification, the need to use TARP funds in a systematic approach to
loan modifications, the subsidizing effect of such a program on private loan
modification, the need for more aggressive modifications for GSE loans, the
benefits of requiring banks receiving TARP funds to establish systematic loan
modification programs, the need to use TARP to purchase second mortgages so
they can be consolidated and restructured, the need for a safe harbor provision
for servicers who modify loans, the need for a rule change that would allow the
government to purchase whole loans out of securities, a proposal for Treasury
to buy servicing rights of existing loans where servicers do not have enough
flexibility to modify, the need to set specific modification goals with
detailed reporting, the need to change tax rules to avoid undue burdens for
those undergoing a loan modification, the need for greater TARP oversight, and
the need to allow judicial loan modifications
Prepared testimony of
Chris Mayer, Senior Vice Dean and professor at Columbia Business School, on the
importance of addressing the housing crisis directly, the failure of
foreclosure prevention efforts thus far, expectations for the crisis if this
problem is not addressed directly, a proposal to stabilize the mortgage market
and housing prices through lower mortgage rates, another proposal to reduce
foreclosures, and the problems with the TARP Reform and Accountability Act as
compared with these proposals
·
House Financial Services Committee Hearing on FHA
Oversight of Loan Originators – Jan. 9, 2009
Video of the entire
hearing
Prepared testimony of
Phillip Murray, HUD Deputy Assistant Secretary for Single Family Housing
Programs, on the nature of FHA loans, FHA's insurance program and annual review
procedures, approval and monitoring standards for lenders, the work of the
Quality Assurance Division, the review and sanction process for violations, the
need for updated IT systems for FHA, and opposition to allowing bankruptcy
judges to modify mortgages
Prepared testimony of
James Heist, HUD Assistant Inspector General for Audit, on the Office of the
Inspector General, HUD's use of the FHASecure and Hope for Homeowners programs,
the strain on resources at the FHA, shrinking FHA funding, and the Office of
the Inspector General's concerns related to investigation and auditing of the
FHA
Prepared testimony of
George Hanzimanolis, former President of the National Association of Mortgage
Bankers, on the risk to the FHA program, the role of mortgage brokers in FHA
loan origination, monitoring of FHA loan originators, the strain on FHA
resources, and the recent increase in FHA loan limits
Prepared testimony of
John Courson, President and CEO of the Mortgage Bankers Association, on the
importance of a strong FHA to mortgage bankers, FHA's work in helping
lower-income and minority populations, FHA's growing share in the housing
market in recent years, the dangers of slackening the requirements to become an
FHA loan originator, and recommendations for FHA reform
·
House Financial Services Committee Hearing on
the Madoff Ponzi and the Need for Regulatory Reform – Jan. 5, 2009
Video of the entire
hearing
Prepared testimony of
H. David Kotz, SEC Inspector General, on the role of the Office of the
Inspector General, recent successful audits, investigation activities, and the
details of the Madoff investigation
Prepared testimony of
Stephen Harbeck, President and CEO of the Securities Investor Protection
Corporation, on SIPC's operations, the Lehman Brothers liquidation, and the
Madoff liquidation
Prepared testimony of
Allan Goldstein, investor in Madoff Securities, on his experience with a Madoff
retirement fund and his hopes that SIPC will distribute funds more quickly and
that Congress will establish a restitution fund for investors
Prepared testimony of
Tamar Frankel, law professor at Boston University, on the nature of ponzi
schemes, the difficulty of identifying them, the correlation between the
schemes and market bubbles, and the need for regulatory reform
Prepared testimony of
Leon Metzger, adjunct faculty member at Cornell, Columbia, New York, and Yale
Universities, on the current regulatory structure, suggestions to improve this
structure, the need for internal control of hedge funds, the benefits of using
a due diligence questionnaire, the relationship between risk and reward and
American investors' lack of understanding of this relationship, ideal valuation
practices, the need for more education about diversification and greater transparency,
the benefits of using independent third-party administrators and custodians for
hedge funds, the need to regulate hedge funds, the need to give investors
enough information to allow for effective risk management, the possibility of
mandatory peer review for CPA firms, and the problems of soft dollar
arrangements
·
House Financial Services Committee Hearing on
Oversight of TARP – Dec. 10, 2008
Video of the entire
hearing
Prepared testimony of
Gene Dodaro, Acting Comptroller-General, on Treasury Department implementation
of and actions under TARP, the start of the Capital Purchase Program and
associated uncertainties, the establishment of the Office of Financial
Stability, and difficulties in measuring the impact of TARP on the markets
Prepared testimony of
Neel Kashkari, Interim Assistant Secretary for Financial Stability at the
Treasury Department's Office of Public Affairs, on the elements of TARP
oversight established by Congress, Treasury's actions in areas identified by a
GAO report, reporting and transparency requirements, and means of evaluating
the results of the program
·
House Oversight Committee Hearing on Fannie Mae
and Freddie Mac – Dec. 9, 2008
