Financial Services and Education Project

Ellen Seidman in the Wall Street Journal | 'Nations Face Thorny Issues in Acquiring Stakes in Banks'

Articles — Sat, 11 Oct 2008 15:22:00 -0400

New America in the News:

One risk facing policy makers is that if the capital injections are seen as a government seal of approval, that could destabilize banks that don't receive investments, causing their customers to jump to other institutions, said Ellen Seidman, a former economic adviser in the Clinton administration.

"It's counterintuitive, but if we've learned one thing from this crisis, it's that we have a hard time predicting the behavior of the smaller savers and investors," said Ms. Seidman, now at the New America Foundation. LINK

Ellen Seidman in BusinessWeek | 'They Warned Us About the Mortgage Crisis'

Articles — Thu, 09 Oct 2008 15:25:00 -0400

New America in the News:

Assignee liability would radically reshape that market by making everyone involved potentially responsible when things go bad. Investment banks that created mortgage-backed securities and investors who bought them would be liable for financial damage if mortgages turned out to be fraudulent. The financial industry opposed assignee liability, maintaining that it would cripple the market for asset-backed securities. Major ratings agencies later agreed that allowing unlimited damages would be disruptive. The agencies threatened to stop evaluating many bonds tied to mortgages covered by the Georgia law.

But some banking experts speculate that if Georgia's example had spurred more states to adopt broad assignee liability, greater caution would have prevailed in the mortgage-securities market, possibly preventing the blowups of Lehman, Bear Stearns, and other once-mighty institutions. "If the Georgia law had held, it is possible that other states would have followed and there might have been change earlier," says Ellen Seidman, who headed the OTS from 1997 through 2001. LINK

Ellen Seidman in The Washington Independent | 'Homeowners Come Up Empty in Bailout'

Articles — Wed, 08 Oct 2008 14:39:00 -0400

New America in the News:
If Bank of America follows through with the loan modifications, “it would begin to break a huge logjam,” said Ellen Seidman, who studies the financial-services industry at the New America Foundation. It would set an example for other lenders -- and for the government. “But I’d hold off on getting excited about the serviced loans,” Seidman said, “until we see something starting to happen.” LINK

Ellen Seidman on NPR's Morning Edition | 'FDIC Considers Insuring Larger Bank Accounts'

Articles — Thu, 02 Oct 2008 14:02:00 -0400

New America in the News:

Ellen Seidman, financial services policy director for the New America Foundation think-tank, said the FDIC should not take on that risk without also passing on the cost.

"They've got to take into account the additional risk that they're taking on in setting the premiums," she said. "I've seen some talk of saying, 'Well, we're going to increase the deposit limit but we're not going to increase the premiums.' I don't think that makes any sense." LINK to audio

Ellen Seidman in Wall Street Journal MarketWatch | 'Money for Main Street'

Articles — Thu, 02 Oct 2008 13:22:00 -0400

New America in the News:

Raising the limit will be particularly helpful for small-business owners who will be able to worry less about keeping accounts at separate banks, said Ellen Seidman, financial services policy director in the Asset Building program of the New America Foundation.

"Splitting among several banks is terribly inconvenient for running a business," Seidman said. "Also, as a matter of business, the more money you have in a bank, the better services you tend to get from that bank." LINK

Ellen Seidman in American Banker | 'Wamu Vanishes, So May OTS and the Thrift Charter'

Communications — Mon, 29 Sep 2008 09:17:00 -0400

New America in the News:

The failure of the largest thrift in the nation has sealed the fate of the Office of Thrift Supervision, observers said Friday.

Washington Mutual Inc. accounted for about 20% of the assets overseen by the agency and 12% of its budget. Its collapse and subsequent sale to JPMorgan Chase & Co., which said it would not keep Wamu's thrift charter, heightens concerns about the OTS' viability and spurred staunch defenders to rethink its future.

"I don't know how anyone can't be questioning the viability of the OTS," said Lawrence Kaplan, a lawyer at Paul, Hastings, Janofsky & Walker LLP and a former OTS official.

Even Ellen Seidman, a former OTS director and longtime advocate of the agency's independence, said Wamu's collapse changes things.

"You can't just say the status quo is acceptable," she said, though she stopped short of supporting a regulatory merger. "Whereas my previous position on the subject was, you are not going to gain a whole lot by getting rid of one agency ... , I think there are more things to thin k about. The future of the OTS is firmly on the table now." . . . Full Story (subcription only)

Ellen Seidman in American Banker | 'Paulson Plan: Taking Steps Toward Clarity'

Communications — Fri, 26 Sep 2008 09:23:00 -0400

New America in the News:

Despite a live presidential explanation Wednesday night, two days of testimony by top government officials, and an endless series of lawmaker press conferences, many questions about the proposed bailout plan persist. Below, we offer answers to some frequently asked questions:

Who is the bailout supposed to help? . . .

Why doesn't the government just buy vacant real estate? Wouldn't that be easier? . . .

Observers also make this point: The problem is confidence on Wall Street, and buying vacant properties would not address that.

"It 's not clear that the foreclosed real estate or even the mortgages still held on the banks' books will have the effect" of stabilizing the markets, said Ellen Seidman, a former director of the Office of Thrift Supervision. "Of course, it's not clear that buying up MBS will, either." . . . Full story (subcription only)

Ellen Seidman in Pro Publica | 'The Regulators Who Saw Crisis Coming'

Communications — Thu, 25 Sep 2008 09:56:00 -0400

New America in the News:
Ellen Seidman, former director of the Treasury’s Office of Thrift Supervision, testified in that capacity before the House Committee on Banking and Financial Services on February 8, 2000 that her office had warned repeatedly of the risks of subprime lending: “Subprime lending, which involves lending to borrowers who have a significantly higher risk of default based on their credit repayment history, has been the subject of intensive OTS scrutiny by our policy and supervisory staff for several years. We started sounding warnings about risks arising from this lending activity as early as June 1998.” LINK

Ellen Seidman in The Minnesota Independent | 'Bachmann and Others Blame 1977 Fair-Lending Law for Adding to Economic Crisis'

Communications — Wed, 24 Sep 2008 12:53:00 -0400

New America in the News:
And while critics contend that CRA costs banks, other contend that once lenders move into underserved neighborhoods, profit can be made. Ellen Seidman of the New America Foundation’s Financial Services and Education Project told Congress, “Once these initiatives were started, many have proven to be sustainable in purely financial terms.” LINK

Learning from the Past

adminn — Fri, 19 Sep 2008 12:16:00 -0400

This paper, written for Furman Center at New York University in May 2008 by New America Foundation's Ellen Seidman and the Center for American Progress' Andrew Jakabovics, discusses asset disposition lessons learned from previous financial crises -- including the activities of the New Deal-era Home Owners Loan Corporation, the Resolution Trust Corporation formed in the wake of the savings and loan crisis, and the Department of Housing and Urban Development's more recent Asset Control Area program to dispose of foreclosed properties acquired through the Federal Housing Administration.

As Congress weighs the various strengths and weaknesses of creating a new Resolution… more