[Senate Hearing 111-234]
[From the U.S. Government Publishing Office]
S. Hrg. 111-234
NOMINATIONS OF: PETER M. ROGOFF, FRANCISCO J. SANCHEZ, RAPHAEL W.
BOSTIC, SANDRA HENRIQUEZ, MERCEDES MARQUEZ, AND
MICHAEL S. BARR
=======================================================================
HEARING
before the
COMMITTEE ON
BANKING,HOUSING,AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
ON
nominations of:
Peter M. Rogoff, of Virginia, to be Federal Transit Administrator,
Department of Transportation
__________
Francisco J. Sanchez, of Florida, to be Under Secretary for
International Trade, Department of Commerce
__________
Raphael W. Bostic, of California, to be Assistant Secretary for Policy
Development and Research, Department of Housing and Urban Development
__________
Sandra Henriquez, of Massachusetts, to be Assistant Secretary for
Public and Indian Housing, Department of Housing and Urban Development
__________
Mercedes Marquez, of California, to be Assistant Secretary for
Community Planning and Development, Department of Housing and Urban
Development
__________
Michael S. Barr, of Michigan, to be Assistant Secretary for Financial
Institutions, Department of the Treasury
__________
WEDNESDAY, MAY 13, 2009
__________
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COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
CHRISTOPHER J. DODD, Connecticut, Chairman
TIM JOHNSON, South Dakota RICHARD C. SHELBY, Alabama
JACK REED, Rhode Island ROBERT F. BENNETT, Utah
CHARLES E. SCHUMER, New York JIM BUNNING, Kentucky
EVAN BAYH, Indiana MIKE CRAPO, Idaho
ROBERT MENENDEZ, New Jersey MEL MARTINEZ, Florida
DANIEL K. AKAKA, Hawaii BOB CORKER, Tennessee
SHERROD BROWN, Ohio JIM DeMINT, South Carolina
JON TESTER, Montana DAVID VITTER, Louisiana
HERB KOHL, Wisconsin MIKE JOHANNS, Nebraska
MARK R. WARNER, Virginia KAY BAILEY HUTCHISON, Texas
JEFF MERKLEY, Oregon
MICHAEL F. BENNET, Colorado
Edward Silverman, Staff Director
William D. Duhnke, Republican Staff Director
Mitch Warren, Senior Policy Advisor
Jonathan Miller, Professional Staff Member
Joe Hepp, Professional Staff Member
Neal Orringer, Professional Staff Member
Beth Cooper, Professional Staff Member
Bonnie Graves, FTA Fellow
Amy Widestrom, APSA Fellow
Mark Oesterle, Republican Chief Counsel
Hester Peirce, Republican Counsel
Shannon Hines, Republican Professional Staff Member
Dawn Ratliff, Chief Clerk
Devin Hartley, Hearing Clerk
Shelvin Simmons, IT Director
Jim Crowell, Editor
(ii)
C O N T E N T S
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WEDNESDAY, MAY 13, 2009
Page
Opening statement of Senator Reed................................ 1
Opening statements, comments, or prepared statements of:
Senator Shelby............................................... 7
Senator Bennett.............................................. 8
Senator Akaka................................................ 9
Senator Martinez............................................. 11
WITNESSES
Bill Nelson, U.S. Senator from the State of Florida.............. 2
Barney Frank, U.S. Representative from the State of Massachusetts 2
Adam B. Schiff, U.S. Representative fom the State of California.. 3
Patty Murray, U.S. Senator from the State of Washington.......... 4
NOMINEES
Peter M. Rogoff, of Virginia, to be Federal Transit
Administrator, Department of Transportation.................... 9
Prepared statement........................................... 31
Biographical sketch of nominee............................... 33
Response to written questions of:
Senator Dodd............................................. 96
Senator Shelby........................................... 96
Senator Bayh............................................. 99
Senator Warner........................................... 100
Francisco J. Sanchez, of Florida, to be Under Secretary for
International Trade, Department of Commerce.................... 12
Prepared statement........................................... 40
Biographical sketch of nominee............................... 41
Response to written questions of:
Senator Dodd............................................. 101
Senator Shelby........................................... 101
Senator Brown............................................ 103
Senator Crapo............................................ 104
Raphael W. Bostic, of California, to be Assistant Secretary for
Policy Development and Research, Department of Housing and
Urban Development.............................................. 13
Prepared statement........................................... 49
Biographical sketch of nominee............................... 51
Response to written questions of:
Senator Shelby........................................... 105
Sandra Henriquez, of Massachusetts, to be Assistant Secretary for
Public and Indian Housing, Department of Housing and Urban
Development.................................................... 15
Prepared statement........................................... 62
Biographical sketch of nominee............................... 63
Response to written questions of:
Senator Dodd............................................. 106
Senator Shelby........................................... 107
Mercedes Marquez, of California, to be Assistant Secretary for
Community Planning and Development, Department of Housing and
Urban Development.............................................. 16
Prepared statement........................................... 71
Biographical sketch of nominee............................... 73
Response to written questions of:
Senator Dodd............................................. 108
Senator Shelby........................................... 109
Michael S. Barr, of Michigan, to be Assistant Secretary for
Financial Institutions, Department of the Treasury............. 18
Prepared statement........................................... 83
Biographical sketch of nominee............................... 85
Response to written questions of:
Senator Shelby........................................... 112
Senator Kohl............................................. 114
Additional Material Supplied for the Record
Letter submitted by the Congressional Hispanic Caucus............ 116
Letter submitted by the Local Initiaives Support Corporation..... 117
Letter submitted by the Watt Companies........................... 118
Letter submitted by the Enterprise Community Partners, Inc....... 119
Letter submitted by the Los Angeles Business Council............. 120
Letter submitted by MacFarlane Partners.......................... 122
Letter submitted by the U.S. Conference of Mayors................ 124
Letter submitted by the California Community Foundaion........... 126
Letter submitted by McCormack Baron Salazar...................... 128
NOMINATIONS OF:
PETER M. ROGOFF, OF VIRGINIA,
TO BE FEDERAL TRANSIT ADMINISTRATOR,
DEPARTMENT OF TRANSPORTATION;
FRANCISCO J. SANCHEZ, OF FLORIDA,
TO BE UNDER SECRETARY FOR INTERNATIONAL TRADE,
DEPARTMENT OF COMMERCE;
RAPHAEL W. BOSTIC, OF CALIFORNIA,
TO BE ASSISTANT SECRETARY FOR POLICY DEVELOPMENT AND RESEARCH,
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT;
SANDRA HENRIQUEZ, OF MASSACHUSETTS,
TO BE ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING,
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT;
MERCEDES MARQUEZ, OF CALIFORNIA,
TO BE ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND DEVELOPMENT,
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT;
MICHAEL S. BARR, OF MICHIGAN,
TO BE ASSISTANT SECRETARY FOR FINANCIAL INSTITUTIONS,
DEPARTMENT OF THE TREASURY
----------
WEDNESDAY, MAY 13, 2009
U.S. Senate,
Committee on Banking, Housing, and Urban Affairs,
Washington, DC.
The Committee met at 2:06 p.m., in room SD-538, Dirksen
Senate Office Building, Senator Jack Reed, presiding.
OPENING STATEMENT OF SENATOR JACK REED
Senator Reed. The Committee will come to order.
We are meeting today in open session to consider the
nomination of six key nominees for the Obama administration. On
behalf of the Chairman, who is currently engaged on the Senate
floor working on the credit card legislation, I would like to
welcome my colleagues, distinguished guests, our nominees, and
their families and friends to this important hearing.
At this time I would like to recognize my colleague Senator
Bill Nelson, who wants to introduce Mr. Francisco Sanchez.
Senator Nelson.
STATEMENT OF BILL NELSON, U.S. SENATOR FROM THE STATE OF
FLORIDA
Senator Nelson. Thank you, Mr. Chairman.
Frank Sanchez has been a personal friend of mine for a
number of years, and he is up for something that he is uniquely
qualified, which is the Under Secretary of Commerce for
International Trade. He has had all kinds of experience in the
International Trade Administration as well as the Tourism
Policy Council, the National Intellectual Property Council. He
has been the Chief of Staff in the White House to the Special
Envoy to Latin America. He is a Florida native. He is an
accomplished negotiator. He has authored a book. He served our
former colleague Senator Bob Graham, when he was Governor, in
his administration as the first Director of the State's
Caribbean Basin Initiative, and he has been involved in
consulting companies on projects involving complex
transactions, labor-management negotiations, litigation
settlement, and negotiation strategy. And so this brings a
unique set of qualifications. He has even split the difference
in Florida. He attended the University of Florida, but he
graduated from Florida State. He does--for us Yale guys, we
will not hold it against him. He has a Master's degree from
Harvard from the Kennedy School, and he has worked with the
National Security Council, the State Department, the U.S. Trade
Representative.
You could not have a better candidate for this very
important job of Under Secretary of Commerce, and on top of
that, he is a good guy, and he is a personal friend of mine.
Thank you for letting me make these comments about him.
Senator Reed. Thank you, Senator Nelson.
Now let me recognize Congressman Barney Frank to introduce
Sandra Henriquez. And, by the way, Senator Kerry has a
something for the record, Ms. Henriquez.
STATEMENT OF BARNEY FRANK, U.S. REPRESENTATIVE FROM THE STATE
OF MASSACHUSETTS
Mr. Frank. Thank you, Mr. Chairman. I am very pleased to be
able to introduce Sandra Henriquez on her behalf, but more on
behalf of some of the most, I think, unfairly treated people in
this country, and those are the residents of public housing.
This country created public housing. You know, sometimes the
residents are criticized because of decisions that were made
not with their participation about what kind of housing they
should live in. And we know now, better than we used to, how to
build decent, livable, affordable housing, but we are still in
some cases, frankly, stuck with stuff that was not built well
in terms of social concerns.
Sandra Henriquez has run one of the largest housing
authorities in the country in the city of Boston. It is a
housing authority population that is diverse in terms of age,
in terms of ethnicity, and in terms of race. It has been a very
significant part of Boston for some time. It has been
historically a troubled institution. She has done an excellent
job, and I am very pleased that the President has selected
someone to run the Department of Public and Indian Housing who
has a demonstrated record of dealing with sensibly,
compassionately, and efficiently with the residents of public
housing.
I should note that part of her title is ``Indian Housing,''
and there were probably no people in America as a whole with
greater housing problems than the Native American population.
People who have been out, for instance, to the Navajo
reservation have seen a very serious problem.
I am very proud that in recent years on the Committee on
Financial Services, which is the corresponding Committee for
this Committee, we have worked hard and you, Mr. Chairman,
Senator Reed, have been a leader in this. We have been paying
attention to the needs of the Native American population in
housing, which has long been neglected.
So Sandra Henriquez is very well qualified. She is a
thoughtful, intelligent, compassionate, and successful
administrator. And I am very hopeful that she will be promptly
confirmed.
Now, I do understand there are different rules in the House
and the Senate, and I am prepared to learn that she was
confirmed on the proviso that she carry a concealed weapon. I
understand that the Senate might decide to add that, as they
have from time to time. That is not my decision to make. I can
only urge that this very, very able woman who has done such a
good job in administering public housing of Boston be
confirmed.
Senator Reed. Thank you, Chairman Frank.
Now I would like to recognize Congressman Schiff to make an
introduction of Raphael Bostic. Congressman.
STATEMENT OF ADAM B. SCHIFF, U.S. REPRESENTATIVE FROM THE STATE
OF CALIFORNIA
Mr. Schiff. Thank you, Mr. Chairman, Senator Reed, and
Ranking Member Shelby. I very much appreciate the opportunity
to appear before your Committee again, and thank you for
allowing me to introduce the President's nominee for Assistant
Secretary of the Office of Policy Development and Research of
the Department of Housing and Urban Development, Raphael
Bostic.
Dr. Bostic is a proud resident of Pasadena, and we share a
common bond as graduates of the same alma maters, Stanford and
Harvard, although Dr. Bostic unfortunately did it in the wrong
order, but he can be forgiven for that. He has dedicated his
career to understanding housing markets and the issue of
homeowner. He has extensively studied the sectors that will be
critical to our economic recovery, credit markets, and home
financing, and understands well how they affect the American
household.
His expertise in these most pressing and complex issues of
our time make Dr. Bostic an ideal candidate for this position.
As Assistant Secretary, he will be the principal adviser to the
Secretary on overall departmental policy and will be
responsible for maintaining current information on housing
needs, market conditions, and existing programs.
Dr. Bostic is currently a professor in USC's School of
Policy, Planning, and Development, and teaches courses in
affordable housing development, urban economics, real estate
finance, policy and planning analysis, and public finance. He
led a distinguished career prior to his years at USC, spending
6 years on the staff at the Federal Reserve Board of Governors
where he was awarded a Special Achievement Award for his work.
He also served as a Special Assistant to the Assistant
Secretary of Policy Development and Research at HUD, providing
him with crucial experience in the executive branch which will
no doubt serve him well in his new post.
His most recent research examines how mortgage finance
institutions such as Fannie Mae and Freddie Mac have influenced
the flow of mortgage credit through lenders that originate
high-cost or subprime loans through the Federal Housing
Administration Insurance Program. He has also studied the role
of the private label secondary market in facilitating the flow
of capital to subprime and possibly predatory loans.
His work has been published in a number of top peer-
reviewed journals, including Real Estate Economics, Housing
Policy Debate, and the Journal of Banking and Finance. Dr.