Prepared testimony on
Leland Brendsel, former Chairman and CEO of Freddie Mac, on the importance of
the secondary market for home financing, the importance of maintaining
affordable thirty-year fixed mortgages, the history of Freddie Mac, and its
participation in the secondary market
Prepared testimony of
Daniel Mudd, former CEO of Fannie Mae, on efforts to improve Fannie Mae in the
2005-07 period, the roots of the crisis, the role of Fannie Mae and Freddie Mac
in past recessions and reasons why they could not withstand this crisis, Fannie
Mae's compliance with capital requirements, Mudd's objections to
conservatorship, the need for a new model that is not fully public or private,
and the importance of Fannie Mae's achievements prior to this crisis
Prepared testimony of
Franklin Raines, former Chairman and CEO of Fannie Mae, on Fannie Mae's
accomplishments during his time as Chairman and CEO, the causes of the crisis,
Fannie Mae's involvement in the crisis, the reasons for conservatorship, the
role of the regulators, the accounting restatement prepared 2004-06,
accountability, and the GSE model
Prepared testimony of
Richard Syron, former CEO of Freddie Mac, on the nature of the GSEs, their role
in the credit crisis, Freddie Mac's reasons for entering the subprime market,
and the benefits of the GSE model
Prepared testimony of
Charles Calomiris, professor of business at Columbia University, on the role of
the GSEs in the credit crisis and their future role
Prepared testimony of
Arnold Kling, adjunct scholar at the Cato Institute, on the causes of the
crisis, regulatory issues, the growth of and problems with securitization,
capital requirements for GSEs, the role of private securitization, the creation
of a bubble, and the role of credit default swaps
Prepared testimony of
Edward Pinto, former Chief Credit Officer of Fannie Mae and real estate
financial services consultant, on the lack of data available regarding the
subprime market and the GSEs, the role of GSEs in the crisis, the role of HUD,
the GSEs' subprime and Alt-A assets, consequences of holding these assets and
reasons for taking them on, how home equity fits in, and recommendations for
getting the GSEs out and avoiding future crises, as well as an extensive
appendix of research
Prepared testimony of
Thomas Stanton, Fellow at Johns Hopkins University and the National Academy of
Public Administration, on the GSEs' risky practices and the argument for
placing the GSEs in receivership, allowing them to function as wholly government-owned
corporations in order to support the market rather than operating as
privately-owned entities
·
House Financial Services Committee Hearing on
Stabilizing the Financial Condition of the Domestic Automobile Industry (Part
II) – Dec. 5, 2008
Video of the entire hearing
Text of the
restructuring plan submitted to Congress by Richard Wagoner, Chairman and CEO
of General Motors, including background information on the credit crisis and
its impact on GM, a request for funding from Congress and details of protections
for the taxpayer, details of the specific elements of the restructuring plan,
and collaboration efforts, as well as an appendix summarizing the elements of
the plan and providing supporting data
Text of the
restructuring plan submitted to Congress by Robert Nardelli, Chairman and CEO
of Chrysler, including background information on Chrysler, a request for
funding, Chrysler's business expectations and financial forecast through 2012,
safeguards built into the plan, and reasons for adopting the plan as opposed to
allowing bankruptcy
Prepared testimony of
Alan Mulally, President and CEO of Ford, on Ford's restructuring plan, its goal
of sustainable growth, business expectations, and the threat of bankruptcy
Prepared testimony of
Ron Gettelfinger, President of UAW, on suggested accountability measures for
the bridge loan, sacrifices made by auto workers and retirees, UAW's continued
negotiations, the need for broad sacrifice across the board, the dangers of
Chapter 11 reorganization, and additional recommended policies, as well as an
appended document going into detail on Chapter 11 reorganization
Prepared testimony of
Gene Dodaro, Acting Comptroller-General, on falling auto sales, principles for
Congress to use in considering the manufacturer's proposals, and application of
these principles
Prepared testimony of
Felix Rohatyn of FGR Associates on the near-bankruptcies of New York City in
1975 and Chrysler in 1980 as analogies to the current position of the auto
industry and lessons learned from those experiences
Prepared testimony of
Edward Altman, finance professor at New York University, on the benefits of
Chapter 11 reorganization for GM and possibly Chrysler and the likelihood of
bankruptcy for GM even if a bailout plan is approved, as well as attached data
to support the conclusion that GM's business is not viable and an attached
article arguing for Chapter 11 reorganization
Prepared testimony of
David Friedman, Research Director of the Clean Vehicles Program for the Union
of Concerned Scientists, on the need to structure financial assistance as an
investment rather than as a bailout to build taxpayer confidence and the
dangers of accepting the automakers' plan as is
Prepared testimony of
Damon Lester, President of the National Association of Minority Auto Dealers,
on the need to factor the needs of small dealers into federal assistance and
not allow consolidations that disadvantage small dealers
·
Senate Committee on Banks, Housing, and Urban
Affairs Hearing on the Domestic Automobile Industry (Part II) – Dec. 4, 2008
Video of the entire
hearing including Chairman Dodd's and Senator Akaka's statements, testimony,
and questioning by members of the committee.
