Warren and Cummings to OCC and Federal Reserve: Illegal Foreclosures are Not ‘Corporate Trade Secrets’

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Warren and Cummings to OCC and Federal Reserve: Illegal Foreclosures are Not ‘Corporate Trade Secrets’

Warren and Cummings to OCC and Federal Reserve: Illegal Foreclosures are Not ‘Corporate Trade Secrets’

Letter Challenges Decision to Withhold Documents from Congress on

Illegal Foreclosures, Inflated Fees, and Fraudulent Court Filings

Washington, DC (April 10, 2013)—Today, Senator Elizabeth Warren, Member of the Senate Committee on Banking, Housing and Urban Affairs, and Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, sent a letter to Federal Reserve Chairman Ben Bernanke and Comptroller of the Currency Thomas Curry challenging the decision by agency staff not to provide any documents in response to a request from the Members of Congress seeking documents relating to violations of federal and state law by mortgage servicing companies.

At a meeting yesterday, Warren, Cummings, and Rep. Maxine Waters, Ranking Member of the House Financial Services Committee, were informed by staff from the Federal Reserve and the Office of the Comptroller of the Currency (OCC) that they would not produce any documents relating to specific mortgage servicers involving illegal foreclosures, inflated fees, or fraudulent court documents.  Staff from the agencies claimed these documents are the “trade secrets” of mortgage servicing companies and should be withheld from Members of Congress because producing them could be interpreted as a waiver of their authority to withhold proprietary business information from the public.

“We strongly believe that documents should not be withheld from any Member of Congress based on the flawed argument that illegal activity by banks is somehow their proprietary business information.  Breaking the law is not a corporate trade secret,” wrote the Members.  “As regulators, you identified systemic and widespread abuses two years ago, and concealing important information about these violations limits our ability to fulfill our responsibility to conduct oversight over the actions of mortgage servicing companies and to develop legislation to protect our constituents from further abuse.”

Two years ago this week, the regulators issued a public report announcing that 14 mortgage servicers were engaging in “violations of applicable federal and state law,” that these abuses have “widespread consequences for the national housing market and borrowers,” and that they had identified illegal foreclosures against our nation’s men and women in uniform who are protected by the Servicemembers Civil Relief Act (SCRA).  After directing the 14 servicers to hire independent consultants to conduct a review that would identify as many harmed borrowers as possible, in February the regulators terminated the review and finalized settlement agreements with 11 of the servicers.

The request from Warren and Cummings on January 31, 2013, sought documents detailing what the review actually found, such as the number of improper foreclosures, the amount of inflated fees, or the extent of abusive practices by each mortgage servicer.  Yesterday, the regulators’ staff refused to provide any documents that would identify wrongdoing by any specific bank.

Today’s letter calls this decision a “mistake.”  After citing the legal definition of a “trade secret,” the Members wrote:  “Obviously, this definition does not encompass illegal activity.  It would be very surprising indeed if mortgage servicing companies argued that their ability to engage in illegal foreclosures and charge inflated fees is a commercially viable plan derived from corporate ‘innovation.’”

The letter also points out that the agencies have clear regulatory discretion to provide Members of Congress with the documents, and that the agencies could protect against a potential waiver by sending a simple cover letter, as other agencies have done routinely. The members conclude: “For these reasons, we hope that you will reconsider your staff’s positions and work with us to achieve a mutually agreeable accommodation that serves both of our interests.”

source: http://democrats.oversight.house.gov

 

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4 Responses to “Warren and Cummings to OCC and Federal Reserve: Illegal Foreclosures are Not ‘Corporate Trade Secrets’”

  1. GuyFawkesLives says:

    Even though we all are shocked by the apparent lack of oversight, this does take the cake.

    The OCC needs to be eliminated.

  2. Sarah says:

    It might be National Security, seriously. DC is conducting wars as we speak. Look at what Banksters are doing to Europe, no bullets needed, Cummings has been saying ‘hey hold on there’ for the past 4 years, perhaps for posterity. He needs to condemn the President for his failures on human rights.

  3. joe says:

    United states of America the fraud capital of the world

  4. Ron says:

    Well of course they don’t want their illegal activity on the news. What are you guys thinking. Just the FACTS Mam — why would Jamie Dimon give anyone the straight poop? In reality it should mean jail time for him and even the regulators. It took more than criminal bankers to steal millions of homes — regulators were either drugged into a coma by the banks OR they were taking big dollars OR promised big time jobs if they stay asleep.

    I hope Elizabeth Warren and Maxine Waters grab Dimon by the balls and all of his henchmen — snip them off and then send him to jail. Eric Holder should go with them for sitting on his ass and doing nothing while they stole the homes of Americans that became unemployed because of the banks shell games.

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