Ownership & Assets: Media Appearances and Press Releases

"Confronting the Debt Culture" Conference in the Washington Post | "Let's Make It Cool to Save"

Communications — Sun, 11 May 2008 12:45:00 -0400

New America in the News:

A coalition of consumer advocates, public policy groups and academics wants to attack our country's dependence on debt by creating a national campaign much like the one used to curb smoking. . .

The organizations leading this effort include the Institute for American Values, the Institute for Advanced Studies in Culture, the New America Foundation, Public Agenda, Demos, the Consumer Federation of America, and the National Federation of Community Development Credit Unions. . .

The coalition is holding a conference in Washington tomorrow and Tuesday and has issued a report, "For a New Thrift: Confronting the Debt Culture."

There's no major revelation in the 68-page report. It merely lists the many ways debt has taken down so many people.

Foreclosures, which soared to more than 1 million in 2007, are predicted to affect about 2.5 million households this year. Consumer bankruptcy filings are also up significantly.

Of course, there is the mortgage meltdown. And now auto loan and credit card delinquencies are also rising.

But even before the subprime debacle, many people were struggling with debt. The Federal Reserve recently reported that consumer credit increased by $15.3 billion in March, to $2.56 trillion.

"Millions of families today feel the American dream slipping away," the coalition's report says. "They are losing hope of escaping from the cycle of over-indebtedness, holding a good-paying job, or moving up the income ladder."

So who's at fault for all this indebtedness?

Is it the consumers?

"Clearly, human frailty is part of the story," the report says. "Some people get over their heads in debt because of their own profligacy and irresponsible choices."

Are we are a nation of debtors because it's what's best for the overall economy?

To be sure, the ceaseless temptation to overspend is also part of the story, the coalition leaders say. And just blaming or railing against consumers won't fix our debt problem. We've got to look at the financial institutions, or anti-thrifts, as the coalition calls them. . .

"The anti-thrifts have worked relentlessly to reduce the traditional inhibitions and stigma associated with over-indebtedness," the report says. . .

CA Pension Bill in Sacramento Bee | Plan to Open Up CalPERS Reflects Worry About Inadequate Saving for Retirement

Communications — Fri, 25 Apr 2008 11:58:00 -0400

New America in the News:

Sacramento Bee | Plan to Open Up CalPERS Reflects Worry About Inadequate Saving for Retirement

Investing for retirement is the financial equivalent of eating your vegetables: It's good for you, but sometimes downright distasteful.

Now a proposal making its way through the California Legislature has people talking about whether the state can make putting aside retirement money more palatable.

The plan would let private businesses and workers funnel direct payroll deposits into a retirement investment account. The California Public Employees' Retirement System would administer the pooled money.

No one knows how many of California's 6 million workers without retirement plans would sign up. Many struggle in jobs that leave them with little money at the end of the month. The arcane language of finance can paralyze the uninitiated. And let's face it: We love buying stuff, even when we can't afford it.

"We want everything now," said Lynn Wigginton, a Sacramento certified financial planner. "All the bells and whistles, the newest car. It's a real obstacle to saving for retirement."

The savings plan could change that by making individual retirement investing as close to set-it-and-forget-it as possible.

*Assembly Bill 2940 would let private-sector workers without an employer-sponsored retirement plan sign up for IRAs watched over by CalPERS. The same apparatus used to take taxes out of paychecks would channel direct deposits into the accounts, which could be carried from job to job.

The plan's supporters, including Gov. Arnold Schwarzenegger and author Assemblyman Kevin de León, D-Los Angeles, believe CalPERS is up to the task. It's already the nation's largest public pension fund, managing $250 billion in assets for 1.5 million state and local government workers.

CalPERS hasn't yet commented on the idea. The fund's staff is analyzing the proposal and should make a recommendation to the CalPERS board at its mid-May meeting. . . Please click here to go to the Sacramento Bee website for the full article.

*Background on the pension bill: Advised by New America's Asset Building Program, Assembly Member Kevin De Leon (D-Los Angeles), introduced AB 2940 to establish the California Employees Savings Program. CalESP will provide voluntary and portable retirement savings accounts that workers can freely take with them from job to job. New America’s Asset Building Program has long called for the creation of a portable retirement account that will enable all workers the opportunity to build wealth and achieve financial security.

