The Great Debate
A year ago the federal government and 49 states completed a $25 billion agreement with the...
A year ago the federal government and 49 states completed a $25 billion agreement with the nation’s largest mortgage servicers to settle claims of “robo-signing” and unlawful foreclosure practices. President Barack Obama announced the creation of the federal-state mortgage securities working group in his 2012 State of the Union address. The nation seemed on the verge of transforming the way banks treat struggling homeowners ‑ particularly those with “underwater” mortgages, in which a homeowner owes more than the house is worth.
These promises, however, have yet to be fulfilled. The latest interim report on the national mortgage settlement is due out this week, and banks will likely again declare that it offers proof that they are fulfilling their obligations. But the communities hit hardest by the foreclosure crisis have yet to see any meaningful relief.
Time is running out to ensure that these communities receive their fair share under the settlement. But it is not too late to provide meaningful assistance. The settlement monitors need to demand greater transparency from banks, and they need to see that banks comply with the fair-lending requirements set out in the agreement. They also need to aggressively police the servicing reforms to ensure that all homeowners get a fair opportunity to save their homes.
This settlement was designed to begin a new chapter in the resolution of the nation’s foreclosure crisis. It provided much-needed funding for legal aid, housing counselors and other foreclosure prevention services. It also committed the banks to billions of dollars in consumer relief to help keep struggling families in their homes. Critics recognized that the settlement size was far too small to solve the entire housing crisis, but they hoped it could change the way banks deal with foreclosures.
Unfortunately, there is little transparency about how the banks are using this money. They have not provided any loan-level data to show which borrowers are receiving assistance.
Moreover, mortgage servicers have complete discretion over who receives help. Advocates fear the banks have been cherry-picking expensive loans that are deeply underwater to meet their settlement obligations quickly. This provides an important service for the borrowers in that category but little systematic relief for low- and moderate-income communities suffering the most from the foreclosure crisis.
The lack of loan transparency and the discretion vested in the banks also make it hard to ensure that settlement relief is keeping families in their homes. The last monitor’s report showed that more than half the “relief” cited by the banks came through roughly $13 billion worth of short-sale agreements ‑ in which a borrower sells his or her home for less than the value of the mortgage.
Short sales help borrowers resolve a foreclosure. But they do not keep families in their homes. The lender also profits more from a short sale than a foreclosure – hardly the kind of penalty commensurate with the settling of billions of dollars in legal claims.
Worse, there are anecdotal reports that banks are writing off worthless second liens without helping homeowners out of foreclosure with their primary lenders. The banks are taking credit for writing down billions of dollars in worthless second mortgages. But these write-offs won’t save a family’s home ‑ unless the primary loan is modified at the same time.
We need to do a better job of ensuring that future settlements ‑ and there are plenty of continuing investigations into the mortgage mess ‑ direct relief to the hardest-hit communities. Bank regulators at the Federal Reserve and the Office of the Comptroller of the Currency have announced billion-dollar settlements to replace the botched Independent Foreclosure Review. They must pledge to do more to ensure consumer relief before letting lenders off the hook for improper foreclosures. Homeowner advocacy organizations like the Campaign for a Fair Settlement are pressing for such solutions.
Obama must also provide leadership. Last year he told the Democratic National Convention, “When a family can no longer be tricked into signing a mortgage they can’t afford, that family is protected, but so is the value of other people’s homes ‑ and so is the entire economy.”
He was right. Ending predatory lending, and lifting the hardest-hit communities up out of the foreclosure crisis, will help the entire nation.
It is time to fulfill that promise.
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Proposed Legislation Could Grant State Citizenship to Undocumented Immigrants
SILive.com - June 16, 2014, by Ryan Lavis - With the legislative session in Albany scheduled to end this week, one New York lawmaker is pushing legislation that would grant sweeping rights of...
SILive.com - June 16, 2014, by Ryan Lavis - With the legislative session in Albany scheduled to end this week, one New York lawmaker is pushing legislation that would grant sweeping rights of citizenship to millions of illegal immigrants and non-citizens, including the right to vote and access to healthcare.
