On May 5 , 2008, Treasury Secretary Paulson and Council Chairman Schwab announced committee leadership, inclusive of my chairing the Committee on the Under-Served. Joining me on the Under-Served Committee are Council Members and leaders in their own right, Sharon Lechter, Founder and Chief Executive Officer, Pay Your Family First; Rev. Dr. Robert V. Lee III, Chairman and Chief Executive Officer, Fresh Ministries, Inc.; and Ignacio Salazar, President, SER National - Jobs for Progress, Inc., along with Committee advisors U.S. Treasurer Anna Cabral and Carrie Schwab Pomerantz, President of the Charles Schwab Foundation. I will continue to serve as vice chairman of the Council as well as vice chairman of the Under-Served Commit! tee. Other Committee leadership assignments included Ted Beck as chairman of the Committee on Outreach, Dr. Tahira Hira, chair of the Committee on Financial Education Research, Janet Parker as chair of the Committee on Financial Education in the Workplace, Laura Levine as chair of the Committee on Financial Education for Youth, Cutler Dawson to serve as the Council Liaison to the U.S. Financial Literacy and Education Commission, and Ted Daniels to serve as the Alternate Council Liaison to the Commission. Established by the Fair and Accurate Credit Transactions Act of 2003, the Commission is comprised of 20 federal agencies and led by the U.S. Treasury Department.
Since the public announcement of the Committee on Under-Served for the President's Council, we have met several times, outlined a baseline strategy for moving forward, and taken specific action. Specifically, the Committee moved almost immediately to establish a special initiative around “The Future of Responsible Subprime Lending.” The basic premise here being that responsible sub-prime lending not only was not the cause of the current crisis, but on balance has been good for the poor and the under-served. Further, that the problem has been irresponsible sub-prime lending, predatory sub-prime lending, fraud and greed based sub-prime lending, and massive levels of borrower financial illiteracy. In summary, the Committee remains concerned that post sub-prime mor! tgage crisis there is a very real risk that traditional lending to groups from the poor, to the working class, to many in America’s middle class, may effectively dry up. It is the view of the Committee that this would not be good for America.
Accordingly, with the active counsel from senior officials at the U.S. Department of the Treasury as well as the U.S. Office of the Comptroller of the Currency and the FDIC, the Committee called a special meeting at the U.S. Department of the Treasury on May 28th, 2008, on “The Future of Responsible Subprime Lending.” The results of the May 28th meeting were formally presented to the full President’s Council at its June 18th public meeting for its consideration. I am pleased to report that the full Council endorsed a first-ever policy recommendation establishing "financial literacy at the very foundation (baseline) of future responsible lending.” The working draft of the Committee report of “best practices” around “the future of responsible subprime! mortgage lending,” previously approved by the Committee and currently under consideration by the Council, was also made public at this same June 18th meeting. The draft Committee report and key background can be accessed by the public on the U.S. Department of the Treasury website at http://www.treasury.gov/offices/domestic-finance/financial-institution/fin-education/council/3rd-meeting-2008/SubprimeProposal06182008meeting.pdf and http://www.treasury.gov/offices/domestic-finance/financial-institution/fin-education/council/3rd-meeting-2008/SubprimeBackground06182008%20meeting.pdf
Let me thank the following individuals for their key leadership and ! support around this important initiative:
- U.S. Treasury Under-Secretary for Domestic Finance Robert Steel
- FDIC Chair Sheila Bair
- U.S. Comptroller of the Currency John Dugan
- U.S. Office of Thrift Supervision Director John Reich
- U.S. Treasury Assistant Secretary David Nason
- National Credit Union Administration Chairwoman JoAnn Johnson
- U.S. Treasury Deputy Assistant Secretary for Financial Education Dan Iannicola
- Sharon Lechter, Founder and Chief Executive Officer, Pay Yourself First
- Dr. Robert V. Lee III, Chairman and CEO, FreshMinistries, Inc.
- Ignacio Salazar, President, SER National - Jobs for Progress, Inc.
- The Honorable Anna Cabral, United States Treasurer
- Carrie Schwab Pomerantz, President, Charles Schwab Foundation
Key Support for the Initiative provided by:
- Jeff Stoltzfoos, Senior Advisor to the Assistant Secretary for Financial Institutions, U.S. Department of the Treasury
- Barry Wides, Deputy Comptroller, Community Affairs, U.S. Comptroller of the Currency
- Robert Mooney, Deputy Director of Consumer Protection and Community Affairs, FDIC
- FDIC Moderators
- U.S. Treasury Office of Financial Education
- Sharon Jones, Senior Aide, Office of the Vice Chairman, U.S. President’s Advisory Council on Financial Literacy
- Rachael Doff, Chief of Staff, Office of the Chairman, Operation HOPE
- Ilya Monroe, Vice President, Administration, Operation HOPE
- Cara Heiden, Co-President, Wells Fargo Mortgage
- Bill Longbrake, Vice Chairman, Washington Mutual, and Chairman, Housing Policy Council at the Financial Services Roundtable
- Michael Townsend, Vice President, Legislative and Regulatory Affairs, Charles Schwab Corporation, on behalf of Chairman Schwab
- Ken Wade, Chief Executive Officer, NeighborWorks America
- Expert Advisors to the May 28th meeting
PUBLIC REMARKS WITH RESPECT TO THE INITIATIVE ON "THE FUTURE OF RESPONSIBLE SUBPRIME LENDING"
Treasury Under Secretary Robert K. Steel
Thank you and good morning. Let me first congratulate you on a timely and important meeting. I especially want to thank the President's Advisory Council on Financial Literacy and the Subcommittee on the Underserved for organizing this meeting. MORE
Office of Thrift Supervision Director John Reich
Homeownership remains the bedrock of strong communities and responsible subprime lending helps more Americans become homeowners,” Reich said. “It is important that as we strive to prevent the abuses of predatory lending, we do not close the doors of opportunity to credit-worthy subprime borrowers and deprive them of the chance to pursue the American dream of homeownership. MORE
SEC Commissioner Paul S. Atkins
Thank you very much for your kind introduction, Dan [Iannicola]. It is a privilege to be here as a member of the Securities and Exchange Commission, although I must note that the views that I express today are my own and do not necessarily reflect those of the SEC or my fellow Commissioners. MORE
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