CA Retirement Saving Proposal in Sacramento Bee | California Assembly Panel Passes State-run IRA Proposal

Communications — Thu, 10 Apr 2008 13:15:00 -0400

New America in the News:

Sacramento Bee | California Assembly Panel Passes State-run IRA Proposal

A proposal to open California's retirement system to private sector workers prompted questions Wednesday about government competing with investment firms and the pension system's ability to handle the unique program.

"We just don't know if it's going to work yet," Assemblyman Kevin Jeffries, R-Lake Elsinore, said of the proposal to have the California Public Employees' Retirement System offer IRA accounts to workers whose employers don't offer retirement savings plans.

But Sacramento carpenter Lou Delgado said he would be interested in a CalPERS retirement account.

"I'm 40 years old and don't have anything in a real retirement plan, just some savings of my own," Delgado said. "I've worked for a lot of (companies) and never had something like that, so, yeah, I'd be interested in anything that could put away a few dollars a week at this stage of my life."

*The proposal, Assembly Bill 2940 by Assemblyman Kevin De León, D-Los Angeles, passed its first test Wednesday when a committee that deals with retirement issues approved it on a 4-1 vote, with Jeffries abstaining and another Republican, Joel Anderson of Alpine, voting against it.

Supporters said the idea has been percolating for years, both on the federal level and in statehouses. It's being pushed by think tanks as a way to get low- and middle-income Americans to start saving for retirement to supplement Social Security payouts.

"We're trying to create a new model to get people on board," said Mark Paul, senior scholar at the New America Foundation, a nonprofit, nonpartisan institute . . .

As it is, about 6 million Californians work for businesses that do not offer retirement savings plans such as 401(k)s. Gov. Arnold Schwarzenegger said Tuesday that he likes the idea. . . Please click here to go to the Sacramento Bee website for the full article.

New America Foundation Praises New, Universal, Portable Retirement Savings Proposal

Communications — Tue, 08 Apr 2008 07:34:00 -0400

Today, Governor Arnold Schwarzenegger and Assembly Member Kevin De Leon (D-Los Angeles) unveiled a proposal to give California workers access to a low-cost, professionally managed retirement account.

“We applaud Governor Schwarzenegger and Assembly Member De Leon’s bipartisan leadership” said Olivia Calderon, California Legislative Director of New America’s Asset Building Program. “Too many hardworking Californians don’t have access to a work based retirement savings plan. This is an incredible opportunity for California to show the rest of the nation how to use existing tools to help workers build their savings for retirement and other family needs so that they… more

New America Foundation Commends California State Controller John Chiang's Financial Literacy Initiative

Communications — Wed, 02 Apr 2008 11:47:00 -0400

(Sacramento, California, 04/02/08)-- Today, at his First Annual Financial Literacy Fair, California State Controller John Chiang joined by Assembly Members Ted Lieu (D-Carson), Ted Gaines (R-Roseville), Martin Garrick (R-Carlsbad), Roger Niello (R-Sacramento), reinforced his commitment to advance a statewide financial literacy initiative that promotes access to economic opportunity amongst all Californian consumers.

"We commend the Controller's attention to what is a very important and often unaddressed need, consumer financial education," said Olivia Calderon, California Legislative Director of New America's Asset Building Program. "The Controller's engagement on this issue could go a long way to raise awareness and bring together… more

New America Foundation Recognizes President Bush's Financial Literacy Volunteer Initiative, But Sees Room for Improvement

Communications — Fri, 07 Mar 2008 16:02:00 -0500

Yesterday the White House launched a new Financial Literacy Volunteer Initiative to help connect struggling homeowners with financial counselors and to provide financial education at-large through a nationwide volunteer corps. New America Foundation's Asset Building Program has long called for the creation of a national Financial Services Corps and has made the idea a central component of its financial education policy agenda at both the federal and state level.

The announcement by the White House is an important first step. "However," said Melissa Koide, Deputy Director of New America's Financial… more

Ellen Seidman in U.S. Banker | Is the OTS Obsolete?