The New York Is Home Act, sponsored by Bronx state Senator Gustavo Rivera, would provide benefits to non-citizens who meet certain criteria.
Requirements include proof of residence in New York state for at least 3 years, pledges to abide by New York laws and uphold the state constitution, as well as a willingness to serve on New York juries. Additionally, non-citizens would also have had to pay state taxes for at least 3 years.
After meeting these criteria, non-citizens would receive a form of state citizenship that includes the right to vote in all state and local elections and hold certain public offices. Additionally, they would have access to college financial aid and health insurance programs, and the ability to apply for drivers and professional licenses, according to a summary of the bill.
Staten Island Assemblywoman Nicole Malliotakis (R-East Shore/Brooklyn) opposed the bill.
"Extending the privilege of voting to those in our country illegally devalues United States citizenship and further erodes the incentive to enter the country through safe and proper channels," Ms. Malliotakis said in a statement. "While some of us are fighting to protect taxpaying citizens, others are looking to give rights and benefits to non-citizens. It is a shame that during these last days of session, this is the priority of some legislators."
State Sen. Diane Savino (D-North Shore/Brooklyn) questioned the logistics of the bill, and noted the responsibility of such immigration reform should ultimately fall on Congress.
"These are issues that rightfully belong to the federal government, and we need a Congress more willing to develop comprehensive solutions to citizenship," Sen. Savino said.
According to the bill, this legislation would not interfere with the federal government's authority to regulate immigration.
The bills sponsor told the Daily News that he does not expect his legislation to pass anytime soon.
"Obviously this is not something that's going to pass immediately, but nothing as broad as this or as bold as this passes immediately," Sen. Gustavo Rivera (D-Bronx), told the Daily News.
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Taking on the Private Prison Industry’s Corporate Backers
Activists are trying to combat both the accelerated tracking and detaining of immigrants and the use of for-profit prisons to hold them by targeting the big banks that prop up for-profit prison...
Activists are trying to combat both the accelerated tracking and detaining of immigrants and the use of for-profit prisons to hold them by targeting the big banks that prop up for-profit prison companies.
Read the full article here.
Fed officials tell activists rate hikes won't derail economy
An unusually large group of Federal Reserve policymakers appeared before activists on Thursday and defended their plans to raise interest rates to keep the U.S. economy from eventually overheating...
An unusually large group of Federal Reserve policymakers appeared before activists on Thursday and defended their plans to raise interest rates to keep the U.S. economy from eventually overheating.
Several policymakers said raising interest rates gradually would allow them to stimulate the economy for longer, but that an overheating economy could end in a recession.
"It's not about trying to stop the economy from growing," San Francisco Fed President John Williams told about 100 labor activists from the Fed Up coalition who pressed policymakers not to raise interest rates. "We're going to keep this economy growing, we are going to run it hot."
"My objective is not to slow down the economy," said Kansas City Fed President Esther George, who organized the meeting ahead of the annual central banking conference in Jackson Hole, Wyoming.
Fed policymakers have yet to decide when to raise rates again after lifting them in December for the first time in nearly a decade. Policymakers are divided whether to hike soon or take a more cautious approach.
A core group of Fed policymakers, the Board governors, are currently debating what is going on in the U.S. economy and how to set policy, Fed Vice Chair Stanley Fischer told the meeting.
"Everything that's being argued here is being argued in the board as well," Fischer said.
Much of the public commentary of Fed officials in recent weeks suggests the central bank is moving closer to a hike.
But the activists, who met with 11 Fed policymakers, used catcalls and applause to signal they were not buying it.
Years of lackluster wage gains and underemployment have left many Americans feeling left out of the country's economic recovery despite a 4.9 percent jobless rate.
Raising rates at this point in the recovery, said Rod Adams of Minneapolis, means "You'll be leaving us behind, pulling up the ladder right after you've climbed it."