Prepared testimony of
Gene Dodaro, Acting Comptroller-General, on appropriate principles with which
to approach federal financial assistance to the auto industry, the decline in
sales for the Big Three and reasons for this decline, and specific ways the
government can protect its interest when assisting the auto industry
Prepared testimony of
Ron Gettelfinger, President of UAW, on suggested accountability measures, the
need to condition a bridge loan on a viable restructuring plan, the sacrifices
already made workers and retirees in the auto industry, current UAW
negotiations, the need for other stakeholders to make sacrifices, the
inaccuracy of rumored salaries for union members, the need for restructuring to
take place over a period of time, the problems with "pre-packaged"
bankruptcy, the comparison between this bailout and the bank bailouts, the
actions of other countries to protect their industries, and other recommended
future policies
Prepared testimony of
Alan Mulally, President and CEO of Ford, on the need for a $9 billion credit
line as a safeguard for Ford, Ford's priorities for restructuring, measures
already taken, plans for growth including fuel efficiency, and the projected
impact of failure of one of the other Big Three automakers on Ford and the U.S.
economy as a whole
Prepared testimony of
Robert Nardelli, Chairman and CEO of Chrysler, on Chrysler's need for a $7
billion bridge loan and immediate TARP assistance, the effects of the financial
crisis on Chrysler, and Chrysler's financial plan including efforts to make the
company "green"
Prepared testimony of
Richard Wagoner, Chairman and CEO of General Motors, on GM's financial plan,
the need for $12 billion in short-term loans and a $6 million credit line, and
a proposed oversight element, as well as an attached copy of the financial plan
itself
Prepared testimony of
Keith Wandell, President of Johnson Controls, on his company's role as an
automotive supplier, the potential effect of a Big Three failure on suppliers
including effect on businesses owned by women or minorities, the extent of
troubles among suppliers so far, the importance generally of avoiding a Big
Three bankruptcy, and the specific impact on fuel-efficient vehicles
Prepared testimony of
James Fleming, President of the Connecticut Automotive Retailers Association,
on the potential impact of a Big Three bankruptcy on retailers, the current
rate at which retailers are going under, problems caused by lack of financing
for customers and layoffs, the impact of smaller inventories, reasons for
avoiding bankruptcy, and possible means of protection for the government's
interest in the event that a finance package is granted
Prepared testimony of
Mark Zandi, Chief Economist and Co-founder of Moody's Economy.com, on the
consequences of bankruptcy, the comparative financial positions of each of the
Big Three automakers, the increased costs for the government if the
restructuring package is not granted, the pressures of recession on the auto
industry, the difficulties in effectively restructuring, and a proposal to
provide the loan in two tranches to ensure that restructuring goes according to
plan
·
Senate Budget Committee Hearing on the Economic
Outlook and Options for Stimulus – Nov. 19, 2008
Video of the entire
hearing
Prepared testimony of Mark Zandi, Chief Economist and Co-Founder of Moody's
Economy.com, on the state of the financial markets, the failings of monetary
policy to improve the situation, the need for a large fiscal stimulus, the
argument for extending unemployment insurance and food stamp benefits, the
importance of aiding state and local governments, the effectiveness of
infrastructure spending, a suggestion to keep tax rates for those making less
than $250,000 a year low and provide tax incentives for small business
investment and home sales, a proposed payroll tax holiday, and the expected
impact of these proposed stimulus measures
Prepared testimony of
Simon Johnson, Senior Fellow at the Peterson Institute for International
Economics, on the roots of the financial crisis, the role of investor
confidence, the similarity of this crisis to the linked crises in emerging
markets in the late nineties, the problems with initial government responses,
the global impact of the crisis, the current situation of the markets and the
real economy, the state of the economy in Europe and emerging markets, the
goals of a stimulus, possible short-term and long-term programs, an argument
that the total amount of the stimulus should be $450 billion, and the solution
to a growing deficit
Prepared testimony of
John Taylor, professor of economics at Stanford University and Senior Fellow at
the Hoover Institution, on the current state of the economy, the impact of the
stimulus earlier in 2008, and principles for a new stimulus
·
House Financial Services Committee Hearing on
Stabilizing the Financial Condition of the Domestic Automobile Industry (Part
I) – Nov. 19, 2008
Video of the entire
hearing
Prepared testimony of
Richard Wagoner, Chairman and CEO of General Motors, on GM's successes and
future projections, actions already taken in response to the crisis, and the
need to support the auto industry
Prepared testimony of
Robert Nardelli, Chairman and CEO of Chrysler, on the link between lack of
access to credit and lack of liquidity in the auto industry, the impact of the
crisis on Chrysler's operations, the potential impact of bankruptcy on the
overall economy, the request for a $25 million bridge loan, existing and
suggested cutbacks, and the need for immediate assistance