Bostic is an active contributor to numerous professional and
industry organizations and holds leadership positions in the
American Real Estate and Urban Economics Association, the
Association of Public Policy and Management, and recently
served on a National Academies Committee charged with
evaluating the research plan of the Department of Housing and
Urban Development.
Given his background, he was an ideal panelist for an
economic roundtable that I held in Pasadena nearly a year ago
after the collapse of IndyMac, which was headquartered in my
district. With a tightening credit market and increasing
foreclosures, residents in my district, as well as around the
country, were looking for answers and advice about how they
could stay afloat, and Dr. Bostic was and has been a clear and
well-informed voice during these difficult times.
Many Americans are still struggling with these questions
today, and I am confident that with Dr. Bostic advising the
Secretary on housing policy, the Department will make the right
policy decisions to help families around the country.
I urge the Committee to approve his nomination, and I thank
you again, Senator, for allowing me to appear today.
Senator Reed. Thank you very much, Congressman.
And now let me recognize Senator Patty Murray of Washington
State. Senator Murray.
STATEMENT OF PATTY MURRAY, U.S. SENATOR FROM THE STATE OF
WASHINGTON
Senator Murray. Well, thank you very much, Mr. Chairman and
Senator Shelby. I am very pleased to be here today to have the
opportunity to introduce Peter Rogoff as the President's
nominee to be the next Administrator of the Federal Transit
Administration. I do want to welcome Peter's wife, Dena Morris,
who is here with us, as well as their two children, Lucy and
Niles, who are behaving very well behind you, Peter. Don't
worry.
Peter and his wife are no strangers to public service, and
I really want to thank them personally for both of their
commitment and congratulate them on all they have accomplished.
And I would just tell Lucy and Niles that I understand that
confirmation hearings actually get you extra credit in school,
so thank you for being here.
For members of the Senate Appropriations Committee, Peter
is a very familiar face. He has served on the Appropriations
Committee staff now for the last 22 years, and he has been the
Committee's senior transportation adviser for the majority of
those years. For the past 9 years, as I have served as either
Chairman or Ranking Member of the Transportation Appropriations
Subcommittee, I have had the opportunity to work very closely
with Peter. He has been a trust adviser to me and a dedicated
public servant to the constituents of both my home State of
Washington and those of every member of the Subcommittee. I
know that Peter's drive and knowledge and experience will be an
outstanding asset to President Obama and Secretary LaHood's
team.
Peter and I have worked together through many challenges
over the years, none greater than the events of September 11th
and the transportation security issues that we were confronted
with after that. As members of this Committee know well, those
efforts were not just limited to aviation security, but they
also included initiatives to strengthen security in passenger
rail transit systems and our ports and all the systems that
connect them.
During those very difficult times, Peter's understanding of
our transportation safety systems was fully evident. It is a
knowledge that comes with experience, and not just the kind of
experience you get from studying policy at your desk, although
Peter does do a lot of that, but it is the kind of experience
you get from traveling out to accident sites, talking with
inspectors, meeting with families, and working hands-on to
ensure that we are taking steps to ensure that accidents are
not repeated.
In the time that I have worked with Peter, he has regularly
traveled across the country to participate in aviation, rail,
and ship inspections, and he has voluntarily gone to many
accident sites. The expertise gained from those experiences has
served this Congress and this country well in some very
critical situations. In fact, I still remember--and I know
Peter does as well--an evening just about 2 years ago when we
all watched in horror as the I-35 bridge collapsed in
Minneapolis. Immediately after that tragedy, I dispatched Peter
to accompany Senator Klobuchar to the scene because I knew that
he could help her identify the core issues and how the Federal
Government could help.
Now, I know that as FTA Administrator, people would face a
set of wide-ranging challenges, but I also know that he has the
transit know-how to hit the ground running. From my work with
Peter, I know that he believes in the larger agenda to expand
transit ridership and reduce greenhouse gas emissions. I know
that he understands how important it is to move projects
forward rapidly in a manner that is efficient and productive.
And I know that he has the experience to address our biggest
challenge--transportation finance.
As all of you know, the outlook for the Highway Trust Fund
and its mass transit account is truly dismal. These financing
challenges threaten to undermine all that Congress and the
President hope to accomplish for our State and our communities.
To this central problem, Peter Rogoff will bring over two
decades of working knowledge on financing transit and
transportation projects of all kinds.
So, Mr. Chairman, while his nomination represents a very
big loss for our Appropriations Committee and my Appropriations
Subcommittee, I respect and I commend President Obama's
decision to put Peter's expertise to work on addressing our
country's transit future. It is without any reservation that I
commend to you the nomination of Peter Rogoff to be our next
Federal Transit Administrator.
All of us that care about public transportation, a clean
environment, and the mobility needs of our neediest citizens
are going to be very proud to have Peter Rogoff in this
position.
Thank you very much, Mr. Chairman.
Senator Reed. Thank you very much, Senator Murray.
Let me make brief comments about the nominee before I
recognize Senator Shelby for his opening comments, and there
may be other colleagues that will join us for introductions,
and I will try to work them in as rapidly as possible.
First, beginning with Peter Rogoff, the President's nominee
to lead the Federal Transit Administration, we all recognize
that strong Federal leadership in transportation is one of the
keys to getting our economy back on track. Now, a bold, new
commitment to public transportation is needed to reduce
congestion on our roads, to address climate change, and to
reduce our dependence on foreign oil. And let me say I second
with enthusiasm all of the commendations that Senator Murray
made, and thank you, as a member of the Appropriations
Committee, for your assistance and help, Peter, and we look
forward to your service on the Federal Transit Administration.
Our next nominee is Mr. Francisco ``Frank'' Sanchez.
Senator Nelson described your stellar career, Mr. Sanchez. You
have been nominated for Under Secretary of Commerce for
International Trade. As Under Secretary, the role will play a
particularly critical aspect in reviving America's struggling
economy. One out of every 10 American jobs depends on exports,
which in 2008 generated $1.8 trillion in U.S. business revenue.
So this is an extremely important job to match your public
service and your talents.
We also have three nominees for the Department of Housing
and Urban Development who are before us today. Like never
before, we need an engaged, aggressive, and well-run Department
of Housing and Urban Development with leadership that is
confident in its mission and unafraid to act. As President
Obama has himself said, ``HUD's role has never been more
important.''
Our first HUD nominee is Mr. Raphael Bostic, who was
introduced by Congressman Schiff. He has been nominated to be
the Assistant Secretary for the Office of Policy Development
and Research. Mr. Bostic in such a role would be responsible
for maintaining current information on housing needs, market
conditions, and existing programs, as well as conducting
research on priority housing and community development issues.
Our next nominee is Ms. Sandra Henriquez, who was
introduced by Congressman Frank. She has been nominated to be
the Assistant Secretary for Public and Indian Housing. In
fiscal year 2009, this office will be expected to administer
nearly $24 billion in targeted housing assistance programs
serving low, very low, and extremely low income families and
individuals. These include public housing and Section 8 tenant-
based rental assistance programs, which serve over 3 million
families, seniors, and persons with disabilities. These housing
programs are carried out by approximately 1,600 staff in
headquarters and field positions throughout the country. This
is an extraordinarily important and influential post.
Our final HUD nominee is Ms. Mercedes Marquez, who has been
nominated to be Assistant Secretary for Community Planning and
Development. This division administers nearly $8 billion in
community, economic, and affordable housing development
programs in the fiscal year 2009 budget. In addition, it
currently administers $6 billion in neighborhood stabilization
program funding, helping communities buy and rehabilitate
abandoned and foreclosed properties. These programs are carried
out by approximately 800 staff in headquarters and field
positions.
Our final nominee today will be Michael Barr, who has been
nominated to be the Assistant Secretary for financial
Institutions at the Department of Treasury. In this position,
Mr. Barr will be responsible for working on administration
policy regarding the regulation of banks, credit unions,
Government-sponsored enterprises, consumer protection,
community reinvestment, Federal deposit insurance, and
terrorism risk insurance. Quite a portfolio. He will be
uniquely situated to work with this Committee to achieve its
goals of modernizing the United States financial institutions,
a task that I know the Chairman and Senator Shelby are
undertaking at this moment.
Mr. Barr is highly qualified for this position. He
currently is teaching at the University of Michigan. Previously
he served as Treasury Secretary Robert Rubin's Special
Assistant as well as Special Adviser to President Clinton. Mr.
Barr also served as a law clerk to U.S. Supreme Court Justice
David H. Souter and then-District Court Judge Pierre N. Leval
of the Southern District of New York. Mr. Barr received his
J.D. from Yale Law School; a Master of Philosophy in
International Relations from Magdalen College, Oxford
University; as a Rhodes Scholar; and his B.A. summa curriculum
laude with honors in history from Yale University.
Again, let me welcome all the nominees, and you will have
an opportunity when you are recognized to also introduce your
families.
Now let me turn to the Ranking Member, Senator Shelby, for
his statement. Senator Shelby.
STATEMENT OF SENATOR RICHARD C. SHELBY
Senator Shelby. Thank you, Mr. Chairman.
First of all, I want to welcome all of the nominees. I am
sure you have been well vetted and are eminently qualified and
ready to go to work. And I hope that Senator Dodd, our
Chairman, will move these nominees as soon as possible.
I want to say a special word here about Peter Rogoff. A lot
has been said about him, but I had the opportunity to work with
him for a long time on the Appropriations Committee. As we used
to say, we worked for Peter.
[Laughter.]
Senator Shelby. And we did not mind that because he had
great work skills, great leadership skills, and, Peter, we are
happy that the President has seen fit to nominate you to this
very important position at the Department of Transportation.
We look forward to this year working on the Banking
Committee. As you well know, we have a piece of the surface
transportation, transit, and other things, and you will bring a
lot of knowledge to this position, and I believe you will bring
a lot of integrity, too. So I look forward to supporting you
especially and supporting all of you as soon as we can.
If you will forgive me, Senator Dodd and I are holding--we
are trying to move a credit card bill on the floor, and so I
will leave it up to you, but I will support your nomination.
Senator Reed. Thank you very much.
We have been informed that Senator Martinez would very much
like to be here, Mr. Sanchez, and when he arrives, we will
recognize him to say a few words. I think also Congressman
Becerra would like to say a few words, Ms. Marquez, and when he
arrives, we will also recognize him.
But, first, I have an obligation to perform. If you would
please stand, and I will administer and oath, and simply
respond, ``I do,'' after each phrase. Please raise your right
hands. Do you swear or affirm that the testimony you are about
to give is the truth, the whole truth, and nothing but the
truth, so help you God?
Mr. Rogoff. I do.
Mr. Sanchez. I do.
Mr. Bostic. I do.
Ms. Henriquez. I do.
Ms. Marquez. I do.
Mr. Barr. I do.
Senator Reed. Do you agree to appear and testify before any
duly constituted Committee of the Senate?
Mr. Rogoff. I do.
Mr. Sanchez. I do.
Mr. Bostic. I do.
Ms. Henriquez. I do.
Ms. Marquez. I do.
Mr. Barr. I do.
Senator Reed. Thank you very much. Please be seated.
Now let me recognize--do you have any comments? Yes, let me
recognize Senator Bennett. Please.
STATEMENT OF SENATOR ROBERT F. BENNETT
Senator Bennett. Thank you, Mr. Chairman. I do not want to
prolong this, and I would love to say something good about all
the rest of you, but I do not know any of you yet.
[Laughter.]
Senator Bennett. That does not usually stop Senators, but I
think under these circumstances it will. But I want to again
add to the chorus of comment and praise for Peter Rogoff and
the work that he has done as a member of the Appropriations
Committee.
Peter, I know you have been to Utah. You understand the
transit issues in Utah, and we look forward to working with
you. But I did not want to let this occasion go by without
adding my voice to those that are saying we are sorry to lose
you, but good luck and all the best in your new assignment.
Thank you.
Senator Reed. Thank you, Senator Bennett.
Senator Akaka, would you like to say something at this
time?
STATEMENT OF SENATOR DANIEL K. AKAKA
Senator Akaka. Mr. Chairman, thank you for having this
hearing. As you said, we are trying to move as quickly as we
can to confirm people so that we can all get back to work and
begin to do some things for our country. And so I look forward
to this hearing, Mr. Chairman, and I am glad to participate
with you.
Thank you.
Senator Reed. Thank you very much, Senator Akaka.
Let me now review Mr. Rogoff. Again, Mr. Rogoff, if you
would like to introduce your family or friends that are here,
please take this opportunity, and then your statement. Could
you please turn on your microphone, Peter?
Mr. Rogoff. I would like to introduce them, and thank you,
Senator Bennett and Senator Reed, for your kind comments.
I would like to introduce my wife, Dena Morris; my son,
Niles Rogoff; and my daughter, Lucille Rogoff. And I especially
want to recognize the person who really makes everything that
the four of us do possible--our outstanding nanny and great
friend, Murlene Dowling.
STATEMENT OF PETER M. ROGOFF, OF VIRGINIA, TO BE FEDERAL
TRANSIT ADMINISTRATOR, DEPARTMENT OF TRANSPORTATION
Mr. Rogoff. Senator Reed, Ranking Member Shelby, Senator
Bennett, and members of the Committee, I want to thank you for
allowing me this opportunity to present myself as President
Obama's nominee to head the Federal Transit Administration.
Having served on the staff of a Senate Committee for 22 years,
I know that the confirmation process is one of the most
critically important constitutional responsibilities of the
Senate, so I come to this hearing with humility and a great
respect for the process.
