Former Fed Adviser, Activists Lay Out a Plan for Change at the Fed
Former Fed Adviser, Activists Lay Out a Plan for Change at the Fed
A former Federal Reserve adviser is joining with an activist group to argue for overhauls at the central bank that they say would distance it from Wall Street and make its activities more...
A former Federal Reserve adviser is joining with an activist group to argue for overhauls at the central bank that they say would distance it from Wall Street and make its activities more transparent and accountable to the public.
Dartmouth College economics professor Andrew Levin—special adviser to Ben Bernanke and Janet Yellen between 2010 and 2012 when they were Fed chairman and vice chairwoman—is pressing for the overhaul with Fed Up coalition activists.
Dartmouth College economics professor Andrew Levin, special adviser to then Fed Chairman Ben Bernanke between 2010 to 2012, is pressing for the overhaul with Fed Up coalition activists. Many of the proposed changes target the 12 regional Federal Reserve Banks, which are quasi-private and technically owned by commercial banks in their respective districts.
“A lot of people would be stunned to know” the extent to which the Federal Reserve is privately owned, Mr. Levin said. The Fed “should be a fully public institution just like every other central bank” in the developed world, he said in a conference call announcing the plan. He described his proposals as “sensible, pragmatic and nonpartisan.”
The former central bank staffer said he sees his ideas as designed to maintain the virtues the central bank already brings to the table. They aren’t targeted at changing how policy is conducted today. “What’s important here is that reform to the Federal Reserve can last for 100 years, not just the near term,” he said.
That said, what is being sought by Mr. Levin and the activists is significant and would require congressional action. Ady Barkan, who leads the Fed Up campaign, said the Fed’s current structure “is an embarrassment to America” and Fed leaders haven’t been “willing or able” to make changes.
A Federal Reserve spokesman declined to address the proposal.
Mr. Levin wants the 12 regional Fed banks to be brought fully into the government. He also wants the process of selecting new bank presidents—they are key regulators and contributors in setting interest-rate policy—opened up more fully to public input, as well as term limits for Fed officials.
Mr. Levin’s proposal was made in conjunction with the Center for Popular Democracy’s Fed Up coalition, a group that has been pressuring the central bank for more accountability for some time. The left-leaning group has been critical of the structure of the regional banks, and has been pressing the Fed to hold off on raising rates in a bid to make sure the recovery is enjoyed not just by the wealthy, in their view.
The proposal was revealed on a conference call that also included a representative from Bernie Sanders’s presidential campaign, although all campaigns were invited to participate.
Mr. Levin says the members of the regional Fed bank boards of directors, the majority of whom are selected by the private banks with the approval of the Washington-based governors, should be chosen differently. The professor says director slots now reserved for financial professionals regulated by the Fed should be eliminated, and that directors who oversee and advise the regional banks should be selected in a public process involving the Washington governors and local elected officials. These directors also should better represent the diversity of the U.S.
Mr. Levin also wants formal public input into the selection of new bank presidents, with candidates’ names known publicly and a process that allows for public comment in a way that doesn’t now exist. The professor also wants all Fed officials to serve for single seven-year terms, which would give them the needed distance from the political process while eliminating situations where some policy makers stay at the bank for decades. Alan Greenspan, for example, was Fed chairman from 1987 to 2006.
With multiple vacancies in recent years, the selection of regional bank presidents has become a hot-button issue. Currently, the leaders of the New York, Philadelphia, Dallas and Minneapolis Fed banks are helmed by men who formerly worked for or had close connections to investment bank Goldman Sachs.
Mr. Levin called for watchdog agency the Government Accountability Office to annually review and report on Fed operations, including the regional Fed banks. He also wants the regional Fed banks to be covered under the Freedom of Information Act. A regular annual review hopefully would insulate the effort from perceptions of political interference, Mr. Levin said.
