Friday, June 17, 2011

New Docs Show Intervention by Controversial Federal Agency in Foreclosure Crisis Negotiation

Many conservatives and even some liberals have complained about Obama’s penchant for appointing “czars” in order to avoid accountability under law. One of his most notorious is the Consumer Czar, Elizabeth Warren, who was recess appointed by Obama to help set up and run the monstrous new Consumer Financial Protection Bureau (CFPB).
We recently uncovered documents indicating the CFPB has been intensely involved in a 50-state settlement discussion underway with the nation’s largest mortgage lenders regarding alleged improper foreclosure procedures. (Anti-business zealots in the Obama administration and state attorney general offices are trying to extract a $20 billion “settlement” from banks to settle paperwork issues related to foreclosures.)
The documents, obtained in response to open records requests with CFPB and the offices of attorneys general from all 50 states, seem to contradict Warren’s statements before Congress suggesting her office merely responded to requests for advice, but did not seek to push its views. (We initiated our investigation into the controversies surrounding Ms. Warren and the CFPB on March 22, 2011.)
During a March 16, 2011, hearing of the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, Ms. Warren downplayed her agency’s involvement in the state settlement negotiations: “We have been asked for advice by the Department of Justice, by the Secretary of the Treasury, and by other federal agencies. And when asked for advice, we have given our advice.”
But this does not come close to telling the full story. Emails obtained by Judicial Watch from several states suggest her agency’s participation was far more intense and aggressive. Warren called emergency meetings by phone and in person with attorneys general nationwide to contribute unsolicited input on the matter. The documents also indicate that Warren’s office insisted on keeping its contact with the state attorneys general secret (which, as I’ve pointed out, is never a good sign).
For example, in a February 25, 2011, email to the Executive Committee of the National Association of Attorneys General (NAAG), Iowa Assistant Attorney General Patrick Madigan wrote: “Elizabeth Warren would like to present the CFPB’s view on loan modifications.” And two weeks earlier, a similar email was distributed to NAAG’s Loss Mitigation Subgroup on Warren’s behalf. In an email on February 15 regarding that meeting, Madigan points out that “The CFPB wanted me to stress the confidential nature of this briefing.”
A March 22, 2011, Freedom of Information Act (FOIA) request to the CFPB for all records of Warren’s communications with each state’s attorney general produced a single heavily-redacted document respecting a February 24 meeting with Illinois Attorney General Lisa Madigan.
Now, this is particularly curious given the fact that state attorneys general nationwide have supplied dozens of documents to Judicial Watch showing contact between their offices and Warren’s, including emails establishing closed-door meetings between Warren and New York Attorney General Eric Schneiderman on February 14 and March 7.
Several states refused to turn over responsive documents in their possession based on confidentiality concerns arising from, as the State of Colorado put it, “the Consumer Financial Protection Bureau’s participation in the ongoing investigation into bank and loan servicers mortgage processes.”
And what is the CFPB? It’s a new federal agency arising out of the laughably-named Dodd-Frank Wall Street Reform and Consumer Act. The “Bureau” will officially gain its authority under the law on July 21, 2011. Many conservatives, including Judicial Watch, are concerned this agency will wield a tremendous amount of power with little oversight.
(By the way, Judicial Watch and other open government advocates were invited to meet with Ms. Warren to discuss transparency and other policy issues on April 16, 2011. I can tell you that was an interesting meeting!)
You can see how CFPB was born in an atmosphere of secrecy and cover-up. Certainly the fact that the CFPB has been unwilling to abide by FOIA law makes it appear the agency has something to hide from the American people. And given Warren’s radical tendencies and the fact that she was not subject to vetting by the U.S. Senate, we need absolute transparency from the CFPB.
Elizabeth Warren, as we’ve alerted you in the past, is an ardent “progressive,” who was named by President Obama as the interim head of the CFPB, a maneuver nakedly designed to avoid the likelihood of her not being confirmed by the U.S. Senate because of her left-of-center views. For example, in a blog she authored on the mortgage lending industry, Warren wrote, “Big corporate interests, led by the consumer finance industry, are devouring families and spitting out the bones.”
Do we really want this radical to head an agency that will give the federal government an unprecedented level of control over the private sector, with no oversight? Certainly not.

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