* WASHINGTON (7/10/08)--Sen. Barack Obama (D-Ill.), presidential hopeful, said Tuesday he would broaden a bankruptcy plan to include a “fast-track” process to help military families and help older Americans or those impacted by natural disasters (American Banker
July 9). The senator also criticized Sen. John McCain (R-Ariz.), his opponent in the presidential race, for siding with “big banks” and not believing that the government should protect Americans from poor lending practices. He also noted McCain’s support for a 2005 bankruptcy law that made it more difficult for consumers to discharge their debt by supporting lenders. A McCain spokesperson said 18 Democrats also supported the bill ... * WASHINGTON (7/10/08)--The Securities and Exchange Commission (SEC) Tuesday released findings
from 10-month examinations of three major credit rating agencies. The exams found that the agencies struggled with the increase in the number and complexity of subprime residential mortgage-backed securities and collateralized debt obligations deals since 2002. None of the agencies had specific written comprehensive procedures for rating the securities or deals. Aspects of the rating process were not disclosed or even documented, and conflicts of interest were mismanaged, according to the SEC report ... * WASHINGTON (7/10/08)--The Federal Housing Administration (FHA) should stand on its own, FHA Commissioner Brian Montgomery said last week during a forum on mortgage lending. The FHA needs to recruit and retain professional staff, he added. If the agency were independent, it could focus on its own mission and have the tools and staff it needs to serve that role, he said (American Banker
July 9) ... * WASHINGTON (7/10/08)--Treasury Secretary Henry Paulson supports using covered bonds by U.S. financial institutions as alternate liquidity sources. The bonds could decrease expenses for first-time home buyers and help existing ones refinance, he said. The Federal Deposit Insurance Corp. recently adopted a rule that would increase investors’ access to the bonds as collateral in case of a bank failure (American Banker
July 9). The bonds are more popular in Europe than in the U.S. ...