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Changes May Be Coming to Consumer Credit Reporting


Attack on FHA’s Insurance Fund Must be Stopped

On July 13, 2016, House Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following opening statement at a hearing with Housing and Urban Development Secretary Julian Castro about sudden policy changes the Secretary is making to the sale of nonperforming loans insured by the government:


There has probably been no greater public policy mistake in housing than Washington trying to put people into homes they cannot afford to keep. It was clearly the number one reason our nation suffered the number two worst financial crisis in our history. Not three weeks ago HUD announced after secret deliberations that it again wants to double down on these failed policies, AND breach its fiduciary duty to hardworking taxpayers while doing so. Specifically HUD has now announced what it describes as the “most significant” changes ever to the Distressed Asset Stabilization Program known as “DASP.”


DASP, as most Committee members know, is a program that allows a pool of delinquent mortgages headed for foreclosure to be sold competitively on the open market. This is done in order to minimize losses to the FHA’s Mutual Mortgage Insurance Fund, or “MMIF.”


Bidders are encouraged to work with borrowers to help bring the loan out of default. This is a challenge since the average loan in the pool has been in default for almost 2 ½ years and it has already been subject to numerous foreclosure mitigation measures.


After no notice, no public comment period, no public debate, and no transparency, HUD announced it will no longer maximize taxpayer recovery by selling these mortgages through an open and competitive bidding process.  Instead, it will offer lower priced “preferential bidding options” to non-profits and local governments, or, many of us believe more accurately, to known political allies.


Additionally, as part of HUD’s eleven specific changes to DASP, private purchasers will now be punished if they get stuck with a vacant property, thus assuring a decrease in private sector bidding.  As a result, taxpayer recoveries through the DASP will be reduced, further exacerbating the financial stresses placed on the FHA which, lest we forget, recently required a $1.7 billion taxpayer bailout. What we are witnessing is nothing less than the gradual transformation of FHA from the mutual insurance program designed to help low income, moderate income, and first time homebuyers, into a social program designed to help special interest groups.


Why has all of this happened? Well, we had a recent report, on April 12th, POLITICO published a story entitled “Progressive groups target Julián Castro.”  It stated, in part, “a coalition of [progressive groups]…are launching a preemptive strike against [Castro], aimed at disqualifying him from consideration to be Hillary Clinton’s running mate…attacking Castro on the relatively obscure issue of his handling of mortgage sales.”

Visa Teams Up with Marvel to Offer Financial Education through "Guardian" Comic Book

Public Library Association to make the "Guardians of the Galaxy: Rocket's Powerful Plan" comic book available to public libraries first


Visa Inc. and Marvel Custom Solutions have announced the release of a new educational comic book that teaches readers of all ages about personal finance. The new comic, Guardians of the Galaxy: Rocket's Powerful Plan, was released in conjunction with Free Comic Book Day. It combines Marvel's iconic super heroes with Visa's financial literacy expertise to introduce readers to fundamental money management concepts. Visa Inc. is also partnering with the Public Library Association (PLA) to make the new Marvel comic book available at public libraries nationwide.


"At Visa we believe that financial education is most effective when the public and private sectors work together," said Hugh Norton, Head of U.S. Financial Education, Visa Inc. "Our partnership with Marvel and the Public Library Association allows us to make financial education entertaining and engaging, while also offering educators a resource that introduces basic money management concepts to the classroom."


Guardians of the Galaxy: Rocket's Powerful Plan is available through Practical Money Skills for Life, a free, award-winning, teacher-tested and approved financial education program by Visa. The program was launched in 1995 and is now available in 16 languages across 42 countries.


"Working on this comic was a unique opportunity that enabled us to introduce core concepts about finance and savings using the Guardians of the Galaxy and Ant-Man in a fun, action-packed story," Darren Sanchez, Marvel Custom Solutions Editor, said.

How consumers’ credit data is reported, recorded, and used by credit reporting agencies could significantly change if a newly introduced bill by Rep. Maxine Waters (D-CA), that contains significant changes to the current credit reporting process, such as decreasing the time adverse credit information stays on a consumer’s credit reports to four years, and requiring the removal of paid and settled debts within 45 days, passes Congress. For more information, click here.

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Just a few weeks later, a story appeared in the very same publication entitled “Veepstakes: Julian Castro moves to shore up a potential weakness.”


The story goes on to say: “Julian Castro’s Housing and Urban Development Department announced significant changes Thursday to a federal program that sold delinquent mortgages to private investors — a move that mollified progressive critics who threatened to undermine his vice presidential prospects.”


Mr. Secretary, these clearly are disturbing reports to say the least and I hope and trust you will address them in your statement today.


To conclude, it is surely worth repeating that there is no better foreclosure mitigation program than a job with growing wages and a bright future. Also, a bankrupt FHA and a bankrupt America can help no one stay in their home, much less afford them an opportunity to buy one in the first place. This attack on FHA’s insurance fund must be stopped.

Secretary Julian Castro's Testimony

Great Lakes Banker is published by Michigan Banker LLC © 2016