The working draft of the Committee report of “best practices” around “the future of responsible mortgage subprime lending,” previously approved by the Committee and currently being considered by the Council, was also made public at this same June 18th meeting. The draft Committee report 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/materials.shtml , with key background accessible at http://www.treasury.gov/offices/domestic-finance/financial-instituti! on/fin-education/council/ .
This 26-page draft report was crafted by the Committee on the Under-Served with support by associated advisors as part of its special initiative on “the future of responsible mortgage subprime lending,” and is based on the Committee’s active consultation with a range of expert advisors who attended the Committee’s May 28th, 2008 meeting at the Treasury Department in Washington, D.C. Sixty leading experts, representing the federal government, state and federal regulators, leading banks and other financial institutions, the secondary (investor and securitization) market, foundations, academics and non-profit community organizations participated in the half-day working meeting. Participants included the FDIC, the U.S. Comptroller of the Currency, the U.S. Office of Thrift Supervision, the SEC, the National Credit Union Administration, HUD, FHA, Office of Fed! eral Housing Enterprise Oversight (regulator for Fannie Mae and Freddie Mac), the New York State Banking Superintendent, Goldman Sachs, Wells Fargo, Bank of America, Washington Mutual, the Financial Services Roundtable, Neighborhood Housing Services of America, NeighborWorks, and a host of others.
U.S. Treasury Under-Secretary Robert K. Steel gave opening remarks, along with U.S. Comptroller of the Currency John Dugan and SEC Commissioner Paul Atkins. U.S. Office of Thrift Superintendent Director John Reich and SBA Associate Administrator Anoop Prakash also submitted supporting remarks (visit here to view all comments and documents: http://www.operationhope.org/smdev/lf1.php?id=1460).
Vice Chair Bryant said “I am pleased that the Council endorsed our Committee’s recommendation to establish financial literacy at the very foundation of future, responsible mortgage subprime lending. I believe that there is nothing wrong with responsible subprime lending, and a lot right with it. I believe that responsible mortgage subprime lending has done more to lift the poor out of poverty than most anything else over the past 50 years, and that the real problem has been predatory subprime lending, irresponsible subprime lending, fraud-based, and investor-speculation-based subprime lending, and massive levels of borrower financial illiteracy. Individuals who unfortunately asked ‘what’s the payment’ versus ‘what’s the interest rate.’ And you never ask what the payment is when there is an interest rate attached.” Bryant continued, “The ! Committee is also very concerned that lending to the poor, the working class and the middle class might effectively dry up post mortgage subprime crisis, and that would not be good for America. We want to also signal that we want responsible mortgage subprime lending to continue on some reasonable basis, and that the credit markets should remain available to the under-served in this nation. Part of our mission at the Council is to help increase access of the under-served to mainstream financial services.”
Members of the Committee are Sharon Lechter, co-author of the Rich Dad, Poor Dad best-selling book series and founder and chief executive officer, Pay Your Family First; Dr. Robert V. Lee III, chairman and chief executive officer, Fresh Ministries, Inc.; and Ignacio Salazar, president, SER National – Jobs for Progress, Inc. Advisors to the Committee are The Honorable Anna Cabral, U.S. Treasurer and Carrie
Schwab Pomerantz, senior vice president and chief strategist, Consumer Education, Charles Schwab & Co, Inc. and president, The Charles Schwab Foundation. John Hope Bryant, founder, chairman and CEO of Operation HOPE, is vice chairman of the President’s Council and chairman of the Committee on the Under-Served.
About the U.S. President’s Advisory Council on Financial Literacy
The President’s Advisory Council on Financial Literacy (the Council) was created on January 22, 2008 by President George W. Bush. The Council’s purpose is to help keep competitive and assist the American people in understanding and addressing financial matters. Each member of the Council represents an industry involved with the delivery of financial education to American citizens. The President and the Secretary of the Treasury have tasked the Council to work with the public and private sector to help increase financial education efforts for youth in school and for adults in the workplace, increase access to financial services, establish measures of national financial literacy, conduct research on financial knowledge and to help strengthen public and private sector financial education programs. Financial guru Charles Schwab is chairman of the Council.
About the Committee on the Under-Served of the President’s Council
The Committee on the Under-Served of the President’s Council (the Committee) will focus on three key tasks: (1) gathering information to better understand efforts needed to identify and to differentiate responsible and irresponsible sub-prime mortgage lending, and outlining what a responsible sub-prime loan product looks like; (2) discussing other related issues such as proper and “common sense” clear loan disclosures and the overall context in which these products, disclosures and other related mortgage factors become active positive or negative contact points with respect to financial literacy; and (3) identifying what financial literacy initiatives are needed to address the massive levels of financial illiteracy that contributed to the current subprime crisis.
About Operation HOPE
Operation HOPE (HOPE) is a leading non-profit, social investment, banking and financial literacy empowerment organization dedicated to poverty eradication worldwide. Through several global initiatives and its three principal programs: Banking on Our Future (teaching youth about becoming financially empowered), HOPE Coalition America (financial emergency preparedness and recovery), and the HOPE Center Banking Network (loans, bill pay, computer literacy, understanding banking principles), HOPE is at the forefront of a silver rights movement to make free enterprise and capitalism relevant to all underserved communities. To learn more, visit http://www.operationhope.org/.