By Michael S. Derby
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Proposed Legislation Could Grant State Citizenship to Undocumented Immigrants
SILive.com - June 16, 2014, by Ryan Lavis - With the legislative session in Albany scheduled to end this week, one New York lawmaker is pushing legislation that would grant sweeping rights of...
SILive.com - June 16, 2014, by Ryan Lavis - With the legislative session in Albany scheduled to end this week, one New York lawmaker is pushing legislation that would grant sweeping rights of citizenship to millions of illegal immigrants and non-citizens, including the right to vote and access to healthcare.
The New York Is Home Act, sponsored by Bronx state Senator Gustavo Rivera, would provide benefits to non-citizens who meet certain criteria.
Requirements include proof of residence in New York state for at least 3 years, pledges to abide by New York laws and uphold the state constitution, as well as a willingness to serve on New York juries. Additionally, non-citizens would also have had to pay state taxes for at least 3 years.
After meeting these criteria, non-citizens would receive a form of state citizenship that includes the right to vote in all state and local elections and hold certain public offices. Additionally, they would have access to college financial aid and health insurance programs, and the ability to apply for drivers and professional licenses, according to a summary of the bill.
Staten Island Assemblywoman Nicole Malliotakis (R-East Shore/Brooklyn) opposed the bill.
"Extending the privilege of voting to those in our country illegally devalues United States citizenship and further erodes the incentive to enter the country through safe and proper channels," Ms. Malliotakis said in a statement. "While some of us are fighting to protect taxpaying citizens, others are looking to give rights and benefits to non-citizens. It is a shame that during these last days of session, this is the priority of some legislators."
State Sen. Diane Savino (D-North Shore/Brooklyn) questioned the logistics of the bill, and noted the responsibility of such immigration reform should ultimately fall on Congress.
"These are issues that rightfully belong to the federal government, and we need a Congress more willing to develop comprehensive solutions to citizenship," Sen. Savino said.
According to the bill, this legislation would not interfere with the federal government's authority to regulate immigration.
The bills sponsor told the Daily News that he does not expect his legislation to pass anytime soon.
"Obviously this is not something that's going to pass immediately, but nothing as broad as this or as bold as this passes immediately," Sen. Gustavo Rivera (D-Bronx), told the Daily News.
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Letter: Gorsuch wrong for Supreme Court
Letter: Gorsuch wrong for Supreme Court
As a faith leader deeply involved in the lives of working people, I understand the impact that the nation’s highest court can have on our daily lives. We need a Supreme Court Justice committed to...
As a faith leader deeply involved in the lives of working people, I understand the impact that the nation’s highest court can have on our daily lives. We need a Supreme Court Justice committed to protecting the rights of all people. The more I learn about Neil Gorsuch, confirmed by the Senate on Friday, the more convinced I am that he is not that justice...
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Latinos Have The Highest Mortality Rate In Accidents Of The New York Construction Industry
Latinos Post - February 26, 2014, by Jorge Calvillo - The Hispanic and immigrant population employed in the construction industry in the state of New York is the ethnic group most vulnerable to...
Latinos Post - February 26, 2014, by Jorge Calvillo - The Hispanic and immigrant population employed in the construction industry in the state of New York is the ethnic group most vulnerable to fatal accidents in the workplace, according to a report by the Center for Popular Democracy.
According to El Diario NY, the data collected by the study shows that between 2003 and 2011, within the total amount of deaths by falls and accidents in construction areas registered in New York City, 60 percent of the deceased were Hispanic and/or immigrants.
This is an alarming figure because 75 construction workers die due to accidents per year in the state of New York, revealed journalist Blanca Rosa Vílchez, for news network Univisión.
The source points out that in New York, 41 percent of construction workers are Hispanic. However, the report released on Thursday showed that 74 percent of the deaths by accidents belong to that same ethnic group.