The meeting, billed by organizers as a polite "listening session" for exchanging ideas, turned out to be a tough grilling for the Fed policymakers, who rarely appear in public in such numbers.
Fed officials worry that leaving rates too low for too long could stoke inflation, forcing the Fed to raise rates aggressively.
"One of the key goals should be that we don't have another recession," said Boston Fed President Eric Rosengren.
(Reporting by Ann Saphir and Jason Lange; Editing by Toni Reinhold and Andrew Hay)
By Ann Saphir and Jason Lange
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Which States Could Adopt Automatic Voter Registration Next?
If Americans needed any further proof that voting itself has become a partisan battleground, look no further than proposals calling for automatic voter registration.
California this month...
If Americans needed any further proof that voting itself has become a partisan battleground, look no further than proposals calling for automatic voter registration.
California this month enacted a law that will automatically register people to vote when they get or renew a driver's license or state identification card from the Department of Motor Vehicles (DMV), following the example set by Oregon several months ago. Over time, this could bring most of the 6.6 million Californians who are eligible but not yet registered onto the voting rolls. Alex Padilla, California's secretary of state and sponsor of the measure, calls it potentially the largest voter registration drive in U.S. history.
Other states could soon follow.
Legislators have introduced automatic voter registration bills in 16 additional states, including Hawaii, Illinois and Vermont, as well as the District of Columbia. New Jersey lawmakers approved a package that includes automatic voter registration in June. Republican Gov. Chris Christie hasn't acted on it, but he's made his opposition clear.
"The current process creates an unnecessary barrier for citizens to exercise their fundamental right to vote," said state Sen. Andy Manar, a sponsor of the Illinois measure. "And it's an inefficient use of taxpayer dollars."
The states where bills have seen real movement, however, are all blue states. In states where Republicans control the legislature -- including Georgia, South Carolina and Texas -- measures have mostly languished in committee.
Supporters argue that the real reason for Republican opposition is the party's worry that automatic registration would boost the number of poor and young voters -- groups that favor Democrats. But Republicans complain that automatically registering people to vote based on their DMV status will result in more fraud because, for example, teens still too young to vote and undocumented immigrants get driver's licenses.
In New Jersey, more than 85 percent of eligible citizens are already registered to vote. During a radio appearance in June, Gov. Christie said that, "there's no question in my mind that there are some advocates of this who are looking to increase the opportunities for voter fraud. That's not democracy either."
Studies have shown, however, that voter fraud seldom happens. Proponents of automatic voter registration say that governments have a responsibility to ensure eligible citizens have the opportunity to exercise the franchise, without unnecessary hurdles.
Supporters of the idea are currently collecting signatures in Alaska to put it on the ballot next year. If Christie ultimately vetoes the New Jersey package, a ballot measure may be likely there as well.
"It's not just an election modernization reform, it's a shifting of responsibilty for who populates the rolls," said Katrina Gamble, director of civic engagement and politics at the Center for Popular Democracy. "Even before Oregon, people saw automatic voter registration as the most tranformative reform that we can move that would bring a huge number of people onto the rolls."
Huge numbers of eligible citizens aren't registered to vote. In addition to the nearly 7 million Californians, there are 2.3 million such people in Illinois and there were 300,000 in Oregon.
"If you look across the country, there are at least 50 million people who are eligible but not registered to vote," said Jonathan Brater, counsel for the democracy program at NYU's Brennan Center for Justice. "We see year after year that registration is one of the biggest obstacles to participation."
Other states might explore other models, like using agencies other than the DMV to find potential voters. If the Alaska initiative passes next year, the state will find potential voters through its Permanent Fund, which pays dividends to residents based on oil revenues.
Regardless of the database that's used, automatic registration has the potential to be more accurate than the current approach, which in many places still means relying on paper forms. It should also save money. When Barack Obama was elected president in 2008, only Arizona and Washington offered online registration. Earlier this month, Vermont became the 26th state to allow voters to register online. Going paper-free saves states at least 50 cents on every registration.
