More Competition Is the Answer to Small-Dollar Credit Woes, by William M. Isaac published by American Banker on October 24, 2014
Posted: Oct 25, 2014
[ This is the first in a two-part series adapted from a keynote speech delivered at the annual meeting of the Financial Services Centers of America, a trade group representing nonbank financial services companies. ]
These are hard times for payday lenders and many other alternative financial services companies. Bank regulators as well as the Department of Justice’s Operation Chokepoint are forcing firms offering small-dollar loans, check cashing, money orders and other services vital to working Americans out of the banking system.
The industry’s struggles go way back. More than a decade ago, the Comptroller of the Currency decided to prohibit short-term lenders from distributing their loans through national banks.
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
WILLIAM M. ISAAC
SENIOR MANAGING DIRECTOR,
FTI CONSULTING, INC
FEDERAL DEPOSIT INSURANCE CORPORATION
SUBCOMMITTEE ON FINANCIAL INSTITUTIONS
AND CONSUMER CREDIT
U.S. HOUSE OF REPRESENTATIVES
COMMITTEE ON FINANCIAL SERVICES
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.