As I appear before you today, I believe public
transportation faces both remarkable opportunities and serious
challenges. The opportunities begin with the fact that we have
a President who recognizes the central importance of our
transit systems to our quality of life and to the quality of
our environment. He has spoken of the need to invest adequately
and invest efficiently, and he has stressed repeatedly the role
that public transportation must play in reducing pollution,
including greenhouse gas emissions, and moving toward energy
independence by diminishing our reliance on foreign oil.
In addition, the American people are creating opportunities
by utilizing transit services in record numbers and by
demanding more. Transit ridership rose to a modern record in
2008, more than 10 billion trips. What may be more remarkable
is that ridership has remained high even as record gas prices
have dropped back down.
Many families have sold their second car, or their only
car, either as a matter of convenience or to cope with the
economic downturn. Many other Americans, weary of sitting in
traffic jams, have just boarded the train or boarded buses
using designated bus lanes.
Finally, there are great opportunities because the
administration and Congress are about to rewrite all our
surface transportation programs, as Senator Shelby pointed out.
In fact, the upcoming authorization process presents an
opportunity like no other to retool our public transportation
programs and refocus them on our most critical national goals.
But as this Committee is well aware, we also face
extraordinary challenges. First and foremost is the task of
financing our efforts to achieve these goals. The mass transit
account of the Federal Highway Trust Fund is on a path to
insolvency. While the transit account is in less immediate
danger than the larger highway account, the balances in both
are falling at a rate that will undermine their ability to
support current obligations.
The financing challenge calls for tough choices, so it is
all the more important that we fulfill President Obama's
commitment to spend every transit dollar efficiently and on the
worthiest projects.
Against this backdrop of both challenges and opportunities,
I am especially honored that President Obama has nominated me
to serve as his Federal Transit Administrator. I very much look
forward to working with this Committee, with Secretary LaHood
and his outstanding team, to both tackle the pressing
challenges and capitalize on the extraordinary opportunities.
As I mentioned, the financing dilemma is difficult, but
with more than two decades of experience on the Appropriations
Committee staff specializing in transportation finance, I feel
confident that I could help the Secretary and this Committee
identify a more stable and sustainable funding regime.
Secretary LaHood has made clear his intention to eliminate
the stovepipes within DOT. I think that is something that
people have been trying to do since Senator Bennett served in
the DOT. He will be asking his agency leaders to work toward a
seamless system that moves people and freight efficiently
between modes of transportation, and I believe I can help.
My experience in infrastructure investment programs goes
well beyond mass transit. It includes highway, aviation, inner-
city rail, and maritime programs. If we are going to succeed in
developing truly seamless networks, then expanded cooperation
and joint investments are going to be key.
Secretary LaHood and HUD Secretary Donovan are committed to
fostering livable and sustainable communities through the
coordinated efforts of their Departments, and let me just point
out how apt I think it is that I am testifying with a number of
HUD nominees, because there really is quite a lot of overlap in
the challenges we are trying to address.
For the last 4 years, I have had the joint responsibility
overseeing both the Transportation and HUD budgets for the
Appropriations Committee. Knowing the HUD budget as I do, and
witnessing Secretary Donovan's impressive efforts to transform
HUD, I am particularly enthusiastic about working with him and
Secretary LaHood to promote sustainability.
Finally, I want to welcome the opportunity to be this
administration's advocate for mass transit. I plan to be a very
public advocate in my visits with policymakers in communities
across the Nation. But just as importantly, I plan to be a
forceful advocate in the less public debates that go on within
the administration. We must create new and better transit
options in both urban and rural America, but especially during
a period of economic uncertainty and recovery, a pro-transit
agenda must include protecting and improving transit services
for those for whom mass transit is the only option.
If confirmed, this Committee can count on me to be a strong
and vocal partner in advancing this agenda. I thank you again
for this opportunity and the kind words of the members of the
Committee. I look forward to answering any questions you may
have.
Senator Reed. Thank you, Mr. Rogoff.
Senator Martinez has arrived, with perfect timing, to say a
few introductory words about Mr. Sanchez. Senator Martinez.
STATEMENT OF SENATOR MEL MARTINEZ
Senator Martinez. Thank you, Senator Reed. I appreciate
that very, very much.
I want to take a moment--and I know Senator Nelson was here
earlier--to introduce to the Committee Frank Sanchez, a
wonderful Floridian, a man who has exercised a great deal of
leadership in the area of trade, not only nationally but also
in the State of Florida, and also a proud alumni of Florida
State University, for which I am very proud to share that with
him.
But in addition to his fine academic record, which I know
Senator Nelson probably described, I find Mr. Sanchez to be
someone who is going to make an excellent trade person for our
country because of his past work not only in the private sector
but also in Government. He had a great deal to do with
negotiated the Open Skies Agreement, which was approved during
the Clinton administration, which is so important to our
Nation's airlines and to others around the world. And it is
about trading with others. At the end of the day, that can
create so much prosperity for our country.
So I have had the opportunity to talk with Frank about his
commitment and his understanding of the importance of trade as
we go forward in so many of these areas that are today
pending--Colombia, Panama, and other issues that you know so
well.
So, Mr. Chairman, I just wanted to add my endorsement and
my introduction, and I look forward to a swift confirmation of
Mr. Sanchez, a great Floridian.
Senator Reed. Thank you very much, Senator Martinez--
another great Floridian, truly. Thank you.
Mr. Sanchez, if you would like to introduce family and
friends, please do so, and then we would be eager to hear your
statement.
Mr. Sanchez. Thank you, Senator Reed. I wish to introduce
my cousin, Kim Sanchez, who has the awesome responsibility of
representing the entire Sanchez clan today.
[Laughter.]
STATEMENT OF FRANCISCO J. SANCHEZ, OF FLORIDA, TO BE UNDER
SECRETARY FOR INTERNATIONAL TRADE, DEPARTMENT OF COMMERCE
Mr. Sanchez. It truly is an honor to be before you today
with this distinguished panel, and I should say I hope that
some of the good feelings that Mr. Rogoff has engendered with
this Committee will be able to rub off on me.
I want to thank Senator Martinez and Senator Nelson both
for making a special effort to be here and to introduce me.
Thank you very, very much.
I would respectfully ask the Committee that my full
statement be submitted for the record.
There is no greater call than that of service to one's
country, and I am truly honored by President Obama's nomination
of me to serve as Under Secretary of Commerce for International
Trade. I am humbled by the trust that President Obama and
Secretary Locke are placing in me, and I am cognizant of the
serious responsibilities that accompany this confidence.
If confirmed, I look forward to working for them and with
you in advancing our Nation's economic well-being and ensuring
that all Americans benefit from fair and free trade.
I would like to take just one moment to take someone who is
not here--actually, two--my mother and my late father for their
support and encouragement. I would not be here if it were not
for their consistent and constant love and commitment to my
success, so I want to thank them.
As Secretary Locke has said, the role of the Department of
Commerce is to be the engine of innovation, of job growth, and
of economic renewal. The International Trade Administration
supports these efforts by strengthening the competitiveness of
U.S. industry, promoting trade and investment, and ensuring
fair trade in compliance with our trade laws and agreements.
This mission is critical to enhancing America's global
competitiveness and expanding commercial opportunities for
American manufacturers and service workers throughout the
world.
When U.S. business seeks to promote their goods and
services in overseas markets, it is the International Trade
Administration's programs that lead the way. In short, the
agency helps America's firms and workers navigate through the
often complicated and unpredictable waters of foreign trade.
If confirmed, I look forward to working closely with this
Committee to support American innovation and entrepreneurship
and open global markets for American-made goods and services.
In so doing, we can play a vital role in creating new jobs and
economic growth here at home.
I thank you for your consideration.
Senator Reed. Thank you very much, Mr. Sanchez.
Mr. Bostic, again, if you have family or friends, feel free
to introduce them, and then your statement.
Mr. Bostic. Sure. I would like to introduce my parents, my
mother and father, Viola and Raphael, who are here; as well as
my sister, Ebony, who is making her own sacrifice as she is
letting me use one of her rooms as my base as I am here in
Washington. So thank you, Ebony.
I would also like to acknowledge two people who were unable
to be here: my partner, Jeff Taylor, who is back in California;
and my aunt, Patricia Williams, who is in New York.
STATEMENT OF RAPHAEL W. BOSTIC, OF CALIFORNIA, TO BE ASSISTANT
SECRETARY FOR POLICY DEVELOPMENT AND RESEARCH, DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT
Mr. Bostic. Chairman Reed and members of the Committee, I
am honored and humbled to appear before you today as you
consider my nomination to serve as the Assistant Secretary for
Policy Development and Research at the U.S. Department of
Housing and Urban Development. Before going further, in
addition to my family, I would like to acknowledge a few others
who have been instrumental in my life, particularly mentors
Glenn Canner, John Shoven, Roger Noll, Susan Wachter, and
Stuart Gabriel.
The time we find ourselves in is remarkable, both because
of its gravity and its origins. By many measures the economy
has not performed so poorly since the Great Depression of the
1930s, and for perhaps the first time in the Nation's history,
housing has been at the root of this macroeconomic trouble.
This reality means that a deep understanding of housing markets
is critical, and evidence on what does and does not work in
these markets will be essential for creating a new market
structure that endures and correct the weaknesses that help to
create the current troubles.
Secretary Donovan recognizes this and, in his public and
private statements, has already placed a considerable emphasis
on the importance of collecting and using data to make informed
decisions. If confirmed to my position, I will work hard to see
the Secretary's vision is pursued and achieved. In this way, I
hope to contribute to a transformation of the Department into
an efficient, informed leader of policy on issues associated
with housing and urban development.
My background, including significant work in academics,
Government, and community development, provides me with assets
that will allow me to help the Office of Policy Development and
Research increase its efficacy and effectiveness. A key goal is
for PD&R efforts to contribute to a deeper and more meaningful
understanding of the issues facing our housing and urban
markets and communities.
From an academic perspective, my research has given me
knowledge and insights about both housing and urban
development, and this, coupled with my continued and intensive
interaction with other academics scholars will allow me to
promote the implementation of evidence-based policy with the
Secretary and the Department's program offices. In addition, my
training and perspectives gained as an academic researcher have
given me skills that will help ensure that research and program
evaluations produced or funded by PD&R are relevant, timely,
and of the highest quality.
Through my career to date, I have interacted extensively
with all the key HUD constituencies, and so I am able to add
value and perspective to HUD's research efforts, as well as its
policymaking and oversight. I understand housing and housing
finance through my research and my work at the Federal Reserve
Board. I know the nuts and bolts of affordable housing
development as well as the difficulties and opportunities it
affords for lower-income and minority households through my
teaching them at USC, service as a board member of a local
nonprofit housing developer, and my research.
My work with a local community development organization in
East Palo Alto and other research I have done have provided
insights as to the challenges of broad-based urban and
community development. My role as Director of a real estate
development program required my engagement of all aspects of
the development process and forced me to engage and understand
how design, law, economics, finance and construction all
interact. Of particular significance, the exposure to
construction highlighted the key role that engineering that
technology can play in helping to make housing affordable and
high quality.
One of Secretary Donovan's top priorities is to improve the
culture of the Department as an institution, and I pledge to
further this goal for PD&R. This transformation will require
significant organizational management, and my experiences at
USC over the past several years have prepared me for this
challenge. I aim to provide an environment that allows PD&R to
perform and produce at high levels as I believe the office has
tremendous potential that has lagged in terms of its
productivity and prominence.
Finally, I come to you today with a clear understanding of
the opportunities and obstacles that this position presents.
Through my work at the Federal Reserve Board and HUD, I have
seen how policy is created at the Federal level and am familiar
with the dynamics associated with operating at PD&R. This
knowledge base will facilitate my navigation of the
policymaking milieu and should lead to effective decisionmaking
and promotion of ideas that will benefit the American people.
In conclusion, I am very excited to serve the country at
this pivotal moment in its history. I am eager to support the
Secretary's efforts and work with the members of the Committee
to help heal the Nation's housing markets and promote the
flourishing of its urban areas.
Thank you for giving me the opportunity to speak with you
today, and I welcome any questions you might have.
Senator Reed. Thank you, Mr. Bostic.
And now Ms. Henriquez.
Ms. Henriquez. Thank you, Senator Reed. I would like to
introduce--with me today are my father, Howard Brooks; my
brother, Bruce; my daughter, Sandra Elena; my son, Carlos; and
a colleague from the Housing Authority, DaVonne Bolton. My
other son remains in Boston, but I am certain that he is
watching this proceeding, as are my colleagues at the Housing
Authority.
STATEMENT OF SANDRA HENRIQUEZ, OF MASSACHUSETTS, TO BE
ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, DEPARTMENT
OF HOUSING AND URBAN DEVELOPMENT
Ms. Henriquez. Thank you, Mr. Chairman and Senator Shelby
and distinguished members of the Committee, for considering my
nomination and the opportunity to appear before you this
afternoon. I am truly honored and humbled to have had Secretary
Donovan recommend that President Obama nominate me as the
Assistant Secretary for Public and Indian Housing. I want to
thank Congressman Frank for introducing me here today and for
Senator Kerry's written statement for the record.
The most significant portion of my more than 30-year career
has been in real estate property management of affordable
housing, both the private and the public sectors of the
industry. I quickly turned to residential real estate because I
was more interested in the people who lived there than the
commercial side. I believe that housing is a right and that the
provision of safe, decent, well-cared-for housing for low and
very low income families and individuals lays the foundation to
change lives. If a family's shelter is secure, then that
household can begin to work on other aspects of their lives
that many of us take for granted, such as child care, getting a
job, finding a better one, education for themselves or for
their children.