Last September 24, construction workers in Brooklyn protested to demand better safety conditions in their workplaces, after they reported a significant rise in accidents related to the low investment in safety that companies offer, which has caused severe accidents which in many cases have taken the lives of workers, who receive a minimum salary.
Back then, El Diario NY reported that the workers protested at 227 Carlton Avenue in Fort Greene, where a 62-year-old worker lost his life when the roof of one of the buildings he was working on collapsed onto him on September 10.
According to the protestors, contractor companies in New York buy low-quality materials to save some money and don't invest in safety courses for their workers, which leaves construction workers in a perilous situation.
The Latino community working in the construction industry is double vulnerable in this situation, since many of the workers are undocumented immigrants, and if they suffer an accident, they don't report the construction company for fear of being deported or fired.
As if this were not enough, if violations of safety norms are reported, the fines against construction companies are very low, which makes it easy for them to continue ignoring safety norms in construction sites.
Univisión highlights that the fines construction companies face are no higher than $2,000 in case of an accident, and $12,000 if a worker dies, a figure that reflects the dimensions of the risks that construction workers must face every day.
Source
Arrests Made At Protest Outside UES Home Of JPMorgan Chase Exec
Arrests Made At Protest Outside UES Home Of JPMorgan Chase Exec
Hundreds of people picketed outside of 1185 Park Ave. around 8 a.m. to deliver more than 100,000 petition signatures demanding that JPMorgan Chase stop financing immigrant detention centers and...
Hundreds of people picketed outside of 1185 Park Ave. around 8 a.m. to deliver more than 100,000 petition signatures demanding that JPMorgan Chase stop financing immigrant detention centers and private prisons, protest organizers said. The demonstration was organized by groups such as Make the Road New York, New York Communities for Change and the Center for Popular Democracy.
Read the full article here.
Debbie Wasserman Schultz’s Challenger Has a Chance
During the presidential primary, Democratic National Committee Chair Debbie Wasserman Schultz has managed the impressive feat of angering virtually every liberal in America. Bernie Sanders ...
During the presidential primary, Democratic National Committee Chair Debbie Wasserman Schultz has managed the impressive feat of angering virtually every liberal in America. Bernie Sanders supporters think she displays a transparent biasfor Hillary Clinton. Party stalwarts, including Clinton fans, criticize the decision tohide primary debates on weekend nights, ceding hours of free media time to Republicans in the formative stages of the election. And in a recent interview with the New York Times Magazine, Wasserman Schultz insulted millennial women for being “complacent” about abortion rights. This is an incomplete list.
In two separate petitions, more than 94,000 people have demanded that Wasserman Schultz resign as DNC chair. But back in her district, in Hollywood, Florida, Timothy Canova has another idea: vote her out of office.
Last Thursday, Canova, a former aide to the late Sen. Paul Tsongas and a professor at Nova Southeastern University’s Shepard Broad College of Law, jumped into the Democratic primary in Florida’s 23rd congressional district. It’s Wasserman Schultz’s first primary challenge ever, and with frustration running high against her, it’s almost certain to draw national attention. But Canova first became interested in challenging Wasserman Schultz not because of her actions as DNC chair, but because of her record.
“This is the most liberal county in all of Florida,” Canova said in an interview, referring to Broward County, where most of Wasserman Schultz’s district resides (a small portion is in northern Miami-Dade County). But she more closely associates with her significant support from corporate donors, Canova argued. He listed several of Wasserman Schultz’s votes, such as blocking the SEC and IRS from disclosing corporate political spending (which was part of last month’s omnibus spending bill),opposing a medical marijuana ballot measure that got 58 percent of the vote in Florida, preventing the Consumer Financial Protection Bureau from regulating discrimination in auto lending and opposing their rules cracking down on payday lending, and supporting “fast track” authority for trade deals like the Trans-Pacific Partnership.
“I think anyone who voted for fast track should be primaried. I believe that ordinary citizens have to step up,” Canova said.