Communications — Sat, 01 Mar 2008 14:55:00 -0500

New America in the News:

Is the OTS Obsolete? (U.S. Banker, subscription only)

. . . "The system has worked well enough," says Ellen Seidman, who ran the Office of Thrift Supervision under President Clinton and now directs the New America Foundation's Financial Services and Education Project in Washington, D.C. "It's a case of 'If it isn't broke, don't fix it.' Though it's entirely reasonable that people are raising these questions now, it's not great for morale."

Abolishing the OTS would only raise a number of other problems, including whether the two main regulatory duties--overseeing thrifts and overseeing holding-banking companies--would be given, respectively, to the Office of the Comptroller of the Currency and the Federal Reserve, says Seidman. The OTS's input has been particularly necessary in ongoing discussions about interest-rate risk in 15- and 30-year mortgages, she says. . .

Ellen Seidman in New York Times | 'A Moral Hazard for a Housing Bailout'

Communications — Sat, 23 Feb 2008 10:14:00 -0500

New America in the News:

A ‘Moral Hazard’ for a Housing Bailout: Sorting the Victims From Those Who Volunteered (New York Times)

Ellen Seidman, a former director of the Office of Thrift Supervision and now a senior fellow at the New America Foundation, said the government’s first challenge is to buy mortgages at their true current value. If the government overpaid or became caught by an even further decline in the market value of its mortgages, taxpayers would indeed be bailing out both the industry and imprudent home buyers.

“It’s not easy, but it’s not impossible,” Ms. Seidman said. “There are various auction mechanisms, both inside and outside government.” ...

New America Foundation Commends Governor Arnold Schwarzenegger’s Bank on California Initiative

Communications — Thu, 24 Jan 2008 13:21:00 -0500

Today, California Governor Arnold Schwarzenegger announced he would launch a Bank on California initiative to connect lower income un-banked Californians with the financial products and services they need to begin climbing up economic ladder. The program builds on Bank on San Francisco, a citywide effort to bring 10,000 of the city’s estimated 50,000 un-banked residents into the financial mainstream through participating banks’ offerings and marketing of reasonably-priced products and services.

“We applaud Governor Schwarzenegger for recognizing that un-banked Californians are financially vulnerable and should be encouraged to become part of the financial mainstream,” said Olivia Calderon, California Legislative Director of… more

Ray Boshara, Phil Longman in Houston Chronicle | "Thrift is it in 2008"

Communications — Sat, 12 Jan 2008 10:18:00 -0500

New America in the News:
Time to Make Outsaving the Joneses a Reality (Houston Chronicle)

"One in seven families is dealing with a debt collector," Ray Boshara and Phillip Longman of the New America Foundation think tank wrote in a Washington Post commentary. "Children today are more likely to live through their parents' bankruptcy than their parents' divorce," they wrote. And that likelihood will increase this year. ...

New America Foundation Commends San Francisco Mayor Gavin Newsom’s Baby Savings Bond Proposal

Communications — Thu, 10 Jan 2008 14:26:00 -0500

Today, the New America Foundation Asset Building Program commended San Francisco Mayor Gavin Newsom’s innovative proposal to endow every child born in the city with a $500 Baby Savings Bond. The money, which would earn interest over time, would be available when the student graduates from high school, to be used for college costs or towards a first home.

“We applaud this bold, forward-looking proposal. Now that San Francisco has set the stage, we look to California and the rest of the country to offer young Americans the chance to realize their potential and to achieve their dreams,”… more

Ellen Seidman in American Banker | Obama's Bank-Issue 'Blank Slate'

Communications — Wed, 09 Jan 2008 17:20:00 -0500

New America in the News:

Assessing Obama's Bank-Issue 'Blank Slate' (American Banker)
"When you start campaigning in places like Florida and California, where these issues are front and center, you will hear more about it," said Ellen Seidman, who ran the Office of Thrift Supervision under President Clinton and now directs the New America Foundation's Financial Services and Education Project. ...

Ellen Seidman in Chicago Sun-Times | 'Home Prices and The Fed'

Communications — Sun, 30 Dec 2007 07:40:00 -0500

New America in the News:

What a year! But Chicago rolls with the punches. (Chicago Sun-Times)
"If you go back a year ago and look at the stories, and look at what the lending community was doing, [the problems do] tend to unfold more slowly in places like Chicago that are more stable," said Ellen Seidman, executive vice president at ShoreBank Corp. and the director of the Financial Services and Education Project at the New America Foundation. ...

