WILLIAM ISAAC’S PUBLISHED WORK

Bill Isaac has authored hundreds of articles in top publications and has frequently testified before Congress.

RECENT PUBLISHED WORK

columns from William Isaac in top financial publications
Broken Promises to Fannie and Freddie Investors, by William M. Isaac published by American Banker on October 20, 2014 Posted: Oct 21, 2014

Earlier this month, D.C. District Court Judge Royce Lamberth threw out a lawsuit brought against the government by shareholders of Fannie Mae and Freddie Mac. Some critics of the housing giants have hailed Judge Lamberth’s finding against investors as a win for American taxpayers — but nothing could be further from the truth. The case has further shaken the confidence of investors who aren’t sure what to expect next from a government that has often acted unilaterally and unpredictably in dealing with the recent financial crisis.

In a stunningly misguided opinion, Judge Lambert dismissed the two core claims that had been brought by plaintiffs: first, that the Federal Housing Finance Agency was illegally taking profits from Fannie and Freddie shareholders; and second, that the siphoning of these profits was a violation of FHFA’s duty as conservator.

Here is the link to the full article

TIME FOR A NEW APPROACH TO ALTERNATIVE FINANCIAL SERVICES By William M. Isaac Posted: Oct 11, 2014

It’s an honor to deliver this keynote address at the annual meeting of the Financial Services Centers of America (“FiSCA”). FiSCA represents some 6,000 licensed financial service center locations nationwide and these centers provide a broad range of much-needed products and services including: check cashing, prepaid cards with savings options, electronic bill payment services, installment loans and payday loans, wire transfers, vehicle title loans, metro transit cards, tax preparation and filing services, money orders, ATM access, debit card loads and withdrawals, and car license plates and titles pickup. Clearly, the convenient access to these services you provide is hugely important to tens of millions of working Americans.

These have been difficult times for many of you, particularly in light of an extremely hostile government environment at the federal level. Bank regulators, and more recently the Department of Justice with its Operation Chokepoint, have been forcing out of the banking system many companies offering small dollar loans, check cashing, and other services vital to working people. Each week more of your companies engaged in lawful business activities are cut off from access to check clearing, deposit accounts, and other routine banking services required to keep any company in operation.  

Creating More Homeowners Without Building a Crisis By William M. Isaac and Edward Pinto, Published in the Wall Street Journal, October 3, 2014. Posted: Oct 4, 2014

Sales of existing homes in August were down 5.3% year-over-year. The housing lobby says credit is too tight. The commissioner of the Federal Housing Administration and the director of the Federal Housing Finance Agency (regulator of Fannie Mae and Freddie Mac ) have called for lenders to further loosen lending standards.

While the housing market needs a shot in the arm, the financial crisis in 2008 taught us the extreme danger that loose lending standards—poor underwriting, risky loans and government-backed credit expansion—pose to homeowners and the economy. We think there is another way.

ISAAC DELIVERS KEYNOTE ADDRESS AT ANNUAL MEETING OF SHAREHOLDERS OF FEDERAL HOME LOAN BANK OF INDIANAPOLIS (August 27, 2014) Posted: Aug 26, 2014

SOUND FINANCIAL REGULATION
ESSENTIAL TO SUSTAINABLE ECONOMIC GROWTH:
WE CAN ALL DO BETTER
By William M. Isaac*

I’m honored to be asked to address this annual meeting of the stakeholders of the Federal Home Loan Bank of Indianapolis.  I know you represent a broad array of financial institutions supporting housing needs and economic growth in the U.S.  I will focus my remarks to on the relationship between sound financial regulation and sustainable economic growth.  I might add that it has taken me 45 years to write this speech.

DOJ Memo Leaves No Doubt About Choke Point’s Motives, by William M. Isaac published by American Banker on July 18, 2014 Posted: Jul 18, 2014

Two House Committees – Financial Services and Judiciary – held hearings this week on the legislation intended to rein in Operation Choke Point. Implemented nearly two years ago by the Department of Justice in coordination with some bank regulators, Operation Choke Point denies essential banking services to companies engaged in lawful business activities that some government officials don’t like. I testified in favor of the bill, H.R. 4986, sponsored by Missouri Republican Blaine Luetkemeyer, at both hearings.

Operation Choke Point is a particularly egregious example of an unconstitutional abuse of power that ought to alarm and frighten each of us, irrespective of our ideology, party affiliation, or view of the particular products or services being cut off.