Canova espouses many of the populist themes that attract the left: fighting corporate power, defending organized labor, and reducing income inequality. But this is not just a Bernie Sanders Democrat. You have to go back further. Tim Canova is a Marriner Eccles Democrat.
Eccles chaired the Federal Reserve during Franklin Roosevelt’s presidency. And Canova believes the central bank should revisit Eccles’s unorthodox strategies to jump-start a broad-based economic recovery. “In the 1930s, the regional Fed banks made loans directly to the people,” Canova said. “Instead of purchasing $4 trillion in Treasuries and mortgage-backed securities, [the Fed] could buy short-term municipal bonds and drive the yield to zero for state and local governments. They could push money into infrastructure, making loans to state infrastructure banks.” Canova has even suggested that the government create currency outside of the central bank, breaking their monopoly on the money supply, as President Abraham Lincoln did with the “Greenback” in the 1860s.
During World War II, FDR directed Eccles’s Fed to finance American war debt at low rates, eventually producing a stimulus that helped to end the Great Depression. It was a time when the Fed was far more accountable to democratically elected institutions, one that Canova looks back upon fondly. “People like to talk about the Fed’s independence, that’s really a cover for the Fed’s capture,” he said. “They look out for elite groups in society, and the hell with everybody else.”
A growing faction of progressives are beginning to return to their roots, asking whether Fed policies truly support the public interest. The Fed Up campaign, with which Canova has consulted, seeks to pressure the Fed to adopt pro-worker policies. A surprise movement in Congress just cut a 100 year-old subsidy the Fed handed out to banks by $7 billion. Even mainstream figures like economist Larry Summerswonder whether the Fed’s hybrid public/private structure, which critics believe makes it beholden to financial interests, makes sense.
Progressive debates on central banking are not as advanced here as in Europe, where British Labour Party leader Jeremy Corbyn wants a “quantitative easing for people,” where the central bank injects money directly into the economy rather than filtering it through financial institutions. But Canova, who says his views were most influenced by an undergraduate economics professor who taught with one book—John Maynard Keynes’s General Theory of Employment, Interest and Money—bridges this gap. Twenty years ago this week, he wrote an op-ed for the New York Timesopposing the reappointment of Alan Greenspan as Fed chair because of his support for high real interest rates. If elected this fall, he would instantly become the strongest advocate in Congress for a people’s Fed.
While Debbie Wasserman Schultz has few known views on the Federal Reserve, Canova’s populism offers a strong counterweight to her corporate-tinged philosophy. And even before that contrast plays out, the hunger for any challenge to Wasserman Schultz is palpable.
“The money is coming in more rapidly than believable,” said Howie Klein, co-founder of Blue America PAC, which raises money for progressive Democrats. Wasserman Schultz has been on Klein’s radar since she, as chair of the “Red to Blue” campaign for electing House Democrats, refused to campaign against three Republicans in Florida because of prior friendships and their joint support for the state sugar industry.
Klein sent a Blue America fundraising email shortly after Canova’s announcement, and raised $7,000 within 12 hours, and over $10,000 at last count. The intensity of support reached beyond the PAC’s traditional donor base. “Our average donation is $45, but in this case we’re getting $3, $5,” Klein said. “For people who our donors have never heard of, it can take three-four months to do that. It’s just because ofDebbie Wasserman Schultz.”
Similarly, Canova says he’s seeing tens of thousands of visits to his website andFacebook page, suggesting support beyond south Florida. However, he wants to localize rather than nationalize the race. The district, initially drawn with Wasserman Schultz’s input when she served in the Florida state Senate, is now more Hispanic and less reliable for a politician who Canova believes has lost touch with her constituents.
“You talk to people at the Broward County Democratic clubs, they say she takes us for granted,” Canova said. The political model for his campaign is David Brat, another academic who took on a party leader—then-House Majority Leader Eric Cantor—and defeated him, on the grounds that Cantor ignored his district amid constant corporate fundraising.
