Financial Services and Education Project: Publications, Events and More

Ellen Seidman in the Wall Street Journal | 'Nations Face Thorny Issues in Acquiring Stakes in Banks'

Articles — Sat, 11 Oct 2008 15:22:00 -0400

New America in the News:

One risk facing policy makers is that if the capital injections are seen as a government seal of approval, that could destabilize banks that don't receive investments, causing their customers to jump to other institutions, said Ellen Seidman, a former economic adviser in the Clinton administration.

"It's counterintuitive, but if we've learned one thing from this crisis, it's that we have a hard time predicting the behavior of the smaller savers and investors," said Ms. Seidman, now at the New America Foundation. LINK

Ellen Seidman in BusinessWeek | 'They Warned Us About the Mortgage Crisis'

Articles — Thu, 09 Oct 2008 15:25:00 -0400

New America in the News:

Assignee liability would radically reshape that market by making everyone involved potentially responsible when things go bad. Investment banks that created mortgage-backed securities and investors who bought them would be liable for financial damage if mortgages turned out to be fraudulent. The financial industry opposed assignee liability, maintaining that it would cripple the market for asset-backed securities. Major ratings agencies later agreed that allowing unlimited damages would be disruptive. The agencies threatened to stop evaluating many bonds tied to mortgages covered by the Georgia law.

But some banking experts speculate that if Georgia's example had spurred more states to adopt broad assignee liability, greater caution would have prevailed in the mortgage-securities market, possibly preventing the blowups of Lehman, Bear Stearns, and other once-mighty institutions. "If the Georgia law had held, it is possible that other states would have followed and there might have been change earlier," says Ellen Seidman, who headed the OTS from 1997 through 2001. LINK

Ellen Seidman in The Washington Independent | 'Homeowners Come Up Empty in Bailout'

Articles — Wed, 08 Oct 2008 14:39:00 -0400

New America in the News:
If Bank of America follows through with the loan modifications, “it would begin to break a huge logjam,” said Ellen Seidman, who studies the financial-services industry at the New America Foundation. It would set an example for other lenders -- and for the government. “But I’d hold off on getting excited about the serviced loans,” Seidman said, “until we see something starting to happen.” LINK

Ellen Seidman on NPR's Morning Edition | 'FDIC Considers Insuring Larger Bank Accounts'

Articles — Thu, 02 Oct 2008 14:02:00 -0400

New America in the News:

Ellen Seidman, financial services policy director for the New America Foundation think-tank, said the FDIC should not take on that risk without also passing on the cost.

"They've got to take into account the additional risk that they're taking on in setting the premiums," she said. "I've seen some talk of saying, 'Well, we're going to increase the deposit limit but we're not going to increase the premiums.' I don't think that makes any sense." LINK to audio

Ellen Seidman in Wall Street Journal MarketWatch | 'Money for Main Street'

Articles — Thu, 02 Oct 2008 13:22:00 -0400

New America in the News:

Raising the limit will be particularly helpful for small-business owners who will be able to worry less about keeping accounts at separate banks, said Ellen Seidman, financial services policy director in the Asset Building program of the New America Foundation.

"Splitting among several banks is terribly inconvenient for running a business," Seidman said. "Also, as a matter of business, the more money you have in a bank, the better services you tend to get from that bank." LINK

Ellen Seidman in American Banker | 'Wamu Vanishes, So May OTS and the Thrift Charter'

Communications — Mon, 29 Sep 2008 09:17:00 -0400

New America in the News:

The failure of the largest thrift in the nation has sealed the fate of the Office of Thrift Supervision, observers said Friday.

Washington Mutual Inc. accounted for about 20% of the assets overseen by the agency and 12% of its budget. Its collapse and subsequent sale to JPMorgan Chase & Co., which said it would not keep Wamu's thrift charter, heightens concerns about the OTS' viability and spurred staunch defenders to rethink its future.