Here is the link to the full article

ISAAC TESTIFIES BEFORE HOUSE JUDICIARY COMMITTEE ON OPERATION CHOKE POINT Posted: Jul 17, 2014

[I was invited to testify on July 17, 2014 before a subcommittee of the House Judiciary Committee investigating Operation Choke Point, a highly controversial, not to mention un-Constitutional, program implemented about two years ago by the Department of Justice in collaboration with various other agencies. The program is designed to deprive essential banking services to lawful businesses that unelected government officials consider “undesirable” or “high risk.” My schedule did not allow me to testify in person at the hearing so I submitted the following statement for the record]:

Subcommittee on Regulatory Reform, Commercial and Antitrust Law,
Oversight Hearing on:

“Guilty until Proven Innocent? A Study of the Propriety & Legal Authority for the Justice Department’s Operation Choke Point”
July 17, 2014 at 9:30 a.m.

Subcommittee Chairman: The Honorable Spencer Bachus
Ranking Member: The Honorable Hank Johnson

TESTIMONY of WILLIAM M. ISAAC before the SUBCOMMITTEE ON FINANCIAL INSTITUTIONS AND CONSUMER CREDIT, July 15, 2014 Posted: Jul 16, 2014

TESTIMONY
of
WILLIAM M. ISAAC
SENIOR MANAGING DIRECTOR,
FTI CONSULTING, INC
FORMER CHAIRMAN,
FEDERAL DEPOSIT INSURANCE CORPORATION

before the
SUBCOMMITTEE ON FINANCIAL INSTITUTIONS
AND CONSUMER CREDIT

U.S. HOUSE OF REPRESENTATIVES
COMMITTEE ON FINANCIAL SERVICES
WASHINGTON, DC

July 15, 2014

Chairman Caputo, Ranking Member Meeks, and members of the Subcommittee, I am profoundly grateful that you are holding this hearing on “Operation Choke Point.” The opinions I express today are my own, and I do not purport to speak on behalf of my firm, FTI Consulting, Inc. In the interest of full disclosure, some of FTI’s clients have an interest in the matters before the Subcommittee today.

Congress needs to choke off Operation Choke Point, By William M. Isaac Published by The Hill newspaper, July 14, 2014 Posted: Jul 16, 2014

From small businesses on Main Street to the halls of Congress and the state legislatures, concern is mounting over Operation Choke Point, a coordinated effort among the Department of Justice (DOJ) and bank regulators to cut off banking services for a variety of legal, state-regulated businesses. This week alone, there are three congressional hearings on Operation Choke Point, hearings which will hopefully bring an end this misguided operation.

Operation Choke Point is one of the most dangerous programs I have experienced in my 45 years of service as a bank regulator, bank attorney and consultant, and bank board member. Operating without legal authority and guided by a political agenda, unelected officials at the DOJ are discouraging banks from providing basic banking services — deposit accounts, payments processing services, and payroll accounts – to lawful businesses simply because they don’t like them. Bankers are being cowed into submission by an oppressive regulatory regime.

Playing Semantic Games With Fannie and Freddie Investors By William M. Isaac Published by Wall Street Journal, July 7, 2014 Posted: Jul 8, 2014

For the past two years, the federal government has violated both the letter and the spirit of the law by illegally seizing the profits of Fannie Mae FNMA +0.50% and Freddie Mac.FMCC +0.51% Filings by the Obama administration in court and troubling public statements by its senior officials demonstrate a profound lack of adherence to the government’s duty as conservator of these government-supported mortgage institutions and to the rule of law.

In mid-May, Mel Watt, the head of the Federal Housing Finance Agency, signaled his personal apathy toward Fannie’s and Freddie’s private owners, saying in an interview for C-Span, “I don’t lay awake at night worrying about what’s fair to the shareholders.” If the government continues to denigrate and devalue shareholders, the economic consequences will be severe.

ISAAC DELIVERS KEYNOTE ADDRESS AT UNIVERSITY OF CHICAGO CONFERENCE ON CONTINENTAL ILLINOIS AND TOO BIG TO FAIL Posted: May 16, 2014

The Booth School of Business of the University of Chicago held a conference on May 14-15, 2014 to discuss and debate, thirty years after the failure of Continental Illinois Bank, whether we have solved the problem of too big to fail financial firms in the U.S. It was my honor to deliver the keynote address to the assembly, which I hope you will enjoy and find useful:

It’s a privilege for me to appear before this esteemed group assembled by the University of Chicago’s Booth School of Business and to deliver the keynote address. The conference poses the following question: “Thirty years after the failure of Continental Illinois Bank: Have we solved too big to fail?”

The wording of the question suggests that Continental Illinois did in fact fail before it goes on to ask if we have solved the problem of too big to fail. I understand the apparent confusion because we structured the resolution of Continental Illinois so that it would mirror as much as possible the consequences of a failure without creating uncontrollable shock waves that could threaten the global financial system.