If there’s one thing Wasserman Schultz can do, it’s raise money—that’s why she chairs the party. She will have a big cash advantage and the power of incumbency. But Canova thinks he can outmatch her by riding the populist tide. “There’s a tendency to get so down about the system, but this is an interesting moment we’re living in,” Canova said. “This is a grassroots movement. We’re tapping in without even trying yet.”
Source: The New Republic
As Atlanta Fed President Retires, Some Call For Diversity
As Atlanta Fed President Retires, Some Call For Diversity
The Federal Reserve has received a lot of criticism recently for its lack of diversity. The leaders of the central banking system are almost all white men.
But now that the president of one...
The Federal Reserve has received a lot of criticism recently for its lack of diversity. The leaders of the central banking system are almost all white men.
But now that the president of one of the Fed’s 12 regional banks in Atlanta is stepping down, some see an opportunity for change.
Several congressional lawmakers and the activist group Fed Up are calling on the agency to appoint the system’s first black president at the Federal Reserve Bank of Atlanta.
“The fed is the nerve center of our entire economic system, and nobody is suffering from an economic depression as the African-American community,” Congressman David Scott said.
The Georgia Democrat co-wrote a letter, along with Reps. John Lewis, Maxine Waters and John Conyers, to Federal Reserve Chair Janet Yellen on the issue.
Black workers still struggle, Scott said, even as the overall economy has recovered. The jobless rate for African Americans, for example, is more than double their white neighbors.
Outside an unemployment office on the west side of Atlanta, Formosa Williams is at her wit’s end.
“At this point, I don’t know what to do,” Williams said.
For years, Williams said she has struggled to find stable work.
“The only jobs that really seem to be hiring are like fast food,” Williams said. “And it’s no way I’m going to go back to that.”
Scott and the activists hope stories of minority workers, like Williams, will take a more prominent place in the central banking system’s discussions once it has a black regional president.
“Unless you have a voice at that table that has gone through the experience of being an African American, you’re missing so much,” said Scott.
The congressman and activists argue the appointment also makes sense, given the region the bank covers -- the South -- and that region’s history with civil rights.
But while many economists might agree that diversity is good, they aren’t all sure how it translates into policy.
“I think you have to start out with the recognition that our Federal Reserve officials have really one tool, and that’s interest rates,” said Tim Duy, an economics professor at the University of Oregon. “That tool is a very blunt instrument.”
That tool affects the broader economy at a macro-level, said Duy, who also authors a blog called Fed Watch. Meanwhile, he said, many of the problems facing African-American workers are at the micro-economic level.
“The Federal Reserve is not going to be a silver bullet to these issues,” Duy said.
The search for the next Atlanta Fed president is being led by a committee of business leaders from around the South.
The chair, Thomas Fanning, who is president of Southern Company, said they’re looking for the best person most of all.
And if he or she happens to make history, as the first African American?
“That would be a great thing,” Fanning said.
By STEPHANNIE STOKES
Source
Will last-minute work soon be history?
When Russell Miller worked at Abercrombie, one of his days each week had to be an on-call day. He wouldn’t know if he’d have to show up to work until an hour in advance.
...
When Russell Miller worked at Abercrombie, one of his days each week had to be an on-call day. He wouldn’t know if he’d have to show up to work until an hour in advance.
“You had to block out that time period as if you were working,” he says. One store he worked at was 45 minutes from his house. “We had to be ready to be there on time. With all the regulations about what we wear, how we look and how we present ourselves, I had to get fully ready for my shift and ready to walk out the door at the time I made the phone call to find out if they were even going to need me or not.”
For Miller, this was more than an inconvenience.
“Having a second job wouldn’t work at a time when I was scheduled for an on-call shift. If they scheduled me for an on-call shift and they didn’t call me, that was real money lost and real time opportunity lost.”
