James Lockhart, head of the Federal Housing Finance Agency

The chief financial officer at Freddie Mac who died in an apparent suicide was a capable executive who had no involvement in any improper accounting, according to Freddie Mac's federal regulator.

"David (Kellermann) was a very conscientious and hard-working person and took, unfortunately, too much onto himself," James Lockhart, the director of the Federal Housing Finance Agency, told the Reuters Global Financial Regulation Summit in Washington.

Kellermann was found dead on April 22 in the basement of his Virginia home after having hung himself, local police sources said. Some news reports at the time tied Kellermann's death to ongoing federal investigations into Freddie Mac's accounting.

"You know, one of the things I find unfortunate? Some of the speculation about accounting issues at Freddie. They are very rigorous," Lockhart said. He described Kellermann as a "straight arrow" whose reputation was above reproach and said that the failings at Freddie Mac were widely shared.

Last September, federal regulators took over Fannie Mae and Freddie Mac as the the companies losses on the housing market mounted.

"Yes, we're seeing significant losses but from my standpoint and my chief accountant's standpoint, from the two auditing firms that were auditing them, from a loss reserving standpoint, they were following" proper accounting standards, Lockhart said.

Democratic lawmaker Carolyn Maloney

Tired of your mailbox being jammed with unsolicited credit card offers boasting too-good-to-be-true introductory rates and confusing terms in tiny print?

So is Carolyn Maloney. But as the chairman of Congress' Joint Economic Committee, Maloney can actually do something about it.

The New York Democrat is the chief sponsor of legislation she is calling the "Credit Cardholders' Bill of Rights." It would stop credit card issuers -- many of which have received generous taxpayer bailouts -- from imposing surprise interest rate hikes and hidden fees.

Speaking at the Reuters Global Financial Regulation Summit, Maloney said she expects the legislation to pass both the House and Senate, and to be signed into law by the end of May. That won't be a minute too soon for her.

"It's hard for me to go anywhere without (hearing) a credit card story," Maloney told the summit.

Constituents in her New York district stop her at the grocery store to complain about credit card issuers, she said. So do colleagues on the floor of the U.S. House of Representatives.

"They even tricked me by changing the due date," Maloney said, referring to one of the credit cards she uses. "All of a sudden I had a late fee because I had paid within the period I usually paid -- they changed it, they changed the terms."

Treasury Undersecretary Robert Steel told the Reuters Housing Summit that “progress is being made” as U.S. bond insurers seek recapitalization or other strategies to maintain their top “AAA” ratings.

New York state officials have been working with banks on rescue plans for several big bond insurers, which guarantee some $2.4 trillion of debt. The companies are facing big losses from insuring bonds linked to subprime mortgages and other risky assets.

So far, FGIC Corp. has said it wants to split into two companies, Ambac Financial Group is reportedly in discussions to raise some $2 billion of capital, and MBIA Inc. says it is looking at shifting its insurance operations into multiple subsidiaries under the current holding company.

Insurance companies are regulated by the states, not the federal government.

A Democratic proposal to spend billions of dollars to buy failing U.S. home loans to prevent foreclosures does “not seem to be the right tool for this task,” Treasury Undersecretary Robert Steel told the Reuters Housing Summit.

The proposal was floated recently by Christopher Dodd, a Connecticut Democrat who chairs the Senate Banking Committee. The plan is reminiscent of the Home Owners Loan Corporation founded by the government in 1934 to refinance homes during the Great Depression. Dodd said his proposal would buy troubled mortgages at current, discount prices and issue new loans to borrowers under more favorable terms.

Steel said that while the Bush administration is open to other ideas to help distressed borrowers stay in their homes, it first wants to evaluate efforts by the Hope Now alliance of mortgage lenders and servicers.

Treasury Undersecretary Robert Steel told the Reuters Housing Summit that “progress is being made” as U.S. bond insurers seek recapitalization or other strategies to maintain their top “AAA” ratings.

New York state officials have been working with banks on rescue plans for several big bond insurers, which guarantee some $2.4 trillion of debt. The companies are facing big losses from insuring bonds linked to subprime mortgages and other risky assets.

So far, FGIC Corp. has said it wants to split into two companies, Ambac Financial Group is reportedly in discussions to raise some $2 billion of capital, and MBIA Inc. says it is looking at shifting its insurance operations into multiple subsidiaries under the current holding company.

Insurance companies are regulated by the states.

     
    Michael Moore’s documentary “Sicko” is up for an Oscar award.
    But the controversial film about problems with U.S. healthcare gets a mixed review from Dr. Barry Straube, a physician who also happens to be the chief medical officer at the U.S. Centers for Medicare and Medicaid Services. 
    CMS runs the government health plans for tens of millions of people, mostly the elderly and low income.
    “I used to work at a health plan (insurance company) and I think that documentary had some gross exaggerations that were off the wall,” Straube told the annual Reuters Regulation Summit, when asked about the film. The doctor emphasized that he was speaking for himself and not the agency.
    But certain aspects of the movie did hit close to home for him.
    Straube, who specialized in nephrology and transplantation, said the documentary was correct in raising concerns about insurance companies looking for ways to remove high risk patients from their health plans.
    “Quite honestly, when I was at a health plan level I think people had processes (regarding high risk patients) that went further than they probably should,” Straube said.

  (Contributed by Ayesha Rascoe) 
   

Michigan Sen. Carl Levin, the Democrat who heads the U.S. Senate’s permanent subcommittee on investigations, says he hopes to get legislation passed soon that would ban the use of offshore tax havens used by American companies and investors to avoid paying an estimated $100 billion annually in taxes. ”They are using the Caymans in ways to avoid taxes and that is just totally unacceptable,” Levin told the annual Reuters Regulation Summit.

A top U.S. banking regulator told the annual Reuters Regulation Summit that he is not aware of any pending deals involving Washington Mutual Inc., the largest U.S. savings and loan.  John Reich, director of the Office of Thrift Supervision, also said he expected fewer mergers and acquisitions in the thrift industry in 2008.

Wall Street analysts say WaMu might be a takeover target after mortgage defaults and write-downs that led to a $1.87 billion fourth-quarter loss.

The U.S. Office of Thrift Supervision said it had “no formal enforcement action” pending against Countrywide Financial Corp. before the January announcement that Bank of America would buy the subprime mortgage lender. 

OTS Deputy Director Scott Polakoff, speaking at the annual Reuters Regulation Summit, responded to a question about Wall Street rumors last month that Countrywide was on the verge of seeking bankruptcy protection before the BoA deal was announced. 

The U.S. thrift industry was forced to write down loan losses and goodwill in the 2007 fourth quarter due to the subprime mortgage crisis, but the institutions remain fundamantally strong and will rebound in 2008, the head of the U.S. Office of Thrift Supervision told the Reuters Regulation Summit.

John Reich, whose agency supervises savings and loan institutions, said the current situation is vastly different from the thrift crisis of the late 1980s when many institutions were hit by commercial real estate problems. “Once we get past the credit quality issues, these institutions are basically profitable institutions,”  Reich said. More than 1,000 savings and loan institutions failed during the thrift crisis two decades ago, which was blamed in part on unsound commercial real estate lending.