Rourke O'Brien in the New York Post on Opportunity NYC

Communications — Tue, 18 Dec 2007 15:08:00 -0500

New America in the News:

More than 1,400 families have collected $740,000 in the first payout from the city's daring two-year experiment that rewards the poor with hard cash for doing good, officials said yesterday.

Another 919 families who enrolled in the "conditional cash transfer" program did not qualify by the first cutoff date, Nov. 15.

But city officials called the initial results of Opportunity NYC a success, noting that the first-in-the-nation initiative had been launched within months of being proposed and is now fully operational. ...

Rourke O'Brien, an asset-building analyst at the New America Foundation, said the complexity of the undertaking made the city's achievement thus far "really impressive."

He said it was especially important that poor people now had access to regular financial services through mandated bank accounts rather than "walking to the check casher down the street." ...

For the complete article, please follow this link.

Ellen Seidman in Wall Street Journal on Helping Troubled Homeowners

Communications — Sat, 15 Dec 2007 09:43:00 -0500

New America in the News:

Washington's leaders have been pushing many policy buttons to stem the worsening housing and credit crisis. They've yet to find the off button, however, and that's prompting a search for more-aggressive solutions.

This week's decision by Citigroup Inc. to bail out seven investment entities and bring $49 billion in assets onto its balance sheet effectively killed one of the centerpieces of the Bush administration's approach. Treasury Secretary Henry Paulson has pushed a giant rescue plan for off-the-books funds saddled with mortgage-backed debt, but banks have mostly done the painful work themselves.

Some other policy moves are getting under way, including a plan to freeze interest rates for some subprime mortgage borrowers and the Federal Reserve's move to offer banks special funding at lower-than-usual rates so they can lend more. The Fed has cut its key short-term rate by a full percentage point since August, and markets expect it to continue.

Still, if those steps fail to calm homeowners and markets, as some investors expect, debate is likely to grow about what levers remain. Some with an interventionist bent are raising proposals amounting to federal bailouts for homeowners facing foreclosure and the revival of New Deal-era programs. Earlier this month, the Mortgage Bankers Association said home foreclosures in the third quarter hit their highest rate since at least 1972. ...

This past week, the Center for American Progress, a liberal think tank, proposed that the government buy some mortgage-backed securities and create a new agency, the Family Foreclosure Rescue Corp. It would issue new, more affordable fixed-rate mortgages for those facing foreclosure whose homes are worth less than what they owe.

"There will be a louder discussion about do variations on this theme make sense, and could you pull it off?" says Ellen Seidman, a former economic adviser in the Clinton administration now at the New America Foundation. ...

For the complete article, please click here.

Ellen Seidman in U.S. News & World on Bush's Mortgage Plan

Communications — Fri, 07 Dec 2007 13:26:00 -0500

New America in the News:

The devil is in the details of President Bush's plan to curb the nation's escalating home foreclosures by freezing for five years the introductory "teaser" interest rates on many subprime loans. Borrowers who qualify—Bush estimates that up to 1.2 million might be eligible—will also have the option of refinancing into a new mortgage or switching to a loan insured by the Federal Housing Administration.

Lenders had already been working out deals with strapped subprime borrowers, but only a small number of homeowners have been able to renegotiate their loans. Bush's plan aims to speed up these deals by laying out criteria to help lenders determine who is eligible for help. "We hope that these guidelines will be adopted as reasonable and customary standard practice across the entire servicing industry," said Treasury Secretary Henry Paulson, who helped broker the deal with other regulators and mortgage lenders. Here are six things you should know about the plan:

It will benefit only a small group of subprime borrowers. ...

Borrowers must ask for help. ...

The plan is not a "silver bullet." ...

Questions remain about how it will work. ...

This is an industry-led deal, not a government bailout. ...