Prepared testimony of
Alan Mulally, President and CEO of Ford, on Ford's new business model and
specific efforts to develop it, Ford's competitiveness, the impact of the
financial crisis, the disadvantages of Chapter 11 reorganization, the
interdependence of the auto industry, and the request for a bridge loan and the
public interest reasoning behind it
Prepared testimony of
Ron Gettelfinger, President of UAW, on UAW's support for the bridge loan, the
decline in auto sales caused by the crisis, the potential impact of a bankruptcy,
and the misplaced blame on union workers and gas-guzzling vehicles
Prepared testimony of
Annette Sykora, Chairman of the National Automobile Dealers Association, on the
economy's need for automobile sales to bounce back, the relationship between
manufacturers and dealers, the importance of a large dealer network, the impact
of shrinking credit on dealers' ability to operate, the need for consistent
regulation, the potential impact of bankruptcy on the economy, and policy
recommendations
Prepared testimony of
James McElya, Executive Chairman of Cooper Standard Automotive, on behalf of
the Motor & Equipment Manufacturers Association, on the need to include
suppliers in any rescue package for the auto industry, the benefits of
providing a loan to the industry through the TARP program, interdependence of
the auto industry, the role of suppliers, industry innovation, and the need for
liquidity, as well as an appendix of documents on supplier employment data,
suppliers involved in making different automobiles, the state of the industry,
new technologies, supplier bankruptcies, and supplier credit ratings
Prepared testimony of
Mathew Slaughter, international economics professor at Dartmouth College, on
the costs of a bailout to the auto industry, the benefits of allowing
bankruptcy and restructuring, and alternative ways that the federal government
can assist the industry without providing a bridge loan
·
Senate Committee on Banks, Housing, and Urban
Affairs Hearing on the Domestic Automobile Industry (Part I) – Nov. 18,
2008
Video of the entire
hearing including Chairman Dodd's opening statements, testimony, and
questioning by members of the committee
Prepared testimony of
Ron Gettelfinger, President of UAW, on the crisis facing the Big Three, the
consequences if these companies were to collapse, the lack of a connection
between unionization and financial failure, the lack of a connection between
manufacturing cars with poor gas mileage and financial failure, and the need
for an immediate loan
Prepared testimony of
Alan Mulally, President and CEO of Ford, on Ford's progress in changing its
business model, the financial results of these changes, the effect of the
financial crisis on the domestic auto industry and Ford in particular, Ford's
responses to these challenges, the need for liquidity through a bridge loan to
continue on a long-term path of growth and improvement, and the benefit to the
public interest in supporting the auto industry
Prepared testimony of
Robert Nardelli, Chairman and CEO of Chrysler, on the effect of the credit
crisis on customers and dealers, the need for a bridge loan, the reasons for
avoiding bankruptcy, possible protections for the taxpayer, the restructuring
that has already occurred, and the need for liquidity so that financial
companies can provide auto loans to customers
Prepared testimony of
Rick Wagoner, Chairman and CEO of General Motors, on GM's recent progress,
development of fuel-efficient vehicles, results prior to the financial crisis,
responses to the crisis, need for a loan, and the consequences of allowing the
domestic auto industry to fail
Prepared testimony of
Peter Morici, professor of business at the University of Maryland, on the need
to keep the domestic industry competitive, the declining market share of the
Big Three, the benefits of allowing bankruptcy and reorganization, the need for
a new labor agreement to become competitive, and alternative measures Congress
could take to increase domestic auto sales
·
House Financial Services Committee Hearing on
Oversight of Emergency Economic Stabilization Act Implementation, Government
Lending, and Insurance Facilities – Nov. 18, 2008
Video of the entire
hearing
Prepared testimony of
Henry Paulson, Treasury Secretary, on recent failures of financial
institutions, the objectives of the bailout plan, market failures and
government intervention in the U.S. and internationally, the change in strategy
from purchasing troubled assets to providing injections, market stabilization,
the reservation of TARP funds, and recommended action for the next
administration
Prepared testimony of
Ben Bernanke, Chairman of the Federal Reserve, on the Financial Stability
Oversight Board, the importance of capital injections, the focus on the market
for commercial paper and measures taken in this area, and the joint statement
of federal banking agencies (link in the Speeches & Statements by Banks,
Financial Institutions, and Others section below)
Prepared testimony of
Sheila Bair, FDIC Chairman, on the recent increase in deposit insurance, the
temporary liquidity guarantee program, TARP, the Hope for Homeowners Act, the
Emergency Economic Stabilization Act, IndyMac loan modifications, and a loss
sharing proposal
Prepared testimony of
Steve Bartlett, President and CEO of the Financial Services Roundtable, on the
Emergency Economic Stabilization Act, TARP, the continued stress on the
mortgage markets and high rate of foreclosures, and policy recommendations
Prepared testimony of Edward Yingling, President and CEO of the American