It's in part for that reason that Republican legislators in states including Florida, Georgia and Oklahoma have supported online registration. Supporters of automatic voter registration hope that promises of savings might bring GOP lawmakers around to supporting things like registration through the DMV, too.
So far, that's not happening.
In fact, the way that high-profile Democrats running for president have embraced the idea seems to be driving Republicans away. U.S. Sen. Bernie Sanders of Vermont introduced an automatic voter registration bill in Congress, and Hillary Clinton supported the idea during a speech earlier this year in which she castigated the GOP for trying to "disempower and disenfranchise young people, poor people, people with disabilities and people of color," through voter ID requirements and attacks on early voting.
Clinton's speech, according to polling, cost automatic voter registration support among Republican voters. A majority of Republicans (53 percent) supported the idea when Oregon passed its law in March, but after Clinton gave her speech in June, GOP support dropped to 38 percent. When survey respondents were told Clinton backed the idea, their support plummeted further, to 28 percent.
Source: Governing
Interviews for Resistance: New Progressive Coalition Calls for “Millions of Jobs”
Interviews for Resistance: New Progressive Coalition Calls for “Millions of Jobs”
A coalition of unions and other progressive organizations is pushing lawmakers on a jobs and infrastructure bill that would put millions of people to work.
...
A coalition of unions and other progressive organizations is pushing lawmakers on a jobs and infrastructure bill that would put millions of people to work.
Read the full article here.
The Tip of the Iceberg: Charter School Vulnerabilities To Waste, Fraud, And Abuse
The Tip of the Iceberg: Charter School Vulnerabilities To Waste, Fraud, And Abuse
Escalating Fraud Warrants Immediate Federal and State Action to Protect Public...
The Tip of the Iceberg: Charter School Vulnerabilities To Waste, Fraud, And AbuseEscalating Fraud Warrants Immediate Federal and State Action to Protect Public Dollars and Prevent Financial MismanagementDownload the report hereApril 2015Executive SummaryA year ago, the Center for Popular Democracy (CPD) issued a report demonstrating that charter schools in 15 states—about one-third of the states with charter schools—had experienced over $100 million in reported fraud, waste, abuse, and mismanagement. This report offers further evidence that the money we know has been misused is just the tip of the iceberg. Over the past 12 months, millions of dollars of new alleged and confirmed financial fraud, waste, abuse, and mismanagement in charter schools have come to light, bringing the new total to over $200 million.Despite the tremendous ongoing investment of public dollars to charter schools, government at all levels has failed to implement systems that proactively monitor charter schools for fraud, waste, abuse, and mismanagement. While charter schools are subject to significant reporting requirements by various public offices (including federal monitors, chartering entities, county superintendents, and state controllers and auditors), very few public offices regularly monitor for fraud.The number of instances of serious fraud uncovered by whistleblowers, reporters, and investigations suggests that the fraud problem extends well beyond the cases we know about. According to standard forensic auditing methodologies, the deficiencies in charter oversight throughout the country suggest that federal, state, and local governments stand to lose more than $1.4 billion in 2015.b 1 The vast majority of the fraud perpetrated by charter officials will go undetected because the federal government, the states, and local charter authorizers lack the oversight necessary to detect the fraud.Setting up systems that detect and deter charter school fraud is critical. Investments in strong oversight systems will almost certainly offset the necessary costs. We recommend the following reforms:
Mandate audits that are specifically designed to detect and prevent fraud, and increase the transparency and accountability of charter school operators and managers. Clear planning-based public investments to ensure that any expansions of charter school investments ensure equity, transparency, and accountability. Increased transparency and accountability to ensure that charter schools provide the information necessary for state agencies to detect and prevent fraud.State and federal lawmakers should act now to put systems in place to prevent fraud, waste, abuse and mismanagement. While the majority of state legislative sessions are coming to an end, there is an opportunity to address the charter school fraud problem on a federal level by including strong oversight requirements in the Elementary and Secondary Education Act (ESEA), which is currently being debated in Congress. Unfortunately, some ESEA proposals do very little reduce the vulnerabilities that exist in the current law. If the Act is passed without the inclusion of the reforms outlined in this report, taxpayers stand to lose millions more dollars to charter school fraud, waste, abuse, and mismanagement.Download the report here
Fed Chair Janet Yellen: Slowdown in job market likely ‘transitory’
Fed Chair Janet Yellen: Slowdown in job market likely ‘transitory’
Federal Reserve Board Chair Janet L. Yellen expressed hope Tuesday morning that the slowdown in the U.S. job market would prove temporary, but she emphasized that the central bank would be...