On-call scheduling “means you have to put your life on hold,” says Rachel Laforest, director of the Retail Action Project, a division of the Retail Wholesale and Department Stores Union. “It becomes very difficult to lead full lives, so for example, if I’m a parent and I have to figure out arranging for child care, it’s impossible for me to do that” with such short notice, she says.
There isn’t good national data on the prevalence of on-call scheduling, but regional surveys suggest it’s widespread and not limited to retail, says Stephanie Luce, professor of labor studies at CUNY. “We see it in fast food, airlines, beauty services, domestic services, child care services," she says. "Smaller studies seem to suggest this practice really picked up after the recession, however, over the past couple of years, there’s been a real push back.”
After New York’s attorney general suggested Abercrombie and 12 other companies were potentially violating New York law through the practice, Abercrombie announced it would work to discontinue the practice.
The company responded on August fifth “...we understand – and share – the attorney general’s concerns about call-in shift scheduling. The attorney general’s letter helped focus our ongoing internal discussions about how to create a stable and predictable work environment as possible for our employees.”
Gap Inc. told Marketplace: “Each of our brands have made a commitment to evaluate their practices and determine where we may be able to improve scheduling stability for our employees, while continuing to drive productivity in stores.”
Gap also says it’s working on a pilot project with University of California, Hastings College of the Law “to examine workplace scheduling and productivity. Led by recognized expert professor Joan Williams, the goal of the Gap Hourly Scheduling Initiative is to use research and data to create solutions that will be sustainable and can be implemented across our company’s entire footprint and fleet."
Under pressure from a lawsuit, Victoria’s Secret discontinued on-call scheduling earlier this year.
To the extent firms are reconsidering the practice, the reasons are both technological and monetary.
On-call scheduling resulted from pressure to restrict the ratio of hours to sales and an attempt to more nimbly adapt to changes in demand, says University of Chicago associate professor Susan Lambert. It also results in companies “overhiring,” using many part time workers instead of fewer full time workers. But Lambert says “the costs of managing this way do not enter the balance sheets of firms.” Employees who work irregularly, for example, may not always be up to speed with the latest changes to the store or the layout, she says.
“From a very engineering standpoint,...[on-call scheduling] may look efficient but when you look on front lines of firms, you see all the opportunities costs there are in terms of people walking out because they can’t find something or can’t get help.”
Another factor is technology.
“New technologies give us now the ability to predict very well variations in demand,” Lambert says.
Companies don’t need to keep workers on hold; they can figure out pretty well whether they need to have someone show up to work far in advance of two hours before the shift starts, she says. Companies are so good at predicting demand that they tried to "overoptimize" down to the minute, keeping workers on call to cover even slight changes in demand.
“You don’t need to do that micro-management,” she says. “Retailers are learning that."
So it may be, she says, that workers and firms are finding on-call scheduling is a headache for everyone.
Here are the responses from the 13 companies the New York attorney general wrote warnings to:
Ann Inc.: "Staffing guidelines do not include the practice of on-call shifts."
Gap Inc.: "Each of our brands have made a commitment to evaluate their practices and determine where we may be able to improve scheduling stability for our employees, while continuing to drive productivity in stores. As part of our commitment to more sustainable scheduling practices, we are working on a pilot project with Gap Brand and UC Hastings College of Law to examine workplace scheduling and productivity."
J.C. Penney Co: "We do not utilize on-call scheduling, and JCPenney has always maintained a policy against the practice."
Sears Holdings Corp: "Sears Holdings does not use on-call scheduling for store associates. That said, we will fully cooperate with the New York Attorney General’s office’s requests."
Target Corp: "Target does not use on-call scheduling."
TJX Cos: "We don’t use on-call shifts at TJX and it hasn’t been our practice, i.e. nothing new since April."
Williams-Sonoma Inc: "We actually discontinued [on-call scheduling] for the entire country."
Burlington Stores Inc., Crocs Inc., J. Crew Group Inc. and Urban Outfitters Inc. did not return requests for comment.