Bankers Association, on the causes of the crisis, the lack of culpability among
banks, recommendations for use of remaining TARP funds, the problem of
mark-to-market accounting, the need for more clarity on TARP, the need to let
banks participate in TARP regardless of the bank's organizational structure,
and the need for coordination among emergency programs
Prepared testimony of
Cynthia Blankenship, Vice Chairman and COO of Bank of the West, on behalf of
Independent Community Bankers of America, on TARP, the temporary liquidity
guarantee program, foreclosure mitigation efforts, the support of community
bankers for the Emergency Economic Stabilization Act and the wide availability
of TARP funding for banks, community banks' ability to lend and interest in the
Capital Purchase Program, concerns for private bank access to the Capital
Purchase Program, the need to review dividend policy for banks participating in
the program, and concerns about the ability to retroactively change contract
terms of the Securities Purchase Agreement
Prepared testimony of
Cameron Findlay, Executive Vice President and General Counsel for Aon
Corporation, on behalf of the Council of Insurance Agents and Brokers, on the
importance of insurance to financial markets, the inadequacy of the injection
approach and the danger of illiquid assets, a proposed insurance program for
troubled and illiquid assets, and the benefits of such a program
Prepared testimony of
Alan Blinder, economics professor at Princeton University, on purposes of TARP,
the implementing language used to describe TARP, the need for more balanced
allocations than have taken place so far, problems with TARP, the need for more
oversight, the insufficient fulfillment of TARP's purposes with the current use
of funds, and a suggestion for Congress to block the final tranche absent a
change
Prepared testimony of
Martin Feldstein, economics professor at Harvard University, on current
economic threats, TARP, and a suggested policy shift, as well as an appended
article and an editorial by the witness
·
Senate Committee on Banks, Housing, and Urban
Affairs Hearing on Financial Institution Use of TARP Funding – Nov. 13,
2008
Video of the entire
hearing including Chairman Dodd and Senator Johnson's opening statements,
testimony, and questioning by members of the committee
Prepared testimony of
Anne Finucane, Global Marketing and Corporate Affairs Executive for Bank of
America, on Bank of America's 2008 performance, the Treasury Department's
investment in Bank of America, and the effect of this investment on the bank's
lending and compensation practices
Prepared testimony of
Barry Zubrow, Executive Vice President and Chief Risk Officer at JPMorgan
Chase, on his institution's capital position at the time of the government's
investment, the use of the additional capital provided by the government
including mortgage loan modifications and extended lending, and expected
executive compensation for 2008
Prepared testimony of
Jon Campbell, Executive Vice President of Wells Fargo Regional Banking, on
Wells Fargo's position during the crisis, plans for increased lending, new
foreclosure relief programs, and executive compensation policy
Prepared testimony of
Gregory Palm, Executive Vice President and General Counsel for the Goldman
Sachs Group, on Goldman Sachs' activities, planned use of TARP funds,
compensation policy, and Goldman Sachs' involvement in the mortgage market
Prepared testimony of
Martin Eakes, CEO of Self-Help and the Center for Responsible Lending, on the
need to focus on foreclosure prevention, the stabilization of markets following
capital injection, continued foreclosures and difficulties in making
modifications, the need to use TARP to deal with excessive foreclosures, the
need for more legislative action to facilitate loan modifications, and the need
to lift the ban on judicial loan modification
Prepared testimony of
Nancy Zirkin, Executive Vice President of the Leadership Conference on Civil
Rights, on the significance of the foreclosure problem, the need to pass the
Helping Families Save Their Homes in Bankruptcy Act of 2007, the FDIC mortgage
loan guarantee program, and the role of fair housing laws in loan modification
efforts
Prepared testimony of
Susan Wachter, finance professor at the University of Pennsylvania, on the
mortgage bubble and housing price overcorrection under market forces
·
House Oversight Committee Hearing on Hedge
Funds – Nov. 13, 2008
Preliminary
Hearing Transcript
Full transcript of the
hearing including Chairman Waxman's opening remarks, testimony from academics
and hedge fund executives, and questioning by members of the committee
Prepared testimony of
David Ruder, former SEC chairman, on the characteristics of hedge funds, the
causes of the credit crisis and the hedge funds' role, current SEC regulation
of hedge funds, and recommendations for increased regulation
Prepared testimony of
Andrew Lo, Director of the MIT Laboratory for Financial Engineering, on means
of measuring systemic risk, the relationship between hedge funds and systemic
risk, causes of the credit crisis and the involvement of systemic risk,
recommendations for regulatory reform, a proposed "Capital Markets Safety
Board," transparency and fair value accounting, and the role of technology
and education in the crisis
Prepared testimony of
Joseph Bankman, professor of law and business at Stanford University, on hedge
funds, how the interest on hedge fund profits or "carry" is taxed,
the fairness and efficiency of the current capital gains treatment of carry,