Federal Reserve Board Chair Janet L. Yellen expressed hope Tuesday morning that the slowdown in the U.S. job market would prove temporary, but she emphasized that the central bank would be cautious in raising interest rates again.
Yellen, testifying before the Senate Banking, Housing and Urban Affairs Committee, acknowledged that hiring has dropped off sharply in recent months, but she also pointed to early signs that wages are beginning to rise after years of stagnation. She said she is "optimistic" that the progress in employment will continue.
"We believe that will turn around, expect it to turn around, but we are taking a cautious approach … to make sure that expectation is borne out," Yellen told lawmakers.
The Fed is responsible for charting the course for the nation’s economy, with the dual mission to keep prices stable and strengthen employment. It does that by adjusting the influential federal funds rate. A higher rate helps curb inflation by making borrowing money more expensive, which discourages spending and investment and reins in economic growth. A lower rate means that money is cheap, stimulating purchases by households and businesses. That helps boost employment and speeds up the economy.
The Fed chief's assessment comes less than a week after the Fed unanimously voted to leave its benchmark interest rate unchanged. The central bank raised rates in December for the first time since the Great Recession but has not done so again amid persistent concerns about the health of the global economy.
Yellen said Tuesday that there is still "considerable uncertainty" over her outlook, with such risks as slow growth at home, turbulence in China and volatility in financial markets.
The most immediate threat comes from across the Atlantic Ocean, where Britain will vote Thursday on whether to remain in the European Union. A decision to exit — popularly known as Brexit — would upend Britain's four-decade partnership with the continent and throw the future of Europe’s open market into doubt.
Already, the British pound has been on a roller coaster as the probability of departure shifts with each poll. International policymakers have warned that a decision to leave would lower economic growth in the country by more than 5 percent over the next three years and potentially ripple across the rest of the world.
"A U.K. vote to exit the European Union could have significant economic repercussions," Yellen said Tuesday.
In the aftermath of the 2008 financial crisis, the Fed slashed its target rate all the way to zero and pumped trillions of dollars into the economy in a bid to bolster the American recovery. More than seven years later, it is finally in the process of withdrawing that support.
The first move was in December, when the Fed nudged its target rate up to a range of 0.25 to 0.5 percent. At the time, officials anticipated raising rates four times this year, but the uncertainty in the global economy has forced them to downgrade that projection. Most Fed officials now think only two rate hikes are warranted this year, and a growing number think only one will be necessary.
That shift in thinking at the central bank is evident in Yellen’s own statements. Just last month, she had signaled that the central bank could raise rates "probably in the coming months." But Yellen dropped the reference in a speech early this month, after disappointing government data showed employers added just 38,000 jobs in May. And last week, she told reporters that she is "not comfortable to say it's in the next meeting or two."
On Tuesday, Yellen made the case for caution. Because rates are already so low, the Fed has limited room to reduce them further if the economy were to weaken, she said. Moving gradually also gives the central bank time to assess whether its forecast of continued economic improvement will come true.
"Our cautious approach to adjusting monetary policy remains appropriate," she said.
The Fed has faced criticism from both the left and the right recently over its governance. Sen. Richard C. Shelby (R-Ala.), chairman of the Banking Committee, opened the hearing Tuesday by calling on the Fed to follow more stringent rules for setting policy and to explain when it deviates.