Source: Marketplace
Housing advocates accuse Wells Fargo of damaging communities through foreclosures
89.3KPCC - March 13, 2013 - Wells Fargo writes the most mortgages in California. According to a ...
89.3KPCC - March 13, 2013 - Wells Fargo writes the most mortgages in California. According to a new report released Tuesday from a consortium of grassroots activists and housing advocates, 11,616 of those loans are currently in foreclosure, out of roughly 65,000 homes in foreclosure in the state.
The report accuses Wells Fargo of damaging both California communities and the state’s overall economy. It was produced by the Alliance of Californians for Community Empowerment, the Center for Popular Democracy, and the Home Defenders League.
Ross Rhodes of the Alliance of Californians for Community Development said on a conference call Tuesday that Wells Fargo was singled out because the bank is "responsible for handling more delinquent loans than any other servicer."
He added that Wells Fargo is failing to live up to the terms of last year's mortgage settlement between the states and the country's biggest banks. Rhodes said that Wells is lagging behind both Bank of America and Chase in efforts to keep people in their homes.
In a statement, Wells Fargo said that its foreclosure rate in California is lower than its rate in the nation as a whole and that the report "appears to be an attempt to question Wells Fargo’s longstanding track record as a fair and responsible lender and servicer."
The bank emerged from the financial crisis relatively unscathed. But in recent years it has been called to task for past lending practices. It was was fined $175 million by the Justice Department in 2012 for steering minorities into costly subprime loans before the housing crisis.
The bank was also fined $148 million by the Securities and Exchange Commission for violations perpetrated by Wachovia Securities (Wells took control of Wachovia in 2008, at the height of crisis, when major U.S. banks were failing).
The report also argues that Wells Fargo’s foreclosures in the state are disproportionately affecting African American and Latino neighborhoods and could wind up costing the state $20 million in lost tax revenue.
The authors say that the solution is “principal reduction” — adjusting mortgages to reflect the reduced market value of homes in foreclosure.
Numerous economists support the idea of principal reduction, but the notion has been resisted at the federal level, most notably by Edward DeMarco, acting director of the Federal Housing Finance Agency, which has overseen mortgage giants Fannie Mae and Freddie Mac since they were taken into receivership during the financial crisis.
DeMarco has supported principal forbearance, a method that would not reduce the amount of mortgages held by Fannie and Freddie but rather restructure them so that homeowners could see more affordable payments.
The report's consortium of advocates doesn't favor forbearance, arguing that it can't address the core issue of borrowers drowing in debt.
But as tempting as principal reduction might be in theory, in practice is doesn't always lead to the homeowner staying in the home.
Economist Stuart Gabriel is Director of the Ziman Center for Real Estate at UCLA. He said that principal reduction isn't a "cure all."
"For borrowers that are deeply underwater, a modest amount of principal reduction is going to make no difference the ultimate outcome, which would be default and foreclosure," Gabriel said.
In its statement, Wells Fargo called its principal reduction efforts since 2009 "aggressive." But the advocacy groups said that Wells Fargo is one of the most difficult banks to work with, and that it engages in "dual tracking" — undertaking loan modifications at the same time it moves forward with the foreclosure process.
The report also recommends that Wells Fargo disclose more data about its foreclosures, and specifically about the impact that foreclosures are having on minority neighborhoods in California.
Gabriel said that more transparency about lending practices and the racial and geographical makeup of loan portfolios is always a good thing because additional information improves markets.
Source
The Business of Change: Consumer Movements Pour on the Pressure
The Business of Change: Consumer Movements Pour on the Pressure
Consumer campaigns have existed for more than a century, but the Trump presidency has galvanized activists and accelerated their work.
...
Consumer campaigns have existed for more than a century, but the Trump presidency has galvanized activists and accelerated their work.
Read the full article here.
6 days ago
6 days ago