The Wall Street Journal reports that Sen. Richard Shelby (R-Ala.), the leading Republican on the Senate Banking Committee, criticized the Treasury Department’s Elizabeth Warren on March 8 for driving a “regulatory shakedown” of the mortgage sector.
He referenced news pieces on the $30 billion fine on banks proposed by regulators and pointed to Warren as the leader behind the idea. The Obama administration is working toward a settlement among federal regulators, 50 state attorneys general and mortgage servicers related to foreclosure allegations, according to the New York Times. Negotiation insiders say Warren has been involved to an extent in the discussion.
Shelby claims the $30 billion would possibly go toward new housing programs backed by the administration but not Congress.
“This proposed settlement appears to be an attempt to advance the administration’s political agenda, rather than an effort to help homeowners who were harmed by a servicer’s actual conduct… Just last year, I warned that the new Bureau of Consumer Financial Protection would prove to be an unaccountable and unbridled bureaucracy,” he said, according the Wall Street Journal. “I did not expect to be proven correct so quickly.”
With regards to the foreclosure negotiations, Warren said in a recent interview that the Department of Justice had asked those involved to keep details of the discussions private. However, she added that the CFPB did not currently have jurisdiction over the issue.
State attorneys general and federal agencies last week produced a 27-page set of regulatory proposals that would change how mortgage servicers work with borrowers facing difficulties. Click here to read more about the new mortgage proposal.
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