Immelt Appointed Chairman of Council on Jobs and Competitiveness; Volcker Resigns
On Friday, President Obama announced that General Electric CEO Jeff Immelt will serve as Chairman of the newly created “Council on Jobs and Competitiveness.” The Council will advise the President on job creation policies and on the establishment of a long-term growth strategy. Immelt previously served on the board of the President’s Economic Recovery Advisory Board (PERAB). On Thursday, the President also announced the resignation of PERAB Chairman Paul Volcker and dissolution of the PERAB.
SEC Issues New Rules on Asset Backed Securities
On Thursday, the Securities and Exchange Commission (SEC) approved new regulations regarding asset-backed securities. Among a series of new rules which will take effect in 2012, one requires that financial firms that issue asset-backed securities assess and disclose the quality of the underlying assets, including mortgages, credit card debt and student loans. The rule, which the SEC first proposed in October, passed in a 3-2 vote. The agency’s two Republican commissioners, Kathleen Casey and Troy Paredes, opposed the changes. Another new rule requires that banks and other issuers disclose the number of requests they have received to buy back troubled assets. Starting in February 2012, the issuers will have to report how many loans they have repurchased, dating back three years.
Geithner Declines First House Republican TARP Hearing
On Wednesday, House Oversight and Government Reform Committee Chairman Darrell Issa invited Treasury Secretary Timothy Geithner to testify next week before the Committee regarding the Troubled Asset Relief Program (TARP). Geithner declined Issa’s invitation but offered to send in his place Tim Massad, an acting Assistant Treasury Secretary. While Issa could have issued Geithner a subpoena, he instead accepted the offer of Massad’s testimony for next week’s hearing.
House Republicans Target Consumer Protection Bureau
On Thursday, Rep. Randy Neugebauer (R-TX), who chairs an oversight panel of the House Financial Services Committee, sent a letter to Elizabeth Warren, head of the Consumer Financial Protection Bureau (CFPB), demanding details about how the agency will operate and expressing his doubts about the agency’s effectiveness. In his letter, Neugebauer also included a series of detailed questions for Warren about the Bureau including questions about the agency’s organization and Warren’s schedule. Neugebauer said he remains concerned about the agency’s ability to overreach and to over-regulate. Neugebauer’s letter represents the first specific query into the CFPB by the new House Republican majority. Neugebauer has said investigating the Dodd-Frank Act, which created the CFPB, is his top priority for the Subcommittee.
SEC Issues Fraud Charges Against West End Financial Advisors
On Friday, the SEC announced that employees of West End Financial Advisors LLC including William Landberg, Kevin Kramer, Steven Gould, and Janis Barsuk were being charged with fraud based on false positive returns and concealing fraudulent bank loans, cash flow problems and the misappropriation of investor assets. Landberg was arrested in June and charged with one count of securities fraud for misuse of loan funds. None of the other executives have been charged criminally in this case. In the criminal case, prosecutors are seeking forfeiture of about $4.76 million alleged to be the proceeds of the fraud.
If you have any questions regarding any of these issues, please contact:
Matt Jessee, Policy Advisor
1 314 259 2463