Campaign News

Top Federal Reserve officials defended their handling of monetary policy in a freewheeling meeting with liberal activists at the annual Fed conference in Jackson Hole, Wyo.

Much of the meeting centered on whether the Fed should raise interest rates, as it's widely expected to do before the end of the year, and the likely impact of a hike on poor and minority communities.

"The economy has recovered for much of white America, but for black and Latino workers it has not," said Rod Adams, of Neighborhoods Organizing for Change in Minneapolis.

"If you decide that we're at maximum employment now and you intentionally slow down the economy, you'll be leaving us behind, pulling up the ladder right after you've climbed it," Adams said.

"In no way do I want to see the economy stall. In no way do I want to see the economy stop growing," said John Williams, president of the Federal Reserve Bank of San Francisco.

Since monetary policy takes a while to have an impact, the unemployment rate is likely to keep falling for a while, even if the Fed raises rates this year, Williams said.

"If we do wait too long, what happens is eventually the economy creates imbalances or overheats and we get into situations somehow where we have to react to that and when we react to that, that often leads to a recession or some other bad outcome," Williams said.

"I think the Federal Reserve is very much committed to having a set of monetary policies in place that achieve maximum sustainable employment over time. Where there are differences are: What's the precise interest rate settings to achieve that goal?" said William Dudley, president of the Federal Reserve Bank of New York.

The hourlong meeting was organized by Fed Up, a coalition of some two dozen community groups, labor unions and liberal policy groups that have sought to influence Fed policy.

An unusually large number of Fed officials attended the meeting, including Vice Chair Stanley Fischer, Eric Rosengren of the Boston Fed and Kansas City Fed President Esther George.

While the meeting, which was billed as a "listening session," was mostly cordial, some of the activists made their unhappiness over Fed policy clear.

Fed officials did not object when Kendra Brooks of the Philadelphia group ACTION United called out the central bank for the lack of diversity among its governors, boards of directors and staff members.

"I would be very surprised if anybody in the Federal Reserve system thinks that we've done well on that," Dudley said.

Neel Kashkari, president of the Minneapolis Fed, said some progress has been made in diversifying his own staff and board of directors, but conceded more work needed to be done.

By JIM ZARROLI

Source

President Donald Trump officially made his first mark on the Federal Reserve on Thursday, when the Senate voted 65-32 to approve his first and only nominee to the central bank’s board.

Randal Quarles, a private equity investor and veteran of the Treasury Department, will also take over as the Fed's top banking regulator as the first appointee to the position of vice chairman of supervision, a role created by the 2010 Dodd-Frank Act.

Read the full article here.

KQED - March 12, 2013 - California is still struggling to get back on its feet after a devastating housing crisis. And Wells Fargo is partly to blame for the sluggish recovery because it is refusing to modify home loans, according to a coalition of homeowners groups.

By foreclosing on homeowners who can't make their payments, the San Francisco-based bank will suck billions of dollars out of the state's economy, according to the Alliance of Californians for Community Empowerment, the Center for Popular Democracy and the Home Defenders League.

In a new report, the coalition charges that Wells Fargo has been less inclined to reduce the principle of home loans than have other banks, such as Bank of America.

Wells Fargo responded that it has a low foreclosure rate compared to the industry in general.

Wells Fargo's bias toward foreclosures is disproportionately affecting predominantly black and Latino neighborhoods, the report charges.

Right now, about 65,000 California homeowners have received notice of a pending foreclosure, and about 20 percent of these loans are serviced by Wells Fargo, the report says.

The report estimates that as of February 2013, Wells Fargo had 11,616 homes in its "foreclosure pipeline."

Foreclosing on the homes will have the following effects, according to the report:

Each home would lose approximately 22 percent of its value, for a total loss of approximately $1.07 billion,

Homes in the surrounding neighborhood would lose value as well, for an additional loss of about $2.2 billion, and

Government tax revenues would be cut by $20 million, as a result of that depreciation.

If the bank were to reduce the principle on the borrowers' loans, homeowners would have more money to spend. This would boost the state's economy, the coalition says.

Wells Fargo often bundles loans to sell to other entities, such as Fannie Mae, but acts as an agent for the new lender, collecting payments and handling foreclosures. In that capacity, Wells Fargo makes more money through foreclosures than loan modifications, the report says.

Wells Fargo has had an aggressive principal reduction program for loans that we own since 2009. Wells Fargo conducts all lending and servicing activities in a fair and responsible manner without regard to race or ethnicity. We are proud to be the nation’s leading lender.

Wells Fargo issued a written statement in response to the report:

Over the last four years, Wells Fargo has: • Helped more than 841,000 customers with loan modifications. • Provided $6.3 billion in principal forgiveness—most of which has gone to borrowers in California.

Wells Fargo consistently provides assistance to customers facing financial challenges. Wells Fargo’s delinquency and foreclosure rates continue to rate below the industry average. Here are the facts: • The combined national industry delinquency and foreclosure rates are roughly 11%. Wells Fargo’s is 7.04%. • The Wells Fargo foreclosure rate in California is 1.04%*, less than half of our national rate.

*As of Q4 2012

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The left-leaning Center for Popular Democracy on Wednesday filed a lawsuit in federal court against the Federal Reserve, seeking to shine light on the central bank’s president selection process.

The lawsuit, filed under the Freedom of Information Act, is a product of the “Fed Up” campaign to strip private bankers’ influence from the Fed’s top rungs and increase transparency in its leadership selection. The suit was filed after the Fed ignored a FOIA request filed in August seeking information on president selections in 2015 and 2016, the group said.

“The leaders of the twelve Reserve Banks are among the most powerful and influential actors in shaping the nation’s monetary policies, yet the process by which they are chosen is completely non-transparent,” the group wrote in the complaint, filed in the U.S. District Court for the Eastern District of New York.

The lawsuit comes as Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, prepares to leave the bank in February.

“The public has a right to obtain records about how the Federal Reserve’s leaders are selected, and there is no justification for the Fed’s withholding of basic information about its governance,” said Connie Chan, an attorney representing Fed Up, in a statement. “The fact that Fed Up has to bring this FOIA lawsuit is itself further evidence of the Fed’s lack of transparency.”

By Tara Jeffries

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