tax deferrals for hedge fund managers, and the need to pass a bill like the
dead Alternative Minimum Tax Relief Act of 2008 to eliminate favorable tax
treatment of carry
Prepared testimony of
Houman Shadab, Senior Research Fellow at George Mason University, on the nature
of hedge funds, the differences between hedge funds and mutual funds, the
regulation of hedge funds, public information available on hedge funds, the
relationship between hedge funds and the credit crisis, the involvement of hedge
funds in the credit default swap market, hedge funds' engagement in
short-selling, and the extent to which hedge funds pose systemic risk
Prepared testimony of
John Paulson, President of Paulson & Co., on his firm's principles,
regulation, growth of the hedge fund market and his firm, and its reactions to
the credit crisis, as well as an appendix of supporting charts, a press
release, a newspaper article, and Paulson's own plan for financial recovery
Prepared testimony of
George Soros, Chairman of Soros Fund Management, on the events of the crisis,
the need for a new market theory to explain it, the characteristics of asset
bubbles, the differences between the current crisis and previous ones, and the
role of hedge funds
Prepared testimony of
James Simons, Chairman and CEO of Renaissance Technologies, on the causes of
the crisis, the history of Renaissance, systemic risk of hedge funds,
regulation, transparency, the compensation structure and special tax treatment,
and the possibility of a new rating organization
Prepared testimony of
Philip Falcone, Senior Managing Director of Harbinger Capital Partners Funds,
on Harbinger's philosophy, its compensation model, hedge funds' positive role
in the economy, transparency, and the possibility of a public exchange for
trading of derivatives like credit default swaps
Prepared testimony of
Kenneth Griffin, CEO of Citadel Investment Group, on Citadel's growth and role
in the economy, the importance of risk management, the need for a clearinghouse
for derivatives trading, and the need for regulation
·
House Financial Services Committee Hearing on
Private Sector Cooperation with Mortgage Modifications – Nov. 12, 2008
Video of the entire
hearing
Benjamin
Allensworth Testimony
Prepared testimony of
Benjamin Allensworth, Senior Legal Counsel for Managed Funds Association, on
the housing crisis's effect on markets, MFA's commitment to working with
Congress on solutions to the crisis, legislation already passed relating to the
housing market and financial reform, the importance of loan modifications,
considerations and challenges for servicers in making modifications, and
measures to increase options
Prepared testimony of
Thomas Deutsch, Deputy Executive Director of the American Securitization Forum,
on challenges to loan modification, existing and future loan modification
initiatives, alternatives to loan modifications, and the availability of
mortgage and consumer credit
Prepared testimony of
Michael Gross, Managing Director of Loan Administration/Loss Mitigation for
Bank of America, on Bank of America's progress in incorporating Countrywide
into its organization and in making new mortgage loans, the National
Homeownership Retention Program, support for the Hope for Homeowners program,
foreclosure prevention and loss mitigation efforts, partnership with counseling
and community organizations, the importance of communication and education in
preventing foreclosures, and challenges to loan modification
Prepared testimony of
Molly Sheehan, Senior Vice President of Chase Home Lending, on Chase's
expansion of foreclosure prevention initiatives, rate modification offers for
customers with adjustable rate mortgages, and expansion of the pay-option ARM
program
·
House Oversight Committee Hearing on the Role
of the Regulators – Oct. 23, 2008
Preliminary
Hearing Transcript
Full transcript of the
hearing including Chairman Waxman's opening remarks, testimony of Alan Greenspan,
Christopher Cox, and John Snow, and questioning by members of the committee
Prepared testimony of
Alan Greenspan, former Chairman of the Federal Reserve, on the sources of the
crisis, possible solutions, and future prospects
Prepared testimony of
John Snow, former Treasury Secretary, on the sources of the crisis, the
Treasury Department's actions from February 2003-June 2006, and suggestions for
the future
Prepared testimony of
Christopher Cox, SEC Chairman, on the SEC's role in regulation, the sources of
the crisis, lessons for future regulation, and presently applicable solutions
to the crisis
·
Senate Committee on Banks, Housing, and Urban
Affairs Hearing on Recent Regulatory Responses to the Crisis – Oct. 23,
2008
Video of the entire
hearing including Chairman Dodd's opening statement, testimony, and questioning
by members of the committee
Prepared testimony of
Sheila Bair, FDIC Chairman, on the FDIC's actions to improve investor confidence
and its efforts to reduce unnecessary foreclosures
Prepared testimony of
Neel Kashkari, Interim Assistant Secretary for Financial Stability and
Assistant Secretary for International Affairs at the U.S. Department of
Treasury, on Treasury's implementation of the Emergency Economic Stabilization
Act of 2008 as well as recruitment and procurement associated with the new TARP
program
Prepared testimony of
James Lockhart, Director of the Federal Housing Finance Agency, on the work of
the new agency, the conservatorship of Fannie Mae and Freddie Mac, Federal Home
Loan Bank oversight, the importance of affordable housing goals and mission
enforcement, the support of Treasury and others, and the agency's role in the