For the past 13 years, I have been the Administrator and
the Chief Executive Officer of the Boston Housing Authority. As
the largest single landlord in the city of Boston and one of
the largest public housing authorities in the Nation, the BHA
provides 11,500 public housing units and 13,000 rental
assistance subsidies together housing 10 percent of the city's
population. With an 850-person workforce and program budgets
exceeding $280 million annually, I have led an outstanding team
to reform the housing authority from mere troubled status to
that of high performer in its public housing and in its Section
8 portfolio.
Following real estate industry practices and policies, the
BHA moved to asset management models before Congress and HUD
required it. We embraced the basics, and vacancy rates dropped
from 15 percent to 2 to 3 percent across the portfolio. Non-
emergency work order completion times dropped from 120 days to
15, and they continue to fall, and rent collections are up.
At the same time, we moved from being labeled by HUD as
``systemically discriminatory'' to a national model of fair
housing. We partnered with sister city agencies, local
community development corporations, and other nonprofit housing
providers. To increase the production of affordable rental
housing, we created housing strategies and programs to house
the homeless, and we introduced green principles into our
business practices and into our building maintenance and
construction operations.
The Boston Housing Authority has used the HOPE VI program
to redevelop three properties, with a fourth just beginning. In
addition, we created 62 new first-time homebuyers, none of whom
are in default or foreclosure. We have used mixed financing to
develop two other properties, and when redevelopment is taken
all together, they total almost $1 billion. For every Federal
or State dollar, we leveraged $8 more.
We have used Energy Performance Contracting to retrofit
many of our outdated heating plants, making them state-of-the-
art, more efficient, less costly to operate, and creating
better living environments for our residents. In addition, we
have used available HUD programs to use a portion of our
ongoing capital allocation to leverage bond financing, to
expand ongoing improvements to the physical plant. Coupled with
the recent American Recovery and Reinvestment Act funding, this
totals more than $110 million.
My housing experience has taught me that, regardless of the
price point, maintaining and improving properties is essential
to those who live there. Preservation and improvement of the
1.2 million units of public housing stock, the creation of more
affordable rental housing, as well as the continued ability to
support families and individuals through rental assistance is
essential to realizing the dream of millions of our citizens.
Secretary Shaun Donovan's commitment to accountability and
transparency and his leadership at HUD provides us with the
opportunity to do our best work on behalf of those who benefit
from HUD's programs. If I am confirmed, I will be focused on
and committed to learning more about Native American housing as
well as public housing. I am grateful that President Obama has
nominated me, and I want to thank each of you this afternoon
for your consideration of my nomination. If confirmed, I look
forward to serving the Nation, especially those who live and
work in public and Native American housing.
Thank you.
Senator Reed. Thank you very much.
Ms. Marquez. Good afternoon. There are many friends here
today, and I thank them for traveling so very far, including
from as far away as Hawaii today. But I also want to take the
opportunity to introduce my partner of 21 years, Mirta Ocana.
Senator Reed. Hello.
STATEMENT OF MERCEDES MARQUEZ, OF CALIFORNIA, TO BE ASSISTANT
SECRETARY FOR COMMUNITY PLANNING AND DEVELOPMENT, DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT
Ms. Marquez. It is my pleasure to be here before you today,
Mr. Chairman, members of the Committee. I am honored to have
been nominated by President Obama to be the Assistant Secretary
for Community Planning and Development. I also want to thank
Secretary Donovan for giving me the opportunity to join an
excellent team of professionals dedicated to ensure quality
housing for every American.
I started my career as a civil rights litigator. I have
represented folks in matters involving substandard housing
conditions, classic fair housing cases, and Federal class
actions relating to community gentrification and discrimination
in public housing. Through this work, I learned the value of
decent, safe, and affordable housing within the context of a
healthy neighborhood.
After a dozen years of litigation, I was appointed by
President Clinton to the U.S. Department of Housing and Urban
Development, first as the Deputy General Counsel for Civil
Rights and Fair Housing, and later as Senior Counsel to
Secretary Andrew Cuomo.
At HUD, I helped craft what the Secretary referred to as
HUD's ``justice agenda.'' This required us to reach across
divisions, to assemble and lead cross-departmental teams. For
example, to examine the possible discriminatory use of CDBG
dollars, we put together a team from Community Planning and
Development, Fair Housing, and the Office of General Counsel.
Through this work, I learned the intricacies of the funding
programs which fall within the purview of Community Planning
and Development. While most of my work centered on urban
communities, I also was privileged to work in rural areas. My
work included the design of HUD's first Rural Housing and
Economic Development NOFAs, work in the ``colonias,'' and the
launch of the Self-Help Housing Program on the Pine Ridge
Reservation in South Dakota.
This work touched me personally. I am the granddaughter of
farm workers, and I have spent a considerable amount of my time
visiting family in the San Joaquin Valley of California. It was
my honor to give something back.
After my experience at HUD, I went back home to Los Angeles
to practice housing and community development. As Vice
President of McCormack Baron Salazar, one of the country's most
successful private affordable housing developers, I spent 3
years taking affordable housing deals from concept to the final
securing of financing. I have spent the last 5 years as the
general manager of the Los Angeles Housing Development. The
agent had a longstanding reputation for antiquated thinking,
inadequate infrastructure, and the lack of transparency. Within
my first year, we achieved a top-to-bottom assessment and
called in all of the stakeholders, always seeking to become
public sector entrepreneurs, building momentum while working
with the market instead of lagging behind it.
We also initiated Project Clean House, an effort that
identified the 50 most underperforming deals and brought the
developers in to meet with us. We were able to get the majority
of the deals back on track and completed. As for the rest, over
a 2-year period we recaptured or de-obligated, either
voluntarily or through judicial proceedings, over $50 million
and put every penny back into the financing of affordable
housing. And we were able through that effort to launch the
city's Permanent Supportive Housing Program.
In partnership with lenders, philanthropy, and the
Enterprise Community Partners, we successfully implemented the
New Generation Fund, a $100 million acquisition capital fund.
This fund works to provide acquisition pre-development and get
financing to affordable housing developers in a transparent and
competitive system.
Now our biggest challenge is the current economic and
housing crisis. Los Angeles has experienced over 24,000
foreclosures in the last nine quarters. We addressed the
foreclosure crisis in thoughtful and innovative ways. Early on,
we invested in data. Los Angeles is 469 square miles in size,
and our investment in and development of GIS maps gave us the
information we needed to understand the true nature of our
problem and where to expend the $32.8 million Los Angeles
received from NSP 1. We identified distinct neighborhoods where
we could also achieve other goals, like transit-oriented
development and the preservation of affordable housing in
multi-family units. Restore Neighborhoods LA, a nonprofit we
set up to acquire and dispose of vacant properties, is already
up and running and making purchases.
As a practitioner, I have learned and worked with HUD's
rules, and I know that they do not often take into account that
one size does not fit all. If confirmed, I commit to bring a
disciplined focus to CPD and will work to ensure
accountability, transparency, expertise, and flexibility that
support the efforts of local government to achieve meaningful
community development.
It would be an honor to serve.
Thank you for your attention, and I look forward to any
questions you may have.
Senator Reed. Thank you very much.
Mr. Barr, please.
STATEMENT OF MICHAEL S. BARR, OF MICHIGAN, TO BE ASSISTANT
SECRETARY FOR FINANCIAL INSTITUTIONS, DEPARTMENT OF THE
TREASURY
Mr. Barr. Thank you very much, Senator Reed and
distinguished members of the Committee. It is my honor to
appear before you today as the nominee for the position of
Assistant Secretary of the Treasury for Financial Institutions.
With me today are my wife, Hannah Smotrich; behind me, my
children Avital, Dani, and Etai; my Mom, Deborah Barr; my
sisters, Karen and Lisa; my uncle Gabe and my cousin Jake.
[Laughter.]
Mr. Barr. My wife's parents, David and Bunny Smotrich; and
family and friends who have known me my whole life. I am just--
--
Senator Martinez. Are you Cuban, by any chance?
[Laughter.]
Mr. Barr. They are all representing the rest of the Sanchez
family.
Mr. Barr. I am sure my Dad, David Barr, is here with us in
spirit as well, and I would not be here today before you
without their love and their support. I am enormously indebted
to them for the sacrifices they are making on behalf of me, and
I hope the country.
My parents taught me the centrality of public service. My
Mom is still a high school English teacher here in Washington,
DC, gives her all to her students every day. My Dad was a labor
lawyer who represented hard-working Americans for his whole
life. And I am humbled by their experiences and by the faith
that President Obama and Secretary Geithner have placed in me
during these extraordinary times.
The President and the Secretary have moved aggressively to
stabilize our economy and our financial markets, to provide
relief to struggling homeowners and strength to our mortgage
finance system. The administration has put in place initiatives
to help small business, consumers, and students and to restore
the healthy functioning of financial markets.
While we address the current crisis, the President and the
Secretary are committed to fundamental reform to reduce the
likelihood of crises in the future and to contain such crises
if they occur. The current financial crisis has revealed
significant weaknesses and glaring inconsistencies in our
system of financial regulation.
If confirmed, I look forward to working closely with you to
take the necessary steps to reform our financial system and to
restore honesty and integrity to our financial system. We need
a comprehensive and effective system of prudential supervision
and effective measures to reduce systemic risk. We need clear
accountability and full transparency. We must ensure that we
put in place robust protections for consumers and investors
with strong and uniform enforcement. We must ensure that our
financial system is inclusive, and fair. And we must have a
system that evolves over time to keep up with the pace of
financial innovation domestically and globally. With the right
changes in place, we can expect our financial system once again
to be vibrant and strong.
I come before you having had the privilege of working on
financial issues for a long number of years. Currently, as a
professor of law at the University of Michigan Law School,
where I teach financial institution Republican and
international financial regulation, my research involved
research on financial policy and financial regulation, and most
recently involves extensive empirical research on the needs and
behaviors of consumers in our financial services system. My
work focuses on ways in which a deeper understanding of how
people think and behave based on real-world research can better
inform public policy rather than relying solely on abstract
models of interaction.
Prior to joining academics, I served in senior positions in
the Government--at the Treasury Department for 6 years, at OMB,
at the State Department, and as a judicial clerk. And I would
say that these positions gave me the opportunity to work with
many of you and your staffs, to contribute to the work
involving changing our financial system, and to gain the
experience to know that an open mind and honest dialog lead to
better policy judgments.
I am hopeful that my experiences to date will serve the
Department well if I am confirmed, and I am even more hopeful
about the future of our Nation. If confirmed, I look forward to
working together with you to lay the foundation for a sound
recovery and a strong economic future.
Thank you very much.
Senator Reed. Well, thank you very much, Mr. Barr.
What I would like to do is take 7-minute rounds and make
allowances for a second round if there are additional
questions, and I presume there will be.
Let me begin by asking Mr. Rogoff, the New Starts process,
there has been criticism about it, the fact that it takes a
very long time to get the process off the ground. There are
many desirable projects that just do not seem to be able to
make it into the mix. That is one dimension. And the other
dimension I would like you to comment on is the tension between
funding New Starts projects and continued improvement and
expansion of existing projects. And if you could just generally
comment, I would appreciate it.
Mr. Rogoff. Well, I would certainly agree with some of the
criticism that has been leveled against the extraordinary time
delays that have encumbered a number of the new New Start
projects. It is a situation that I do not really know anyone
either in industry or who works around this process that is at
all content with it.
I have strong views that I think there are ways to
streamline it. I think it is one of the first and most
important exercises that I would like to go through, if
confirmed, and if I do not launch such an initiative myself, I
am kind of hoping that Secretary LaHood will order me to do it
just to bring it the high-level visibility that I think it
needs.
The reality is the longer these approval processes take,
the more expensive these projects get. And inevitably that
means within a fixed-dollar amount of limited funds that we are
going to be able to put into these projects over the next
several years, that means we are buying fewer projects. We are
buying fewer, more expensive projects, having taken a year, 2
years, 3 years longer than we perhaps should have to approve
them. Now, no one wants to bypass any of the laws and
regulations that apply to these approvals, but there has got to
be a faster way to get them through the process.
As it relates to funding, New Start projects, as compared
to--I think what you are asking is sort of keeping up the
maintenance on existing infrastructure.
Senator Reed. And expanding.
Mr. Rogoff. Yes. It is difficult in that we have just had,
as a result of a report actually that Senator Durbin ordered
through the appropriations process, really quite a wake-up call
in a report that showed that we are looking at something along
the lines of a $50 billion backlog in deferred maintenance,
really necessary maintenance on a number of our major rail
systems across the country, including the MBTA up in your
region of the country. And some of these deferred maintenance
issues really quickly become safety issues if you do not attend
to them. And I think this Committee as well as the FTA and the
administration really need to carefully balance how much they
want to commit to building new projects versus seeing to it
that the existing systems are actually adequately attaining--
you know, adequately attending to their core maintenance needs.
It is hard when you think about the local political
situation. It is a lot easier to kind of generation enthusiasm,
perhaps generate an incremental tax, generate money out of the
legislature when you have got a lot of people excited about a
new service. It is a lot harder to cobble together the money to
actually do adequate maintenance, so I think that is a careful
balance we need to look at.
Senator Reed. Thank you, Mr. Rogoff. I have a question of
everybody, but let me move to Mr. Bostic.