"The desire to preserve the Fed’s independence, however, should not preclude consideration of additional measures to increase the transparency of the board’s actions," he said.
Meanwhile, Sen. Sherrod Brown (D-Ohio) focused on diversity within the Fed’s top ranks. Last month, more than 100 lawmakers sent a letter to Yellen arguing for more minority representation among its leadership.
The central bank is led by a board of governors based in Washington and 12 regional bank presidents scattered throughout the country. The governors are appointed by the president and confirmed by the Senate, but regional bank leaders are chosen by local boards of directors.
Those officials tend to be white men. Yellen is the first woman to serve as chair in the central bank’s 101-year history. Only three Fed governors have been African American, and there have been no black regional bank presidents. No one now in the top brass is Hispanic.
By Ylan Q. Mui
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Fed's Williams vows more transparency after meeting with Fed Up
San Francisco Fed President John Williams has promised more transparency after a rare meeting with a coalition of community and labor groups which also urged the U.S. central banker to keep...
San Francisco Fed President John Williams has promised more transparency after a rare meeting with a coalition of community and labor groups which also urged the U.S. central banker to keep interest rates low.
Williams largely dismissed their call to hold off on interest-rate hikes, repeating his mantra that monetary policy will depend on economic data. But he said the meeting earlier this week pushed him to "think a little more proactively" about how the Fed recruits and promotes top management.
"I want the Fed to be more transparent," Williams said in an interview. "We've learned along the way that this process of selecting presidents and other aspects of the Fed are not that clear to the public. We should make it more open."
While the San Francisco Fed is not searching for a president or first vice-president, "we want to make sure not only are we doing it right, but also in the future maybe to move the ball forward even further," he said.
He noted that the Minneapolis Fed's openness about its ongoing presidential search is one example to learn from.
The Fed's perceived opaqueness has drawn increasing fire in recent months, with Fed Chair Janet Yellen in testimony this week standing her ground against Congressional efforts to subject the Fed to more oversight. Regional Fed banks' executive searches are also under scrutiny for apparent insularity.
Williams said the meeting also reminded him that despite strengthening overall economic growth, there are "a significant number of people who are left behind and struggling."
One example is Ebony Isler, who ran a hairdressing business until recession-hit clients could not afford her services.
Now, as a part-time cashier at the San Francisco Giants' downtown ballpark, she relies on high-interest loans to bridge her paydays.
"I can't find a job that pays me enough to be self-sufficient," Isler said in an interview after she and a dozen other members of the non-profit group Fed Up met with Williams on Monday.
The group, which first grabbed national attention last summer when it crashed the Kansas City Fed's annual central bankers' meeting in Jackson Hole Wyoming, presented Williams a report arguing that as long as inflation and wage growth remains dull, the Fed should keep rates near zero. (/news/mind-gap-how-federal-reserve-can-help-raise-wages-america-s-women-and-men)
Williams regularly meets with bankers and chief executives.
Meeting with activists, he said, "helps you to think concretely about why are people out of the labor force, what are the problems they are facing."
The group has also sat down with Yellen, Kansas City Fed President Esther George and Boston Fed chief Eric Rosengren.
Source: CNBC
Activists Try to Turn Anti-Trump Protests Toward 9 Companies
Liberal activists have flooded their elected representatives with letters, calls, and town hall protests to encourage lawmakers to resist President Trump. Now, two activist groups are hoping to...
Liberal activists have flooded their elected representatives with letters, calls, and town hall protests to encourage lawmakers to resist President Trump. Now, two activist groups are hoping to turn the wave of anti-Trump outrage against nine corporations they say are enabling Trump's agenda.
The progressive alliance Center for Popular Democracy and immigrant rights group Make the Road New York have partnered to create a new platform to "name and shame" companies they say are working with Trump or profiting from what they describe as his "anti-immigrant, anti-worker" agenda.
Read full article here.
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