The plan will become a hot political issue. This is a bold step for an administration that has, until recently, insisted that the task of refinancing mortgage loans should be handled on a case-by-case basis. "There are obviously significant limitations on what they're willing to do, but I don't think we would have gotten this plan out of the administration that came into office in 2001," says Ellen Seidman, former director of both the Office of Thrift Supervision and the Federal Deposit Insurance Corp., who now heads a project at the New America Foundation. As the presidential election nears, the health of the economy—and how candidates will deal with the mortgage crisis—is gaining political importance. Some Democratic candidates argued that the plan doesn't go far enough and proposed their own plans. Hillary Clinton, for example, proposed an across-the-board rate freeze and a moratorium on foreclosures. John Edwards said he would freeze interest rates for seven years. ...

For the complete article, please follow this link.

Ellen Seidman Discusses Relief for Subprime Homeowners on KPCC

Communications — Wed, 05 Dec 2007 17:29:00 -0500

New America in the News:

Mortgage Expert Ellen Seidman interviewed with KPCC radio, please listen to the interview here.

"In an agreement that is set to be publicly announced by the Bush Administration on Thursday, December 6, a five-year freeze will be put on interest rates for certain subprime mortgages. The plan hopes to alleviate the growing number of foreclosures in the U.S., and the housing slump which is already aggravated financial markets." ... Please visit the KPCC website.

Ellen Seidman in Los Angeles Times on the Mortgage Crisis

Communications — Wed, 05 Dec 2007 15:21:00 -0500

New America in the News:

Amid escalating loan defaults and foreclosures, the Bush administration had until recently said lenders and borrowers should work out new loan terms on their own and not expect the government to step in.

But that changed abruptly last week as Treasury Secretary Henry Paulson convened lenders, investors and others to discuss freezing interest rates for some borrowers in hopes of staving off foreclosures. Details of the plan are expected to be announced this week.

As recently as Oct. 10, Paulson told reporters that he opposed the idea of modifying loans by broad category. The administration had held steadfast to this view, despite complaints by consumer activists that many borrowers had signed for loans that were doomed to fail when they reset at higher rates in the future.

The previous posture was consistent with the administration's strong free-market views and general wariness toward government intervention in the private economy.

But recent developments transformed the picture, observers said, suggesting that fallout from the mortgage markets was spreading. Lenders are making fewer loans, further cooling the housing market. That in turn is weakening consumer spending and is expected to cut into job growth.

The mounting damage helped spur a sharp Nov. 26 sell-off on Wall Street, moving the major stock market indexes into "correction" territory before beginning a rebound the next day.

"I think the capital-markets issue hit them in a way that the problems of individual homeowners and community devastation did not," said Ellen Seidman, former director of both the Office of Thrift Supervision and the Federal Deposit Insurance Corp., who now heads a New America Foundation financial education project. ...

For the complete story, please follow this link.

New America Foundation Praises Governor Arnold Schwarzenegger’s Leadership in Responding to Sub-prime Mortgage Loan Crisis

Communications — Tue, 20 Nov 2007 18:02:00 -0500

Today, California Governor Arnold Schwarzenegger announced an agreement with four large servicers of sub-prime mortgage loans to “fast-track” modifications to those loans so that homeowners who have been current, but are facing unaffordable loan payment resets, will be able to stay in their homes over the long term. The program builds on a proposal by FDIC Chair Sheila Bair that servicers freeze interest rates at current rates for homeowners who have been making timely payments on sub-prime loans with interest rates scheduled to reset.

California is the nation’s single largest state in terms of mortgages outstanding, and in September, had the… more

Karen Murrell in The Oklahoman on Financial Education

Communications — Sun, 28 Oct 2007 07:30:00 -0400

New America in the News:

Explosive growth in the number and complexity of financial products available to Americans has far outstripped programs aimed at teaching consumers how to choose and use those products, experts said Wednesday at a financial education conference in Oklahoma City.

Consumers have dozens of options unavailable to previous generations in terms of retirement plans, loans and credit cards, said Karen Murrell of the New America Foundation, a Washington, D.C.-based think tank.

"What hasn't changed is the amount of education people get to help them make these decisions," Murrell said.

One of the results has been a sharp decline in personal savings, Murrell said.

"People are not only spending every dime they have, they're dipping into savings," she said. "Debt is rising much faster than household income." ...

For the complete article, please follow this link.