Mr. Bostic, I note that in your resume you were an
independent director for IndyMac MBS, Inc., and IndyMac ABS,
Inc. And as we all well know, the failure of an affiliated
company, IndyMac Bank, caused severe repercussions; in fact, it
was alluded to by Congressman Schiff.
If you could explain exactly what your role was with these
entities, whether you were engaged in any of the activities of
the bank, with their underwriting or their marketing, et
cetera. What precisely were you doing as an independent
director for these affiliated entities?
Mr. Bostic. To answer that question, I should start by just
describing the relationship between IndyMac, the Bank, and its
affiliates that I was on the board of.
IndyMac Bank was a bank, they took deposits, they made
loans. And one of their strategies was to fund those loans by
accessing the liquidity from the secondary market. As you may
be aware, there are a bunch of processes that you have to go
through to get to actually get a pool to the secondary market
and the affiliates, MBS and ABS, were charged with working
through that process to get those pools to be made available on
the secondary market.
My role as an independent contractor was to oversee the
activities of those affiliates and make sure that the processes
were done appropriately, in conformity with SEC rules and
regulations and those sorts of aspects of the infrastructure.
At no time was I charged or did I have the authority or the
responsibility to do underwriting, to review the decisions of
how to pool these securities, the deal structure. I was largely
a board member just overseeing this process. So it was
relatively detached from the actual underwriting
decisionmaking.
Senator Reed. Thank you very much.
Mr. Sanchez, let me ask you a question. Basically, you will
be the chief officer in our Government that is policing the
anti-dumping and the dumping issues that face us, and I wonder
if you could give us sort of a sense of how you might approach
that, a very important challenge.
Mr. Sanchez. Thank you, Senator Reed.
In my role as Under Secretary of Commerce, I have two
important responsibilities, promoting exports and, second,
ensuring that we have created a level playing field for
American business as it seeks to do business around the world.
I consider it one of the most important tools that we have,
to vigorously enforce our trade laws as well as our trade
agreements. And it will be my intention to do that, to enforce
them to our utmost ability, to work with USTR to make sure that
we are doing everything to make sure that American business can
remain competitive.
If confirmed, I look forward to working with you and this
Committee to make sure we are doing just that.
Senator Reed. Well, thank you very much. I will reserve my
questions for the second round and recognize Senator Martinez.
Senator Martinez. Thank you, Senator Reed.
I wanted just to make a general comment. All of you are
coming to do things for this Nation that you love, and I want
to just commend all of you for doing so. And I want to also
express a word of families and friends and supporters and
partners and others that are behind you and support you in your
efforts. I think it is terribly important.
I can just think back 8 years ago when I was sitting at the
same table where you sit today, before I had the honor to be
Secretary of HUD. So I want to just make that general comment.
I have a couple of questions to each of you and I will try
to go quickly about that.
Mr. Rogoff, I wanted to ask you about the transit issue in
terms of financing and funding. I come from a State where we
have little to none and are having a very difficult time
getting projects off the ground. We just had a tremendous
failure in Central Florida you may be aware of.
What do you think are the answers? And how do you feel
about private financing of major projects that might use a
different model than what we traditionally have used? You know,
I have been involved in a project for a light rail program in
Orange County, Florida. It failed because we could not really
come up with a local match. This one failed because the State
of Florida could not do its part.
This model is broken. How do you think we can get it done?
Because mass transit is something that has to be part of the
future of Florida.
Mr. Rogoff. Well, that is correct, and especially in
growing States like Florida that continue to grow and continue
to have a density of elderly. It becomes all the more important
with the aging of the population.
As I said in my opening statement, our core mechanism for
financing these programs, the Transit Account of the Highway
Trust Fund, is on its way toward bankruptcy. There are some
measures taken in the President's budget for 2010 to try to
forestall that, but the bottom line is we need to develop some
new financing mechanisms.
We have had two commissions that have looked at this, both
authorized in the SAFETEA-LU bill. I think what is most notable
about them is that both commissions, while coming up with
different recommendations, all agreed that we need a mix of
solutions, that we are not going to have a single silver bullet
mechanism, if you will, to revolutionize transportation
finance.
And private-public partnerships needs to be part of that.
The challenge in doing private financing for certain transit
projects is we need to get--what often interests the private
sector in being a participant is being able to capture some
kind of revenue stream for payback. Transit projects generally
need an operating subsidy to continue to operate and therefore
there is not sort of a natural mechanism, a natural funding
stream to capture.
But there have been some innovative mechanisms used out
there. I think the one thing that really all of the committees
that are going to participate in the authorization process--
this committee, the Public Works Committee, the Commerce
Committee--need to focus on is some of the most innovative
ideas are coming from the States and localities themselves.
That we need to open our ears to some of the things that are
being successful out there, and try to give State and local
decisionmakers maximum options.
My only concern about the private-public partnership model
is when you get into some pure privatizations where transit
assets, if you will, are sold. And some of the funding from
those assets do not necessarily redound to transportation
benefits. And I think that is a point where we need to draw a
line.
But clearly, we have had some successful projects out there
and we need to foster them.
Senator Martinez. Well, keep an open mind on Florida. We
desperately need transit and I hope we can find a way to make
it happen.
Mr. Rogoff. Absolutely. The recent activities in
Tallahassee were unfortunate, I agree, and Orlando.
Senator Martinez. It was, very unfortunate.
Mr. Sanchez, I just wanted to make sure that I get on the
record I know what your thoughts are on trade. I am very keen
on the Colombia Free Trade Agreement. I think it is terribly
important for our exports. This is a market where we will gain
jobs by trading with Colombia on a free trade basis, and I
wanted to know your thoughts on that agreement and the
Panamanian one, as well.
Mr. Sanchez. Well, I know that President Obama recently
said that we have to be very careful that we do not send
signals of protectionism, particularly during these economic
times.
I know that the U.S. Trade Representative, Ron Kirk, is
working with our good partner and ally, Colombia, as well as
Panama to work out any concerns or issues that may still exist.
As you know, I am not yet working for the Administration,
so I have not been involved in those discussions. But I am
confident that the U.S. Trade Representative, with support from
the Department of Commerce, will be able to work through issues
with Colombia and Panama. And I am hopeful that some time in
the future we will be bringing those agreements to Congress.
Senator Martinez. Well, Secretary Gutierrez, who I happen
to have seen today and whom I know you know, was a huge
advocate for the trade agenda. I hope you will pick up that
mantle, along with Representative Kirk, who is I know going to
do a great job as USTR. But I hope you will join with him.
I know the Secretary is also a very committed pro-trade
person, has a great record in his State when he was Governor,
along those lines. I think it is terribly important that we
move the agenda forward. I think it is very important for our
political relationship with Latin America, as you well know,
that we address that issue as soon as possible.
Mr. Sanchez. I agree, Senator. As Senator Reed said, one in
10 jobs in the United States come from our exports. And in
Secretary Locke's home State, by some estimates, it is one in
three. So you are absolutely right, that it is an important
engine of job creation in our country.
Senator Martinez. I want to just congratulate all of you
HUD people, and welcome you to the HUD family, if I may be so
presumptuous. I know, Ms. Henriquez, I think our paths crossed
when you were in Boston and I was in HUD, and I know what a
great job you are doing there.
I also have to tell you that the whole public housing arena
is challenged. Not all of them work as smoothly as yours. There
are some terrific examples around the country of well run--
Atlanta comes to mind, many others. But then there are also
some really, really disastrous situations. And I hope that you
will use your firm but gentle hand to make sure that we move
that situation to a better place.
As you said, every American ought to have a decent place to
live, and not every American in public housing does. So I
really hope you will take seriously that challenge.
Ms. Henriquez. I will, and I do. Thank you.
Senator Martinez. Ms. Marquez, I also commend you for your
passion about housing for all and equality. I did a lot in the
``colonias.'' Maybe not enough, because I do not know how much
would ever be done to be enough. But I promise you, it was an
area that I took a great deal of interest in.
There is so much of the agenda that I could discuss with
each of you, but I just--in the interest of time--I hope that
you will look at some of the things we did in the ``colonias.''
I hope that they are still there to be followed up on and
pursued and advanced.
There is no constituency, I used to say, for the
``colonias.'' You do not get any votes. You do not win any
medals. Nobody really knows or cares what you are doing. But
you have to only visit it once to realize that no Americans
should live in the conditions that some of the people in the
``colonias'' are living. And so I hope you will continue to see
if there is a way, through CPD dollars, that you can address
some of those issues.
You know, they do not qualify exactly as such. We were
creative in ways of finding ways to help. And I hope you will
be equally creative with them.
That is not a question really, but if you have a comment I
would love to hear from you.
Ms. Marquez. It is difficult when you approach the
``colonias'' and you find that HUD has one standard for a sewer
hookup and USDA's Rural Housing has another, and they are about
six feet apart from another.
Senator Martinez. And there is not enough money for either
one.
[Laughter.]
Ms. Marquez. That is right. I promise you I will do my very
best.
Senator Martinez. Thank you. There is so much--CPD, you
know, it is the lifeblood of so many cities. And today, in
these difficult times that we are facing, municipalities all
over the country are looking to you for the leadership that has
to come out of HUD for so many community projects that are
vital, particularly now that we are trying to put people to
work and everything else.
Mr. Bostic, I am not sure I ever understood fully what all
of you people do over there in the research area.
[Laughter.]
Senator Martinez. So I will just wish you well and do good
things.
[Laughter.]
Senator Martinez. I mean no disrespect there.
Thank you, gentleman. Mr. Barr, also, congratulations to
you. I wish you well in your job. You have a huge challenge
ahead of you and I look forward to working with you through the
work of this Committee.
Thank you.
Senator Reed. Thank you, Senator. Now we know and can see
why you were such a successful secretary.
[Laughter.]
Senator Reed. Your insight and
Senator Martinez. Good people.
Senator Reed. ----good people, and inspiring leadership.
Senator Martinez. That is right.
Senator Reed. Thank you.
Senator Akaka.
Senator Akaka. Thank you very much, Mr. Chairman.
Mr. Rogoff, due to your work on the Senate Transportation
Appropriations Committee, you are probably aware of many things
throughout the country, including Hawaii.
Mr. Rogoff. Yes, sir.
Senator Akaka. And in particular, the city and county of
Honolulu and its efforts to construct a rail transit system. It
was good for us to hear that you will be the man in transit for
this Administration. We certainly look to you for improving the
system and looking forward to working with you.
The local contributions toward the project in Honolulu will
likely be 70 percent of the project costs. But it will still
need significant Federal support. This project is coming to a
very critical phase of development in Hawaii, in Honolulu, and
will require the regular attention of the FTA. Can you offer
some assurance that the FTA will devote the appropriate time
and attention to the rail transit project in Honolulu?
Mr. Rogoff. I certainly could, Senator. I have toured the
corridor of this project. I have met with Mayor Hannemann on
more than two occasions to discuss it. And I agree with you
that we are now reaching a make or break point on the Honolulu
project.
I, unfortunately, along with a former colleague of mine,
Pat McCann, were serving at the Subcommittee when the city
council reversed itself and undid the project in the 1990's and
we went through the very unfortunately exercise of reallocating
funds already appropriated to Honolulu to other cities.
We must not let that happen again. And you have my
assurance, both in working with the people in Region 9 as well
as within headquarters to make sure that everyone is talking to
each other clearly in terms of what needs to be done to move
this project forward.
Senator Akaka. Thank you very much for your response.
Mr. Barr, among those families who make up the bottom 20
percent of earners, one in four does not have a transaction
account, according to the Federal Reserve's survey of consumer
finances. These families are those who can least afford to pay
the high cost of fringe financial services and I know we share
an interest in helping to increase access to mainstream
financial institutions. I have valued your scholarship on the
unbanked and look forward to working with you to help increase
access to mainstream financial institutions.
My simple question to you is what must be done to bank the
unbanked?
Mr. Barr. Thank you very much, Senator Akaka, for your kind
words. As you know, I have been working on issues facing low-
income households in the financial system for a long time. It
is an area of deep concern for me in my scholarship, in my
policy work. And it is an area that I would look forward to
continuing to work with you on if confirmed for this position.
I think there are a large number of efforts we can make to
help bring more people into the financial services system if we
focus on their actual needs and start with what people need
from their banks, what they need from their financial
institutions, rather than determining from the top down, the
current structure of the financial system.
So I would very much look forward to working with you on
this important issue.
Senator Akaka. I look forward to that, too.
Ms. Henriquez, as you know, in Native American communities,
affordable housing development on Trust lands requires unique
and innovative approaches. Programs authorized by the Native
American Housing Assistance and Self Determination Act, what we
call NAHASDA, have been vital to increasing access to
affordable housing.
Hawaii's Department of Hawaiian Home Lands is the largest
affordable housing developer in our State and has effectively
utilized and leveraged Federal resources. Hawaii's housing
costs are the highest, as you know, in the country and
homelessness is too prevalent.
I encourage you to come to Hawaii and see the work being
done by DHHL and meet with DHHL's leadership and homestead
residents, who would welcome you.
My question to you is will you work with me in an attempt
to meet the specific housing needs of Native Hawaiians?
Ms. Henriquez. First of all, thank you very much for your
kind offer and I would look forward to visiting you in Hawaii.
[Laughter.]
Ms. Henriquez. Let the record show.
But quite seriously, I would look forward to working with
you, Senator. I think that we have got to figure out what is
working and what is not working and then how to leverage as
much as possible the tools that we have got in front of us.
I understand that there are high costs of living in Hawaii.
