Congress Gets Busy Investigating Financial Mess, Mortgages
If you were worried that your elected officials were twiddling their thumbs while the nation's housing and financial markets fall apart, you'll be able to rest easy in coming weeks. A review by HW of upcoming Congressional hearings shows that both mortgages and financial woes are sitting front and center, and should provide us with some interesting reporting over the next few weeks. On Wednesday, Henry Waxman (D-CA), chairman of the House Oversight and Government Reform Committee, said that his committee will hold two days of hearings in early October "to examine the regulatory mistakes and financial excesses that led to the bankruptcy filing by Lehman Brothers and the government bailout of AIG." "Lax oversight and reckless investments on Wall Street are causing massive disruption throughout our economy," said Waxman in a statement. "Our hearings will examine what went wrong and who should be held to account." Both Lehman CEO Richard Fuld and former AIG CEOs Robert Willumstad, Martin J. Sullivan, and Maurice R. Greenberg will be invited to testify, Waxman's office told HW. House Financial Services Committee chairman Barney Frank (D-MA), said earlier this week that the committee will hold an oversight hearing on Sept. 25 to "examine the actions ... by the Treasury Department regarding the housing government sponsored enterprises of Fannie Mae and Freddie Mac." Witnesses at the hearing will include Treasury secretary Henry Paulson, Fed chief Ben Bernanke, FHFA director James Lockhart, and housing secretary Brian Montgomery. Over at the Senate, the Banking Committee chaired by Chris Dodd (D-CT) will hold a hearing this Thursday addressing "recent bank failures and the regulators' response." FDIC chairman Sheila Bair, OTS director John Reich, and Comptroller John Dugan are schedule to testify at the hearing. Also Thursday, the banking committee will host an in-depth hearing exploring recent FASB proposals that appear set to change accounting for off-balance sheet entities. See HW coverage of the issue. The same committee will also look at growing turmoil in the U.S. credit markets at a Sept. 23 hearing; it's unknown who has been asked to testify. Dodd also signaled late last week that the Senate banking committee would look to explore what he called "unfair lending practices" by mortgage lenders, in response to a recent release of HDMA data for 2006 to 2007. "At a time when turmoil in the mortgage markets caused by unfair and unsound lending practices is making credit less available to all Americans, minority borrowers are confronted with significant racial and ethnic disparities when trying to purchase a home," he said in a statement. "The Banking Committee will continue to focus on how to address discriminatory lending practices and end these disparities in order to ensure that homeownership is equally available to all Americans." In other words, it may be a lame-duck Congress for this session, at least in terms of new legislation -- there is some talk of a second stimulus package -- but, regardless, it's a session that will certainly be eventful from an industry standpoint.