new TARP program
Prepared testimony of
Elizabeth Duke, a Federal Reserve Governor, on the importance of TARP and
measures taken by the Federal Reserve, including efforts to avoid further
foreclosures and to stabilize markets
Prepared testimony of
Brian Montgomery, HUD Assistant Secretary for Housing and Federal Housing
Commissioner, on loss mitigation efforts, work with housing counseling
agencies, new programs under the Housing and Economic Recovery Act, and the
importance of TARP
·
House Oversight Committee Hearing on the Role
of the Credit Rating Agencies – Oct. 22, 2008
Preliminary
Hearing Transcript
Full transcript of the
hearing including Chairman Waxman's opening remarks, testimony of former and
current credit rating agency executives, and questioning by members of the
committee
Prepared testimony of
Jerome Fons, former executive with Moody's Investors Service and specialist on
measurement and pricing of credit risk, on the mistakes of the rating agencies,
the reasons for reliance on the agencies, the reasons for low standards and
failure of agencies to see the problem early, and the ways to avoid the problem
in the future
Prepared testimony of
Frank Raiter, former executive with Standard & Poor's, on the role of
rating agencies in the mortgage market, models used by S&P, reasons why the
model was not updated, and other problematic aspects of agency procedures
Prepared testimony of
Sean Egan, managing director of Egan-Jones, on the structure of the credit
rating industry, the history of major credit rating agency failures, the
superiority of the Egan-Jones model to the model of the Big Three rating
agencies, misconceptions about the problem, inadequacy of reform proposals,
suggested alternatives, and the need for legislation addressing the problem
Prepared testimony of
Stephen Joynt, President and CEO of Fitch Ratings, on the origins of the
financial crisis, the reasons for rating failure, Fitch's current function in
the market, and future goals
Prepared testimony of
Raymond McDaniel, Chairman and CEO of Moody's Corporation, on the role of the
rating agencies in financial markets including Moody's specific procedures and
rating model, the housing market and Moody's ratings of Residential Mortgage
Backed Securities, and Moody's efforts to restore confidence
Prepared testimony of
Deven Sharma, President of Standard & Poor's, on S&P's principles and
historical performance, S&P's efforts to improve the rating process and
increase confidence, SEC regulation and the content of e-mails in an SEC report
attributable to S&P, the rating model S&P uses, and the prohibitions on
structuring and consulting at S&P
·
House Financial Services Committee Hearing on
the Future of Financial Services Regulation – Oct. 21, 2008
Video of the entire
hearing
Prepared testimony of
Alice Rivlin, Senior Fellow and Director of the Greater Washington Research
Project with the Brookings Institution, on the multiple causes of the crisis,
the need to fill regulatory gaps such as new types of mortgages and complex
derivatives, the danger of perverse incentives for mortgage brokers and ratings
agencies, the problem of conflicting objectives for the GSEs and the Federal
Reserve, and the reasons for avoiding an organization-chart-based approach to
modifying the regulatory structure in favor of strengthening existing agencies
Prepared testimony of
Joseph Stigliz, professor at Columbia University, on market and regulatory
principles, the need for greater regulation, proposed elements for a new
regulatory structure, and the need for better regulatory institutions
Prepared testimony of
Joel Seligman, President of the University of Rochester, on the relative speed
of regulatory reform compared to the rate of change in finance as a whole, the
need for restructuring that goes beyond emergency regulatory action, the
advisability of creating special Congressional committees to review regulatory
reform options, the need for comprehensive review of the regulatory system, and
the balance between a single-agency and a multiple-agency approach
Prepared testimony of
Manuel Johnson, of JohnsonSmick International, on the state of financial
regulation, structural and behavioral flaws in the financial system, and
improvements made in recent years
Prepared testimony of
Steve Bartlett, President and CEO of the Financial Services Roundtable, on the
importance of the Emergency Economic Stabilization Act and the measures being
taken under that act beyond the immediate bailout of financial institutions,
the current "tipping point" in financial regulation, the failed
response of the current system to changes in mortgage financing that led to the
current crisis, and reform recommendations, as well as an attached document on
the recommended reforms
Prepared testimony of
Edward Yingling, President and CEO of the American Bankers Association, on the
strong regulatory model for the banking system, the move to regulate other
sectors like the banks, the lack of culpability of the banks in the financial
crisis and the fear that regulation will unnecessarily target banks, the
incompatibility of mark-to-market accounting with the banking model, the need
to regulate similar activities similarly, the need for the regulatory structure
to address systemic risk, and the need for stronger oversight of accounting and
new rules on short-selling, as well as an appendix tracking the origins of the
current regulatory system
Prepared testimony of
Timothy Ryan, Jr., President and CEO of the Securities Industry and Financial
