Happy Thanksgiving everyone. Hope you are resting off eating too much turkey and dressing, while avoiding the worst shopping lines. Thanks for reading this blog, I’m quite thankful for all the people I’ve gotten a chance to interact with in the past year through comments, links, in person, etc.
I want to make sure this great story didn’t get lost in the Thanksgiving shuffle. Shahien Nasiripour, Huffington Post, Elizabeth Warren Helped Shoot Down Bill That Would Have Sped Foreclosures, Calendar Shows. Nasiripour goes through Warren’s calendar during the period where the controversial H.R. 3808, Interstate Recognition of Notarizations Act of 2010, was awaiting a signature:
For consumer advocates, who have long decried what they portray as Wall Street’s outsized influence in Washington, Warren represents their greatest hope that big banks will be more tightly supervised following the worst financial crisis since the Great Depression..The decisive way in which she labored behind the scenes to stymie a bill that would have eased requirements for documentation in the foreclosure process underscores how her arrival has altered the administration’s relationship with major banks….
State officials across the country–who have been pursuing probes looking into wrongdoing within the foreclosure process– feared that those jurisdictions with lax standards could have become hotbeds for foreclosure documentation fraud. Lenders and mortgage companies could have used those states as central clearing houses to produce bogus foreclosure paperwork, and then export those documents to other states with more stringent regulations–an expedient bypass around the strictures.
Obama ultimately declined to sign the law, and the House of Representatives failed to override the veto.
Officials said Warren was among the first federal officials to recognize the significance of the notary bill, titled the Interstate Recognition of Notarizations Act of 2010. She met with authorities from several states and then relayed their concerns to influential administration officials.
That evening, Warren met for 30 minutes with Peter Rouse, Obama’s interim chief of staff, her calendar shows. She later spent an hour on the phone with Illinois Attorney General Lisa Madigan, who once sued Countrywide Financial and exacted an $8.4 billion multi-state settlement.
The next day, Warren participated in an afternoon meeting on the bill, her calendar shows. During that meeting one of Obama’s top spokesmen, Dan Pfeiffer, posted an entry on the White House Blog explaining why Obama would not sign the bill.
On Oct. 8, Obama declined to sign the bill into law, citing the need for “further deliberations about the possible unintended impact” of the bill on “consumer protections, including those for mortgages.”
Documents released Wednesday show that Warren met or spoke with at least eight state officials leading a 50-state investigation into possibly-fraudulent mortgage documentation practices.
Fantastic. The bill, which Adam Levitin referred to as the The Notary Fraud Condonation Act of 2010, is exactly the kind of formality legislation that could have passed Congress without anyone noticing it. If you look at some of big financial deregulations – Phil Gramm sneaking a 262 page bill, the Commodity Futures Modernization Act, onto an 11,000 page omnibus appropriation bill during the lame duck session in December 2000 – Congress voted for the change without realizing its significance. The only people who do are usually the lobbyists, and they are the only ones that can get a voice in explaining to elites what this stuff does.
But less so now. Warren and her team are in a position to explain the consequences of what the lobbyists are doing, and that’s powerful. This is the fight over Warren and her team. It’s funny to think that people tried to argue that the argument over Warren’s presence in the administration was some nose-bleed argument about how expansive a definition of medical bankruptcy should use for statistical record keeping. The real fight, and everyone understood this at the time, was exactly this, about another person with a powerful voice and expertise close to the administration who could provide a counterpoint to the lobbyists. And ultimately for people. Good for Obama and his team pocket vetoing this once they realized what the game was.
Republicans tried and failed to override the veto. The same people who went on and on about the sanctity of contracts during the lien-stripping/cramdown debate are tripping over each other to get in the front of the line for serving the financial industry. Specifically, shredding and rewriting the procedural rules for presenting evidence to look exactly like what the financial lobby wants them to be, sanctity of contracts and courts be damned. And Republicans did this once they knew the stakes in the middle of a nationwide investigation of extensive fraud in documentation for foreclosure, they tried to override a veto for a Robosigner Bailout Bill. I hope they get pilloried for this.