I just recently met with the Director of the Hawaii Housing
Authority and learned a lot from him and understand the
disparity between what is seen by the tourists and the actual
living conditions for a number of people who live on the
Island.
So I look forward to working with you and members of your
staff to try and figure out ways to leverage as many dollars as
possible.
Senator Akaka. Thank you very much for your response.
Ms. Marquez, in addition to serving on this Committee, I am
Chairman of the Veterans' Affairs Committee and we have been
working to improve VA services for homeless veterans. Since
veterans are approximately one-third of the homeless
population, what must be done to ensure that veterans are
provided access to assistance and support services to help them
find and retain housing?
Ms. Marquez. Thank you for the question, Senator. It is,
indeed, a tragedy, the statistics that you cite.
My sense of that, in Los Angeles we have begun to work on
that through our permanent supportive housing program. We
actually give an incentive for developers to come and build for
veterans, for homeless veterans.
I think what we have to do is put together a leverage, a
matrix so to speak, between our CDBG dollars, the new dollars
from Homeless Prevention and Rapid Re-Housing, and even layer
them on top of NSP dollars. It is very expensive to build
permanent supportive housing for anyone that has a great need
and ultimately we have to leverage both the capital and the
operating dollars.
And so I actually look forward to working with my
colleague, Sandy, here because it is going to be together that
we work out the final financing to allow permanent supportive
housing to go forward. It has always been a problem. The two
systems do not speak together well about capital and operating.
And that is what I would intend to do.
Senator Akaka. Thank you very much. My time has expired but
I want to wish all of you well and the team that you will be
part of will certainly help our country, without question. So I
wish you well and welcome to your families and friends, and
also your supporters out there.
Thank you.
Senator Reed. Thank you very much, Senator Akaka.
Let me direct the same question really to Ms. Henriquez and
Ms. Marquez. I am just pleased you have emphasized already
teamwork, but you have unique perspectives. You have worked
within the Agency and you have worked outside of it. As you go
in, what do you think your most significant challenges are, the
top three let's say, from your perspective looking at what HUD
has done and can do better and having been there, in some
cases, and tried your best.
Ms. Henriquez.
Ms. Henriquez. Thank you, Senator.
From my perspective, I think the top three challenges would
be one, to make sure that we are communicating, the issue about
accountability, transparency, top down, bottom up, so that we
can make sure that our programs are effective, we are
communicating effectively both to folks who we regulate,
housing authorities and our other partners, but also make sure
that we hear from those partners about how to be as effective
as possible.
I think getting real-time data and using that data to drive
decisions is really important so that we are not always
wondering what should be included, what is not in the number,
how the number works, and how indeed those resources are
applied across the Nation.
I do think, as well, getting our arms around the capital
needs study to inform decisions, particularly around the public
housing portfolio, is essential. I know that that work is going
on now and I look forward to learning more about how we can use
tried and true programs that make some sense and that have been
productive and helpful and how we can either replicate those or
expand upon those to be more efficient and to produce greater
affordable housing across the country.
Senator Reed. Thank you.
Ms. Marquez.
Ms. Marquez. Thank you, sir.
I think going in the top three things to look at within CPD
are clearly the distribution of stimulus dollars, how they are
being spent, making sure that that is effective, efficient, and
creating jobs.
Second, it would be the distribution of NSP 2, the
competition, which now will focus on need in a different way.
And having the technical assistance competition done so that we
have the expertise around the country to ensure that
communities of all sizes and of all types of economies are
using these dollars and leveraging as much as possible.
I would say, third, those are immediate. But the things
that absolutely have to be looked at now are some integration
of disaster relief work and funding. I am looking forward to
digging in.
In Los Angeles we have disasters. They are called
earthquakes. In my city, when we had the Northridge earthquake,
it was my agency that was responsible for the long-term
financing of over 20,000 houses and bringing them back on line.
So I have spent a lot of time thinking about it, worried that
the big one is coming, and planning for that.
So those would be the top three things that I would worry
about. And then the difficulty always is we are going to have
to work across lines. There can be no division. The problems
are too deep.
Senator Reed. I noticed Dr. Bostic was making lots of
notes, which is a good sign because you are already working
across divisions.
[Laughter.]
Senator Reed. But if you have a comment, Dr. Bostic, about
how you can help them.
[Laughter.]
Mr. Bostic. It is very unusual to hear program people talk
about doing studies and taking data and all that stuff. I get
excited so I start writing things down.
[Laughter.]
Mr. Bostic. I guess one of my real objectives of PD&R is to
improve the data interface and the availability of data from
the Department to serve our external constituency. So there are
a lot of local community groups who do not really have the
capacity to do their own data collection, data analysis. And I
am hopeful that, in working with my two colleagues, we can
really change and transform their ability to understand what is
going on in their own communities so that we collectively can
build programs that really do improve people's quality of life.
The Secretary, I should say, has lifted up data as one of
his priorities. So this is really a good opportunity. I think
we are all very much aligned and it is really an opportunity to
get some really good collaboration and hopefully good output.
Senator Reed. Thank you very much.
Mr. Barr, you are going to a position of great
responsibility at a critical moment. We are working to prepare
major reform legislation for financial supervision.
Just to get a sense of what do you feel the key issues are
from your perspective?
Mr. Barr. Thank you very much, Senator Reed.
Again, if confirmed, I would look forward to working
closely with you and the Committee on this issue.
I think President Obama and Secretary Geithner have made
clear the importance of fundamental reform to our system of
financial regulation. It is a reform that needs to be based on
several key principles. We need to be sure that the system does
not permit the growth of systemic risk, that we have
appropriate systems in place to address systemic risk and
prudential supervision.
Second, we need a system that is protective of consumers
and investors, a strong and uniform protection across our
financial sector.
Third, we need to take the steps necessary to reform our
regulatory structure so that it is gap-free and comprehensive
and so that we do not permit the kind of regulatory competition
and arbitrage that has occurred in the past.
And fourth, we need a system that enables us to compete
internationally and to level the playing field and regulation
for both U.S. and foreign firms.
Senator Reed. Thank you. I have had the privilege of
working with you and I have been terribly impressed with your
scholarship and your commitment to dealing very aggressively
and appropriately with some of these very difficult issues.
One area that we have spoken about is the whole issue of
foreclosure and foreclosure mitigation. We have attempted
several times, going back to the previous administration, on a
voluntary basis. We had a first iteration of foreclosure
mitigation legislation. Just last week we passed another
version. Included in that, by the way, is a reform of McKinney-
Vento Homeless Assistance Act, which we look forward to getting
passed. I checked with Chairman Frank and he is all for it,
too. So we think the signs are looking good.
But one of the issues we dealt with was just the
securitization issues, and in particular the tax issues of
REMICs, et cetera. Any thoughts about whether the time has come
to be more forceful in that area? Or any other thoughts you
might have on this sort of securitization problem?
Mr. Barr. Thank you, Senator Reed.
As you know, when we have talked before, I have long been
an advocate of forceful measures to ensure that we have strong
methods for accelerating loan modifications and reducing
foreclosures. When President Obama came into office, he made
that a top priority, and soon after coming into office in
February, announced a loan modification and stabilization plan
with three key elements.
First, additional funding to ensure the capital structure
of Fannie Mae and Freddie Mac are strong so those institutions
could continue to play an important role in stabilizing prices
in the market.
Second, a refinance program authorized by the Federal
Housing Finance Agency to permit more households to refinance,
even though they are under water.
And third, a clear commitment to an aggressive loan
modification plan with a commitment of $75 billion in resources
and strong Treasury guidelines for servicers. And so those two
key elements, real dollars on the table to change behavior and
clear legal guidance to perform loan modifications, I believe
are starting to show significant promise.
There have been now thousands of trial modifications that
have begun. There are 14 servicers who have signed contracts to
implement the loan modification protocols that have been
specified. Those contracting firms cover a little bit more than
75 percent of all mortgage loans in the United States.
So I think we are off to a strong start. I think it is
early to tell whether it is strong enough. I think we are going
to see over time whether the program ramps up in the
appropriate way. And the Administration is committed to
ensuring that the program is successful.
As part of that initiative, the Department of Treasury
released some guidance on the issue that you and I had spoken
about before, the Real Estate Mortgage Investment Conduit
statute, making clear that participation in the Obama
modification plan would not disturb that status for existing
trusts, which is one of the measures that you and I have talked
about in the past.
Again, we are committed to continuing to make sure the
program works and to examining it going forward in the ways
that you have indicated.
Senator Reed. Well, it is an arrow that is still in the
quiver, a much more explicit response to REMICs. But you are
going to be--I presume and I am confident you are going to be
carefully monitoring the progress of the existing measures. And
if they are doing the job, then the arrow stays in the quiver.
And if not, we have it.
Mr. Barr. Thank you, Senator.
Senator Reed. Thank you.
I want to thank all of you, not only for your testimony
today but for your commitment to public service.
I would ask if my colleagues, some who have not been
present, may have questions, those questions will be forwarded
to you within 7 days from the Committee. There may be some,
there may be none. But you might get them and your expeditious
answer is in your own self-interest, so I can stop right there.
I wish you all very, very well in serving the people of
this country.
The hearing is adjourned.
[Whereupon, at 3:34 p.m., the hearing was adjourned.]
[Prepared statements, biographical sketches of nominees,
responses to written questions, and additional material
supplied for the record follow:]
PREPARED STATEMENT OF PETER M. ROGOFF
To Be Federal Transit Administrator,
Department of Transportation
May 13, 2009
Mr. Chairman, Ranking Member Shelby, and Members of the Committee,
I want to thank you for allowing me this opportunity to present myself
as President Obama's nominee to head the Federal Transit
Administration.
Before delivering my formal remarks, I want to acknowledge the
presence of my many friends that are here and, most especially, my
family. My wife, Dena Morris. Our children, Niles and Lucy Rogoff. I
also want to recognize the individual that makes it possible for the
four of us to do all that we do--our phenomenal nanny and friend, Ms.
Murlene Dowling.
Mr. Chairman, having served on the staff of a Senate Committee for
22 years, I know that the confirmation process is one of the most
critically important constitutional responsibilities of the Senate. So
I come to this hearing with humility and great respect for the process.
As I appear before you today, I believe public transportation faces
both remarkable opportunities and serious challenges.
The opportunities begin with the fact that we have a President who
recognizes the central importance of our transit systems to our quality
of life and the quality of our environment. He has spoken of the need
to invest adequately and to invest efficiently. And he has stressed
repeatedly the role that public transportation must play in reducing
pollution, including greenhouse gas emissions, and moving towards
energy independence by diminishing our reliance on foreign oil.
In addition, the American people are creating opportunities by
utilizing transit services in record numbers--and by demanding more.
Transit ridership rose to a modern record in 2008--10.3 billion trips.
What may be more remarkable is that ridership has remained high even as
record gas prices have dropped back down. Many families have sold their
second car--or their only car--either as a matter of convenience or to
cope with the economic downturn. Many other Americans, weary of sitting
in traffic jams, have boarded the train or boarded buses utilizing
designated bus lanes.
Finally, there are great opportunities because the Administration
and Congress are about to rewrite all our surface transportation
programs. In fact, the upcoming authorization process presents an
opportunity like no other to retool our public transportation programs
and refocus them on our most critical national goals.
But as this Committee is well aware, we also face extraordinary
challenges. First and foremost, is the task of financing our efforts to
achieve these goals. The mass transit account of our Federal Highway
Trust Fund is on a path to insolvency. While the transit account is in
less immediate danger than the larger highway account, the balances in
both are falling at a rate that will undermine their ability to support
current obligation levels.
The financing challenge calls for tough choices. So it's all the
more important that we fulfill President Obama's commitment to spend
every transit dollar efficiently and on the worthiest projects.
Against this backdrop, I am especially honored that President Obama
has nominated me to serve as his Federal Transit Administrator. I very
much look forward to working with this Committee, with Secretary LaHood
and with his outstanding team to both tackle the pressing challenges
and capitalize on the extraordinary opportunities.
As I mentioned, the financing dilemma is difficult. But with more
than two decades of experience on the Appropriations Committee staff
specializing in transportation finance, I feel confident that I can
help the Secretary and this Committee identify a more stable and
sustainable funding regime.
Secretary LaHood has made clear his intention to eliminate the
stovepipes within the DOT. He will be asking his agency leaders to work
toward a seamless system that moves people and freight efficiently
between modes of transportation. I believe I can help. My experience in
infrastructure investment programs goes well beyond mass transit. It
includes highway, aviation, intercity rail, and maritime programs. If
we are going to succeed in developing truly seamless networks, then
expanded cooperation and joint investments are going to be the key.
Secretary LaHood and HUD Secretary Donovan are committed to
fostering livable and sustainable communities through the coordinated
efforts of their departments. For the last 4 years, I have had the
joint responsibility of overseeing both the Transportation and HUD
budgets for the Appropriations Committee. Knowing the HUD budget as I
do, and witnessing Secretary Donovan's impressive efforts to transform
HUD, I am particularly enthusiastic about working with him and
Secretary LaHood to promote sustainability.
Finally, I welcome the opportunity to be this Administration's
advocate for mass transit. I plan to be a very public advocate in my
visits with policy makers in communities across the Nation. But just as
importantly, I plan to be a forceful advocate in the less public
debates that go on within the Administration.
We must create new and better transit options in both urban and
rural America. But especially during a period of economic uncertainty
and recovery, a pro-transit agenda must include protecting and
improving transit services for those for whom mass transit is the only
option. If confirmed, this Committee can count on me to be a strong and
vocal partner in advancing that agenda.
