BLOG VIEW: Since returning to Washington in January as the junior senator from Massachusetts, Elizabeth Warren has resumed her campaign of making high-profile comments that resonate with provocative verbiage. Whether dismissing the sequestration cuts as ‘just plain dumb’ or using a Senate hearing to make Fed Chairman Ben Bernanke squirm or demanding that the credit union mobilize to legitimize Richard Cordray's role as director of the Consumer Financial Protection Bureau (CFPB), Warren is raising her visibility with her trademark tough-talk and in-your-face personality.
Because Warren is a politician who does not seem to be at a loss for opinions and observations, I would like to take this opportunity to pose 10 questions on subjects near and dear to the good senator's heart. If she can take a few minutes from her Capitol Hill media blitz, perhaps she can offer insight on the following queries.
1. In January, a U.S. District Court ruling stated that President Obama violated the constitution with a series of recess appointments that were made while Congress was in so-called pro forma sessions. One of these appointments involved putting Richard Cordray into the director's chair at the CFPB. As a former Harvard law professor, can you please offer legal justification on why Cordray should remain in office when a court ruled that this type of recess appointment was unconstitutional?
2. To date, the U.S. Department of Justice under the direction of U.S. Attorney General Eric Holder has failed to successfully prosecute any of the Wall Street executives who were at the center of the 2008 economic crash. How would you define the competency of Holder and his department in this matter?
3. Since taking office in 2009, the Obama administration has never produced any plan to resolve the conservatorship of the government-sponsored enterprises. Why have you yet to offer any public criticism about this absence of presidential leadership regarding this issue?
4. In 2009, the combined force of Fannie Mae, Freddie Mac and Ginnie Mae controlled 96.7% of the mortgage-backed securities (MBS) issuance, while the private-label sector controlled 3.3%. In 2012, the Fannie-Freddie-Ginnie trio controlled 99.3% of MBS issuance, leaving the private label sector with 0.7%. Do you believe that the administration deserves rebuke for failing to address the continued evaporation of the private-label sector over the past four years?
5. The Federal Housing Finance Agency has been without a director since August 2009. The White House planted a story in the Wall Street Journal last December that it was planning to replace the agency's long-serving acting director, Edward DeMarco, though no appointment has yet to be announced. Do you believe that the administration has acted appropriately in not actively seeking to fill the vacant director's position?
6. At last week's Senate Banking Committee hearing, you asked the Federal Reserve chairman, ‘So when are we going to get rid of too-big-to-fail?’ Have you asked the same question of the Obama administration – and, if so, what answer did you get?
7. Also last week, you addressed a Credit Union National Association conference and urged the attendees to push for the Cordray confirmation. However, the CFPB's new rules and regulations on mortgage lending and servicing apply to credit unions. In your speech, you noted that credit unions were not responsible for the 2008 crash. If credit unions were not responsible for the crash, can you please explain why they should be subject to the new onerous layer of regulatory compliance that is being spread across the financial services industry?
8. Last week, the Overseas Private Investment Corp. (OPIC), the U.S. government's development finance institution, launched a project to develop a mortgage finance program in Haiti – a nation where the majority of the population is either unemployed or underemployed and where thousands of people are still living in tents and makeshift shelters in the three years since the 2010 earthquake. Do you believe that encouraging mortgage debt in a nation racked with mass poverty and deprivation is an intelligent use of federal resources?
9. In your years in the public spotlight, I have yet to identify any speech that you've delivered in which you acknowledged the role of irresponsible borrowers in the rise and fall of the housing bubble. Is there any particular reason why you will not publicly blame borrowers for playing a role in this debacle?
10. You are being hailed by many thought leaders in politics and the media as being the most exciting force in Washington, and there's even talk of your running for president in 2016. All things considered, aren't you glad that President Obama snubbed you for the CFPB post?
If the senator should respond to my questions, I will be glad to share her answers.
– Phil Hall, editor, MortgageOrb
(Please address all comments regarding this opinion column to hallp@mortgageorb.com.)