"I don't know how anyone can't be questioning the viability of the OTS," said Lawrence Kaplan, a lawyer at Paul, Hastings, Janofsky & Walker LLP and a former OTS official.

Even Ellen Seidman, a former OTS director and longtime advocate of the agency's independence, said Wamu's collapse changes things.

"You can't just say the status quo is acceptable," she said, though she stopped short of supporting a regulatory merger. "Whereas my previous position on the subject was, you are not going to gain a whole lot by getting rid of one agency ... , I think there are more things to thin k about. The future of the OTS is firmly on the table now." . . . Full Story (subcription only)

Ellen Seidman in American Banker | 'Paulson Plan: Taking Steps Toward Clarity'

Communications — Fri, 26 Sep 2008 09:23:00 -0400

New America in the News:

Despite a live presidential explanation Wednesday night, two days of testimony by top government officials, and an endless series of lawmaker press conferences, many questions about the proposed bailout plan persist. Below, we offer answers to some frequently asked questions:

Who is the bailout supposed to help? . . .

Why doesn't the government just buy vacant real estate? Wouldn't that be easier? . . .

Observers also make this point: The problem is confidence on Wall Street, and buying vacant properties would not address that.

"It 's not clear that the foreclosed real estate or even the mortgages still held on the banks' books will have the effect" of stabilizing the markets, said Ellen Seidman, a former director of the Office of Thrift Supervision. "Of course, it's not clear that buying up MBS will, either." . . . Full story (subcription only)

Ellen Seidman in Pro Publica | 'The Regulators Who Saw Crisis Coming'

Communications — Thu, 25 Sep 2008 09:56:00 -0400

New America in the News:
Ellen Seidman, former director of the Treasury’s Office of Thrift Supervision, testified in that capacity before the House Committee on Banking and Financial Services on February 8, 2000 that her office had warned repeatedly of the risks of subprime lending: “Subprime lending, which involves lending to borrowers who have a significantly higher risk of default based on their credit repayment history, has been the subject of intensive OTS scrutiny by our policy and supervisory staff for several years. We started sounding warnings about risks arising from this lending activity as early as June 1998.” LINK

Ellen Seidman in The Minnesota Independent | 'Bachmann and Others Blame 1977 Fair-Lending Law for Adding to Economic Crisis'

Communications — Wed, 24 Sep 2008 12:53:00 -0400

New America in the News:
And while critics contend that CRA costs banks, other contend that once lenders move into underserved neighborhoods, profit can be made. Ellen Seidman of the New America Foundation’s Financial Services and Education Project told Congress, “Once these initiatives were started, many have proven to be sustainable in purely financial terms.” LINK

Learning from the Past

adminn — Fri, 19 Sep 2008 12:16:00 -0400

This paper, written for Furman Center at New York University in May 2008 by New America Foundation's Ellen Seidman and the Center for American Progress' Andrew Jakabovics, discusses asset disposition lessons learned from previous financial crises -- including the activities of the New Deal-era Home Owners Loan Corporation, the Resolution Trust Corporation formed in the wake of the savings and loan crisis, and the Department of Housing and Urban Development's more recent Asset Control Area program to dispose of foreclosed properties acquired through the Federal Housing Administration.

As Congress weighs the various strengths and weaknesses of creating a new Resolution… more

Breaking Asset Poverty

Articles — Tue, 16 Sep 2008 08:50:00 -0400

In standard U.S. policy-speak, “poverty” is an income concept. The “poverty line” is an income measure, access to social programs is largely related to income, and when policymakers examine distributional effects of a policy, they turn to income quintiles.