Thank you again for this opportunity. I look forward answering any
questions you may have.
PREPARED STATEMENT OF FRANCISCO J. SANCHEZ
To Be Under Secretary for International Trade,
Department of Commerce
May 13, 2009
Thank you Chairman Dodd, Senator Shelby, and Members of the
Committee.
There is no greater call than that of service to one's country and
I am truly honored by President Obama's nomination to serve as Under
Secretary of Commerce for International Trade. I am humbled by the
trust that President Obama and Secretary Locke are placing in me, and I
am cognizant of the serious responsibilities that accompany this
confidence. If confirmed, I look forward to working for them, and with
you, in advancing our Nation's economic well-being and ensuring that
all Americans benefit from free and fair trade.
I want to thank my Mother and my late father for their support and
encouragement. I would not be here if it weren't for their constant
love and commitment to my success.
As Secretary Locke has said, the role of the Department of Commerce
is to be an engine of innovation, job growth, and economic renewal. The
International Trade Administration supports these efforts by
strengthening the competitiveness of U.S. industry, promoting trade and
investment, and ensuring fair trade and compliance with trade laws and
agreements. This mission is critical to enhancing America's global
competitiveness and expanding commercial opportunities for American
manufacturers and service workers throughout the world.
When U.S. businesses seek to promote their goods and services in
overseas markets, the International Trade Administration's programs
lead the way. In short, the agency helps America's firms and workers
navigate through the often complicated and unpredictable waters of
foreign trade--so that U.S. firms' sales abroad help to ensure their
growth in the United States. In particular, ITA focuses on assisting
small and medium-sized businesses to succeed in the international
economy. Small and medium-sized businesses are critical to America's
long-term prosperity and global competitiveness, and ITA programs are
designed to help these companies export to the millions of consumers
that live beyond our borders.
Early in my career, I had the honor of serving former Senator Bob
Graham, while he was governor of Florida, as the first director of my
State's Caribbean Basin Initiative program. I then served in the
Clinton administration in the Office of the Special Envoy for the
Americas, a role that required carefully balancing foreign policy goals
with advancing U.S. economic interests. Subsequently I served as
Assistant Secretary of Transportation, where I oversaw the Department's
international negotiations.
In my current position with Cambridge Negotiation Strategies, I
have had the opportunity to work with American companies, other
multinational companies and international organizations in more than 30
countries around the world. I have also consulted with heads of
government and community leaders in Latin America to help resolve a
range of complex issues. In Medellin, Colombia I lead a team as part of
a ``Teaching Tolerance'' program, an initiative to break the cycle of
violence plaguing the country. My work has included projects with the
World Bank and the Inter American Development Bank. I also advised the
president of Ecuador in negotiations to settle the 56-year-old border
dispute with Peru.
If confirmed, I look forward to working closely with this committee
to support American innovation and entrepreneurship and open global
markets for American-made goods and services, while creating new jobs
and economic growth at home.
PREPARED STATEMENT OF RAPHAEL W. BOSTIC
To Be Assistant Secretary for Policy Development and Research,
Department of Housing and Urban Development
May 13, 2009
Chairman Dodd, Ranking Member Shelby, and Members of the Committee,
I am honored and humbled to appear before you today as you consider my
nomination to serve as the Assistant Secretary for Policy Development
and Research at the U.S. Department of Housing and Urban Development.
Before going further, I must acknowledge those who have given
unconditional love and support through my life, most significantly my
partner Jeffrey Taylor, my parents Viola and Raphael T. Bostic, my
sister Ebony, my aunt Patricia Williams, and mentors Glenn Canner, John
Shoven, Roger Noll, Susan Wachter, and Stuart Gabriel.
The time we find ourselves in is remarkable, both because of its
gravity and its origins. By many measures, the economy has not
performed so poorly since the Great Depression of the 1930s. And for
perhaps the first time in this Nation's history, housing has been at
the root of the macroeconomic troubles. This reality means that a deep
understanding of housing markets is critical, and evidence on what does
and does not work in these markets will be essential for creating a new
market structure that endures and corrects the weaknesses that helped
to create the current troubles.
Secretary Donovan recognizes this, and in his public and private
statements has already placed a considerable emphasis on the importance
of collecting and using data to make informed decisions. If confirmed
to my position, I will work hard to see that the Secretary's vision is
pursued and achieved. In this way, I hope to contribute to a
transformation of the Department into an efficient, informed leader of
policy on issues associated with housing and urban development.
My background, including significant work in academics, government
and community development, provides me with assets that will allow me
to help the Office of Policy Development and Research (PD&R) increase
its efficacy and effectiveness. A key goal is for PD&R efforts to
contribute to a deeper and more meaningful understanding of the issues
facing our housing and urban markets and communities.
From an academic perspective, my research has given me knowledge
and insights about both housing and urban development, and this,
combined with my continual and intensive interaction with other
academic scholars, will allow me to promote the implementation of
evidence-based policy with the Secretary and the Department's program
offices. In addition, my training and perspectives gained as an
academic researcher have given me skills that will help ensure that
research and program evaluations produced or funded by PD&R are
relevant, timely, and of the highest quality.
Through my career to date, I have interacted extensively with all
the key HUD constituencies and so am able to add value and perspective
to HUD's research efforts, as well as its policy-making and oversight.
I understand housing and housing finance through my research and my
work at the Federal Reserve Board. I know the nuts and bolts of
affordable housing development, as well as the difficulties and
opportunities it affords for lower-income and minority households,
through my teaching them at USC, service as a Board member of a local
nonprofit housing developer, and research. My work with a local
community development organization in East Palo Alto and other research
I have done have provided insights as to the challenges of broad-based
urban and community development. My role as director of a real estate
development program required my engagement of all aspects of the
development process, and forced me to engage and understand how design,
law, economics, finance, and construction all interact. Of particular
significance, the exposure to construction highlighted the key role
that engineering and technology can play in helping to make housing
affordable and high quality.
One of Secretary Donovan's top priorities is to improve the culture
of the Department as an institution, and I pledge to further this goal
for PD&R. This transformation will require significant organizational
management, and my experiences at USC over the past several years have
prepared me for this challenge. I aim to provide an environment that
allows PD&R to perform and produce at high levels, as I believe the
Office has tremendous potential that has lagged in terms of its
productivity, prominence and influence.
Finally, I come to you today with a clear understanding of the
opportunities and obstacles that this position presents. Through my
work at the Federal Reserve Board and HUD, I have seen how policy is
created at the Federal level, and am familiar with the dynamics
associated with operating at PD&R. This knowledge base will facilitate
my navigation of the policy-making milieu and should lead to effective
decision-making and promotion of ideas that will benefit the American
people.
In conclusion, I am very excited to serve the country at this
pivotal moment in its history. I am eager to support the Secretary's
efforts and work with the members of this committee to help heal the
Nation's housing markets and promote the flourishing of its urban
areas.
Thank you for giving me the opportunity to speak with you today and
I welcome any questions you might have.
PREPARED STATEMENT OF SANDRA HENRIQUEZ
To Be Assistant Secretary for Public and Indian Housing,
Department of Housing and Urban Development
May 13, 2009
Thank you Mr. Chairman, Senator Shelby and distinguished Members of
the Committee, for considering my nomination and the opportunity to
appear before you this morning. I am truly honored and humbled to have
had Secretary Donovan recommend that President Obama nominate me as
Assistant Secretary for Public and Indian Housing.
Thank you, Congressman Frank for introducing me today. With me are
my father, Howard Brooks, my brother, Bruce Brooks, my son, Carlos and
colleague, DaVonne Bolton. My son and daughter remain in Boston, but I
am certain they are watching this proceeding.
The most significant portion of my career has been in real estate
property management of affordable housing, both the private and public
sectors of the industry. I quickly turned to residential real estate
because I was more interested in the people who lived there than the
commercial side. I believe that housing is a right and that the
provision of safe, decent, well-cared for units for low and very low
income families and individuals lays the foundation to change lives. If
a family's shelter is secure, then that household can begin to work on
other aspects of their lives that many of us take for granted, such as
child care, getting a job, finding a better one, education for
themselves and their children.
For the past 13 years, I have been the Administrator and Chief
Executive Officer of the Boston Housing Authority. As the largest
single landlord in the City of Boston, and one of the largest public
authorities in the Nation, the BHA provides 11,500 public housing units
and 13,000 rental assistance subsidies, together housing 10 percent of
the city's population. With an 850 person workforce, and program
budgets exceeding $280 million annually, I have led an outstanding team
to reform the housing authority from near troubled status to that of
high performer in its public housing and Section 8 portfolio. Following
real estate industry policies and practices, the BHA moved to asset
management models before Congress and HUD required it. We embraced the
basics and the vacancy rate dropped from 15 percent to 2-3 percent
across the portfolio, nonemergency work order completion times dropped
from 120 days to 15, and they continue to fall, and rent collections
are up.
At the same time, we moved from being labeled by HUD as
``systemically discriminatory'' to ``a national fair housing model,''
partnered with sister city agencies, local community development
corporations and other nonprofit housing providers to increase the
production of affordable rental housing, created housing strategies and
programs to house the homeless, and introduced ``green principles''
into our business practices and into our building maintenance and
construction.
The Boston Housing Authority has used the HOPE VI program to
redevelop three properties, with a fourth just beginning. In addition,
we created 62 new first-time homebuyers, none of whom are in default or
foreclosure. We have used mixed financing to redevelop two other
properties, and when all redevelopment is taken together, they total
almost $1 billion over all. For every Federal or State dollar, we
leveraged eight.
We have used Energy Performance Contracting to retrofit many of our
outdated heating plants, making them state-of-the-art, more efficient,
less costly to operate and creating better living environments for
residents.
In addition, we have used available HUD programs to use a portion
of our ongoing capital allocation to leverage bond financing to expand
ongoing improvements to the physical plant. Coupled with recent ARRA
funding, this totals more than $110 million.
My housing experience has taught me that regardless of the price
point, maintaining and improving properties is essential to those who
live there. Preservation and improvement of the 1.2 million units of
public housing stock, the creation of more affordable rental housing,
as well as the continued ability to support families and individuals
through rental assistance, is essential to realizing the dream of
millions of our citizens.
Secretary Shaun Donovan's commitment to accountability and
transparency and his leadership of HUD provides us with the opportunity
to do our best work on behalf of those who benefit from HUD's programs.
If I am confirmed, I will be focused on and committed to learning more
about Native American housing, as well as public housing. I am grateful
that President Obama has nominated me and I want to thank each of you
for your consideration of my nomination. If confirmed, I look forward
to serving the Nation, especially those who live and work in public and
Native American housing. Thank you.
PREPARED STATEMENT OF MERCEDES MARQUEZ
To Be Assistant Secretary for Community Planning and Development,
Department of Housing and Urban Development
May 13, 2009
Mr. Chairman, Ranking Member Shelby, and distinguished Members of
the Committee, thank you for the opportunity to appear before you
today. I would also like to thank Congressman Becerra for his kind
introduction. Over the years, many friends have encouraged and
supported me in my work. Some of them are here today. However, no one
has been more steadfast or selfless than my partner of 21 years, Mirta
Ocana. It is my pleasure to introduce her today.
I am honored to have been nominated by President Obama to be
Assistant Secretary for Community Planning & Development. I also want
to thank Secretary Donovan for asking me to come and work with him--
giving me the opportunity to join an excellent team of professionals
dedicated to insuring quality housing for every American.
I have spent my career working on the full spectrum of housing and
community development issues. I have grappled with these issues as a
civil rights litigator, an affordable housing developer, a Federal
Government official and for the last 5 years as the Director of Housing
for Los Angeles, the department that crafted the city's response to the
foreclosure crisis.
I started my career as a civil rights litigator. I have represented
folks in matters involving substandard housing conditions, classic fair
housing discrimination cases, and Federal class actions relating to
community gentrification and wide spread discrimination in public
housing. Through this work I learned the value of decent, safe and
affordable housing within the context of a healthy neighborhood.
After a dozen years of litigation, I was appointed by President
Clinton to the U.S. Department of Housing and Urban Development (HUD),
first as Deputy General Counsel for Civil Rights and Fair Housing and
later, as Senior Counsel to Secretary Andrew Cuomo. At HUD, I helped
craft what the Secretary referred to as HUD's ``Justice Agenda.'' This
required us to reach across departmental divisions to assemble and lead
cross-departmental teams. For example, to examine the possible
discriminatory use of CDBG dollars we put together a team from
Community Planning & Development (CPD), Fair Housing and the Office of
General Counsel (OGC). By working in a coordinated fashion meaningful
results were achieved. Through this work I learned the intricacies of
the funding programs which fall within the purview of the Assistant
Secretary for Community Planning and Development.
While most of my work centered on urban communities, I was also
privileged to work in rural areas, including Native American
reservations and ``Colonias'' along the U.S./ Mexico border. My work
included the design of HUD's first Rural Housing and Economic
Development NOFA's, and in partnership with HUD's Office of Native
American Programs, the launch the Self Help Housing Program on the Pine
Ridge Reservation in South Dakota. This work also brought the
opportunity to collaborate with Rural Housing at USDA to make sense of
conflicting policies affecting the development of rural housing. This
work touched me personally. I am the granddaughter of farm workers--and
while I grew up in San Francisco, California, I have spent a
considerable amount of time visiting family in California's San Joaquin
valley.