Markets Association, on the global nature of markets, the most important
elements of a regulatory regime, the need for a financial markets stability
regulator, other steps Congress can take to make regulation more efficient and
effective, the importance of international cooperation, the need to regulate structured
products and derivatives effectively, and the need for adequate regulatory
resources
Prepared testimony of
Mike Washburn, President and CEO of Red Mountain Bank, on behalf of Independent
Community Bankers of America, on the strength of community banking and the lack
of culpability of community bankers in the current crisis, the need to address
concentration of the financial system and the problem with the too-big-to-fail
policy, the importance of emergency measures, the effectiveness of the bank
regulatory structure, positive elements of the current regulatory structure,
and the need to close regulatory gaps and create a tiered regulatory system
·
House Budget Committee Hearing on Options for
Economic Recovery Legislation – Oct. 20, 2008
Video of the entire
hearing
Prepared testimony of
Ben Bernanke, Chairman of the Federal Reserve, on the causes and spread of the
crisis, actions of the Federal Reserve and Treasury, mechanisms provided by the
bailout plan, the economic outlook, and recommended principles for Congress to
consider in enacting a fiscal package
Prepared testimony of
Martin Baily, Senior Fellow at the Brookings Institution and former Chairman of
the Council of Economic Advisers, on the economic outlook, difficulties for
homeowners, unemployment, positive developments regarding exports and falling commodity
prices, the need for a new fiscal package of $150 to $300 billion and its
likely effect on the economy, recommended elements of the package, and the
dangers posed by the deficit and inflation
Prepared testimony of
Iris Lav, Deputy Director of the Center on Budget and Policy Priorities, on
state deficits, the effect of state deficits on the national economy, states'
options for balancing the budget, the need to provide $50 billion in temporary
fiscal relief for states, current state fiscal conditions, the effect of state
budget cuts, suggested means of enacting state fiscal relief, and the need to
enact it before states make further budget cuts
Prepared testimony of
William Beach, Director of the Center for Data Analysis at the Heritage
Foundation, on the uniqueness of the present economic situation in historical
perspective, the dangers of increasing taxes or regulation or showing
withdrawal from the international economy, the need to set broad pro-growth
policy in the areas of tax policy, energy policy, and long-term spending, the
importance of allowing the Federal Reserve to set short-term policy, the need
for Congress to target investment risk, and specific policy recommendations to
achieve this target
·
Senate Committee on Banks, Housing, and Urban
Affairs Hearing on the Genesis of the Current Economic Crisis – Oct. 16,
2008
Video of the entire
hearing including Chairman Dodd's opening statement, testimony, and questioning
by members of the committee
Prepared testimony of
Arthur Levitt, Jr., Senior Advisor with the Carlyle Group, on the problems of a
deregulatory approach, the lack of transparency, oversight, and enforcement on
the part of the SEC, and the need to restore trust through rejuvenation of the
SEC
Prepared testimony of
Eugene Ludwig, CEO of Promontory Financial Group, on outdated regulatory
structures and response mechanisms, the dangers of consumerism and modern
finance lulling us into a false sense of security, deterioration in market
conduct, lack of regulation, late response to the crisis, and a suggested
regulatory framework for the future
Prepared testimony of
Jim Rokakis, Treasurer of Cuyahoga County, Ohio, on the harm of foreclosures to
communities, the failure of the Fed to act and the failure of a U.S. attorney
to prosecute anyone in response to predatory practices in Ohio, and the lack of
a relationship between the Community Reinvestment Act of 1977 (CRA) and the
crisis
Prepared testimony of
Marc Morial, President and CEO of the National Urban League, on the dangers of
blaming minority borrowers for the housing crisis and the importance of the CRA
Prepared testimony of
Eric Stein, Senior Vice President of the Center for Responsible Lending, on the
causes and solutions of the financial crisis
·
House Oversight Committee Hearing on the AIG
Bailout – Oct. 7, 2008
Preliminary
Hearing Transcript
Full transcript of the
hearing including Chairman Waxman's opening remarks, testimony of the
superintendent of the New York State Insurance Department, the former chief
accountant of the SEC, and former AIG executives, and questioning by members of
the committee
Prepared testimony of
Eric Dinallo, superintendent of the New York State Insurance Department, on the
Department's role in what happened at AIG, the proposal announced by the
Governor of New York on September 15 and the misconceptions surrounding it, the
necessity of the bailout, and the need to regulate the credit default swap
market
Prepared testimony of
Lynn Turner, former chief accountant of the SEC, on the elements that are to
blame for the financial crisis, lack of transparency at AIG, the integrity of
AIG's management and corporate board, the role of lax regulation, and the role
of mark to market accounting
Prepared testimony of Robert Willumstad, former CEO of AIG, on events at AIG from June 2008 including the development of a strategic plan to address the crisis, his own immediate efforts to contain the effects of the cris