Income, however, provides an incomplete picture of family well-being. Income measures a household’s flow of funds, but that flow can be interrupted. In his recent book High Wire, Peter Gosselin presents disturbing evidence that income volatility in the United States--measured by the percentage of households experiencing a 50-percent decline in income over any two-year period--has increased from 5 percent in the 1970s to 9 percent by 2006. This trend has… more

U.S. Savings Bonds: America’s Best Kept Savings Secret

Asset Building — Fri, 12 Sep 2008 13:49:00 -0400

Assets in the Workplace

Asset Building — Thu, 11 Sep 2008 07:11:00 -0400

Developing Sophisticated Financial Consumers

Asset Building — Wed, 10 Sep 2008 08:27:00 -0400

Ellen Seidman in American Banker | 'Preferred Exposure Fallout'

Communications — Tue, 09 Sep 2008 13:15:00 -0400

New America in the News:

Ellen Seidman, a former OTS director who is now the director of the New America Foundation's Financial Services and Education Project, said the agencies' options for helping banks whose capital levels are imperiled include requiring the suspension of dividend payments, working to restructure banks' balance sheets, and, "in extreme scenarios, engineering a merger."

She stressed, though, that current law gives banks and thrifts significant time "to raise capital or do whatever is necessary to get themselves back into position."
One challenge in determining the rescue's impact on preferred shareholders' capital is that many of the shareholders are privately held banks and thrifts that do not disclose their holdings. LINK (subscription required)

AutoSave Overview

Asset Building — Wed, 16 Jul 2008 11:00:00 -0400

The overview below revisits the proposal explored in a July 2006 Working Paper by Reid Cramer. Please click here to access that document, or see below for the updated overview. AutoSave Overview

AutoSave is a unique savings plan that automatically diverts through payroll deduction a small amount of post-tax wages into a savings account. AutoSave's design incorporates key factors that encourage saving, such as facilitation of automatic transfers to a savings account through an existing system (here, payroll deduction) and use of defaults that simplify and ease decision making, requiring employees to take action not to save. To participate, employers… more

Ellen Seidman in Final Call | 'America's Mortgage Crisis Worsens'

Communications — Thu, 10 Jul 2008 13:28:00 -0400

New America in the News:
..."The nation needs to face up to both the immediate and the structural changes that are needed to cushion the impact of the current crisis for homeowners, communities and the nation; to learn from the lessons of this crisis to improve our housing policy, especially by enhancing the supply of quality, well-located affordable rental housing; and to take the regulatory steps to prevent a similar wealth-stripping crisis from happening again," said Ellen Seidman, a former Clinton administration official who directs the Financial Services and Education Project at the New America Foundation... LINK

Ellen Seidman in BusinessWire | 'New Report Analyzes Housing Market Crisis & Federal Response'

Communications — Wed, 25 Jun 2008 09:07:00 -0400

New America in the News:
..."Demos's report is timely, cogent, readable and persuasive," said Ellen Seidman, a Clinton administration alum who currently directs the Financial Services and Education Project at the New America Foundation. "The nation needs to face up to both the immediate and the structural changes that are needed to cushion the impact of the current crisis for homeowners, communities and the nation; to learn from the lessons of this crisis to improve our housing policy, especially by enhancing the supply of quality, well-located affordable rental housing; and to take the regulatory steps to prevent a similar wealth-stripping crisis from happening again," she said. "As the report states, the legislation pending in Congress is a needed first step, but it is only the beginning..." LINK

Homeownership in a New Era

Asset Building — Tue, 03 Jun 2008 19:00:00 -0400

Making a Transaction and Savings Account a Certainty, Just Like Taxes

adminn — Thu, 22 May 2008 15:00:00 -0400

In the Feb. 20 issue of Paybefore Update, my colleague, Melissa Koide, discussed a proposal to use prepaid cards to deliver tax refunds through a unique alliance of government and industry, Viewpoints: A Convergence of Opportunities: Delivering Prepaid Accounts at Tax Time (February 2008). We believe the prepaid sector can and should play a major role in working with government to provide an "assets and transactions account" (ATA), a low-cost, high-value transaction account that facilitates savings for financially underserved consumers. The ATA would be opened when a tax filer's refund is deposited at a regulated financial institution… more