After my experience at HUD, I went back home to Los Angeles to
practice housing and community development. As Vice-President of
McCormack Baron Salazar, one of the country's most successful private
affordable housing developers, I spent 3 years working on classic ``tax
credit'' affordable housing development as well as HOPE VI deals. In
essence, I took deals from concept to the final securing of financing.
I have spent the last 5 years as General Manager of the Los Angeles
Housing Department (LAHD). The agency had a long-standing reputation
for antiquated thinking, inadequate infrastructure and a lack of
transparency.
Within my first year we achieved a top to bottom assessment and
called in all of the stakeholders--lenders, lawyers, developers,
landlords, tenant advocates, and government partners--always seeking to
become public sector entrepreneurs--building momentum working with the
market instead of lagging behind it. We also launched ``Project Clean
House''--an effort that identified the 50 most underperforming deals
and brought the developers--for profit and nonprofit--in to meet with
us. We were able to get the majority of the deals back on track and
completed. As for the rest--over a 2 year period--we recaptured or de-
obligated, either voluntarily or through judicial proceedings--over $50
million and put every penny back into the financing of affordable
housing--and in 2006 launched the city's Permanent Supportive Housing
Program.
In partnership with national lenders, the philanthropic community
and Enterprise Community Partners we successfully implemented the New
Generation Fund--a $100 million Acquisition Capital fund. This fund
works with the Affordable Housing Trust Fund to provide acquisition,
predevelopment and gap financing to private and nonprofit affordable
housing developers in a transparent and competitive system.
Now, our biggest challenge is the current economic and housing
crisis. Los Angeles has experienced over 24,000 foreclosures in the
last nine quarters. We address the foreclosure crisis in thoughtful and
innovative ways. Early on we invested in data. Los Angeles is 469
square miles in size and our investment in and development of GIS maps
gave us the information we needed to understand the true nature of our
problem and where to expend the $32.8 million Los Angeles received from
NSP 1. We identified distinctly impacted neighborhoods of the city,
focusing on 10 by 10 block areas where we can also achieve other goals
like transit oriented development, preservation of affordable
multifamily housing, and green building standards. Restore
Neighborhoods LA, the community based nonprofit we created to acquire
and dispose of both multifamily and single family properties is up and
running. We also designed a mapping function accessible through our Web
site where any member of the public can log on and determine whether a
foreclosed property they are interested in falls within our
``impacted'' areas and, as such, is eligible for an acquisition/
rehabilitation loan.
As a practitioner, I have experienced the constraints of HUD's
regulatory structure, which often creates regulations that often do not
take into account that one size does not fit all. If confirmed, I
commit to bring a disciplined focus to CPD and will work to insure
accountability, transparency, expertise and flexibility that support
the efforts of local government to achieve meaningful community
development.
It would be an honor to serve as Assistant Secretary for Community
Planning and Development. Mr. Chairman, Senator Shelby, I want to thank
you and the others Members of the Committee for the opportunity to
appear before you today and I am prepared to answer any questions you
may have.
PREPARED STATEMENT OF MICHAEL S. BARR
To Be Assistant Secretary for Financial Institutions,
Department of the Treasury
May 13, 2009
Chairman Dodd, Ranking Member Shelby, and distinguished Members of
the Committee, it is my honor to appear before you today as the nominee
for the position of Assistant Secretary of the Treasury for Financial
Institutions.
With me today are my wife, Hannah Smotrich; my children, Avital,
Dani, and Etai; my mom, Deborah Barr; my sisters Karen and Lisa; my
uncle Gabe Stern; and my wife's parents, David and Bunny Smotrich. I'm
sure my dad, David Barr, is here with us in spirit. I would not be here
before you today without their love and support and I am enormously
indebted to them.
My parents taught me the centrality of public service. My mom is a
high school English teacher here in Washington, DC, and gives her all
to her students. My dad was a labor lawyer who represented hard-working
Americans. My grandmother, Phyllis Stern, who turned 98 earlier this
year, only recently had to give up her volunteer activities, and her
son, Gabe Stern, here today, is a local hero in Gales Ferry,
Connecticut for his work helping to preserve jobs at the local
submarine base.
I am humbled by the faith that President Obama and Secretary
Geithner have placed in me during these extraordinary times. The
President and the Secretary have moved aggressively to stabilize our
economy and our financial markets, and to provide relief to struggling
homeowners and strength to our mortgage finance system. The
Administration has put in place initiatives to help small businesses,
consumers, and students and to restore the healthy functioning of our
financial markets.
While we address the current crisis, the President and the
Secretary are committed to fundamental reform to reduce the likelihood
of crises in the future and to contain such crises if they occur. The
current financial crisis has revealed significant weaknesses and
glaring inconsistencies in our system of financial regulation.
If confirmed, I look forward to working closely with you to take
the necessary steps to reform our financial regulation and to restore
honesty and integrity to our financial system. We need a comprehensive
and effective system of prudential supervision and effective measures
to reduce systemic risk. We need clear accountability and full
transparency. We must ensure that we put in place robust protections
for consumers and investors with strong and uniform enforcement. We
must ensure that our financial system is inclusive, and fair. And we
must have a system that evolves over time to keep up with the pace of
financial innovation domestically and globally.
Innovation is a hallmark of America's financial system, and with
the right changes in place, we can expect our financial system once
again to be vibrant and strong.
I come before you having had the privilege of working on financial
issues for a number of years. As a professor of law at the University
of Michigan Law School, where I have taught for the last 8 years, I
teach courses on financial institutions policy and international
financial regulation. I have published widely on financial policy and
regulation and have conducted extensive empirical research on the needs
and behaviors of consumers in the financial services system. My recent
work has focused on ways in which a deeper understanding of how people
think and behave based on real-world research can better inform public
policy, rather than relying solely on abstract models.
While a professor, I have served as the Chair of the Financial
Institutions and Consumer Financial Services Section of the Association
of American Law Schools; as a Research Affiliate at the National
Poverty Center; and as a senior fellow at the Brookings Institution and
at the Center for American Progress. In these capacities, I have often
spoken out about the need for reform of our financial system, and in
particular, about the ways in which our financial system has ill-served
many Americans.
Prior to entering academics, I served in senior positions in the
U.S. government. From 1995 to 2001, I served in the Treasury
Department, as Deputy Assistant Secretary for Community Development
Policy (from 1997 to 2001), and prior to that, as Special Assistant to
the Secretary (1995 to 1997). I also concurrently served from 1999 to
2001 as Special Adviser to the President and Executive Director of the
Federal District of Columbia Task Force at the Office of Management and
Budget, where our work was largely focused on putting the District of
Columbia's fiscal house in order. These positions gave me the
opportunity to work with many of you and your staffs, to contribute to
the work of the Administration in a wide range of areas, and to gain
the experience to know that an open mind and honest dialogue lead to
better policy judgments.
Before joining Treasury, I served in the State Department, from
1994 to 1995, as Special Adviser and Counselor to the Director of the
Policy Planning Staff. Before entering the Executive Branch, I was a
law clerk to Justice David Souter of the U.S. Supreme Court and to then
District Judge Pierre Leval of the Southern District of New York.
I am hopeful that my experience will serve the Department well if I
am confirmed, and I am even more hopeful about the future of our great
Nation. Working together, we can help to lay the foundation for a sound
recovery and a bright economic future.
Thank you.
RESPONSE TO WRITTEN QUESTIONS OF CHAIRMAN DODD
FROM PETER M. ROGOFF
Q.1. As you know, I have spoken frequently about the need to
better coordinate transportation policies with housing, energy,
and environmental policies. If we are going to really reduce
traffic congestion and address some of the biggest problems of
the 21st Century, we need to end the current policy stove-
piping and think through these issues in a more comprehensive
fashion. That is why I wrote President Obama earlier this year
to urge him to establish a White House Office of Sustainable
Development.
Mr. Rogoff, what actions can you take as the leader of the
Federal Transit Administration to encourage this kind of
integrated approach to policy and to bring various agencies
together to ensure that transportation policy is better
coordinated with housing, community development, energy,
environment, and climate change policies to promote sustainable
growth and development?
A.1. For the last 4 years, I have had the joint responsibility
of overseeing both the Transportation and HUD budgets for the
Appropriations Committee. Knowing the HUD budget as I do, and
witnessing Secretary Donovan's impressive efforts to transform
HUD, I believe that Federal agencies can play a role in
encouraging State, regional, and local agencies to make better
decisions that promote sustainable development while supporting
a variety of other public interest goals.
To that end, if confirmed, I will support Secretary LaHood
and Secretary Donovan's efforts to implement the President's
national priorities for transportation, including his focus on
transparency and accountability, community needs, and reduced
oil consumption and GHG emissions. The Infrastructure Bank in
the President's budget signals a new direction in
transportation policy that evaluates projects based on national
criteria like community development, congestion reduction, and
environmental impact. I will work with the Secretaries in
pursuing the President's commitment to work closely with
Congress, other Federal departments and agencies, the Nation's
Governors, and local elected officials to develop an integrated
regional planning and development approach for all of our
transit investment decision making.
------
RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
FROM PETER M. ROGOFF
Q.1. Reforming the New Starts Process--In the last
authorization bill we attempted to streamline the New Starts
process and add additional categories for consideration during
project evaluation. Nevertheless, the process continues to take
an inordinate amount of time and many of the factors Congress
added, including economic development, still have not been
implemented.
I am interested in your thoughts on the overall process and
what changes can be made to ensure that it can move forward
more expeditiously while still conducting a thorough
evaluation?
A.1. As I mentioned in my testimony, I share your concerns and,
if confirmed, I intend to focus on streamlining the project
evaluation process as one of my first and highest priorities.
Certainly, as stewards of Federal taxpayer dollars, and in a
fiscal environment where resource demands far exceed available
funding, it is important that FTA--and local project
stakeholders--have good information of project costs and
benefits on which to base resource allocation decisions. If
confirmed I must also consider that unnecessary delays in the
evaluation process can cause increases in project costs.
Working as we are within a tight funding environment, costly
delays will inevitably cause us to build fewer projects--an
unacceptable result in my view given our need to expand transit
options.
I am aware that in 2006, FTA hired Deloitte Consulting to
analyze the New Starts program to identify opportunities for
streamlining. If confirmed, I will plan to review those
recommendations and determine which ones should be implemented,
if not already implemented by the agency. In addition, I will
conduct my own ``bottom up'' streamlining review of the entire
process in consultation with industry experts, project
sponsors, and FTA staff.
Q.2. State of Good Repair--I remain concerned about continuing
to make investments in infrastructure without any requirement
for maintaining a state of good repair long-term. The recently
released Rail Modernization Study points to a significant
backlog in unmet recapitalization needs at the Nation's seven
largest rail transit operators. However, these properties have
received billions in Federal funding for new projects.
What, in your view, can we do to make certain that we
adequately monitor and ensure the long-term maintenance of
these assets while ensuring appropriate growth to meet capacity
demands?
A.2. As part of the new starts project evaluation process, FTA
is currently required to evaluate data to confirm that a
project sponsor will have the financial ability to operate the
proposed new service as well as sustain current and planned
service levels throughout the system. The Rail Modernization
Study should serve as a ``wake up call'' for all concerned with
the quality and safety of our major rail transit systems. It
provides a stark picture that should inform the resource
decisions of transit agencies as well as the resource decisions
of policy makers who will craft the upcoming authorization
bill. If confirmed, I will review the study to determine
whether greater commitments to maintaining existing capital
infrastructure should be considered as a condition for
assistance under the new start program.
A balance must be found that encourages the expansion of
transit options while ensuring that transit agencies are not
digging themselves into a ``deferred maintenance hole'' that
could endanger the long-term viability of the transit agency
and the safety of it passengers. I look forward to working with
the Committee on this important issue.
Q.3. Highway Trust Fund--The Administration's budget proposes a
greater reliance on the General Fund to finance Highway and
Transit projects rather than the Highway Trust Fund. While we
all recognize the fiscal difficulties the Highway Trust Fund is
encountering, this Committee has heard testimony from various
stakeholders, as well as the Secretary, that such a shift would
create a significant amount of uncertainty in the program.
Given your experience on the Appropriations Committee, how
do you view the shift to general fund monies to finance Highway
and Transit projects, how would it impact the goals of the
programs and do you believe that it could result in
difficulties conducting long-range planning and raising
capital? If so, are there other ways, in your view, that
Congress could address this uncertainty?
A.3. I am also concerned about the status of the mass transit
account. If I am confirmed, I would welcome the opportunity to
be the Administration's advocate for public transportation by
exploring innovative ways to generate a steady revenue source
for transit. As I testified, I believe State and local
jurisdictions have had some success in innovative financing and
we at the Federal level can learn from that experience. In
addition, having participated in budget battles as a Senate
staff person for the last 22 years, I still think that it is
easier to advocate for necessary resources when you can point
to available balances in a designated trust fund--resources
that were collected for the purpose of being spent on a
designated activity--like highways, transit systems, or the
upkeep and modernization of the national aviation system. I
hope to play a vital role in crafting these solutions under the
leadership of Secretary LaHood.
Q.4. Innovative Financing--It is no secret that I am a
proponent of pursuing innovative methods of financing to
advance our infrastructure projects. However, I am disappointed
that we have not made more progress, particularly as it relates
to public transportation. The Secretary has stated that we must
look to bold new approaches.
I am interested in your views about how we can encourage
greater utilization of innovative financing methods to advance
public transportation projects.
A.4. I believe there are great opportunities for innovative
financing methods for transit projects. Moreover, the financing
challenges we face moving forward are going to require us to
utilize them to a greater degree while ensuring that program
integrity is maintained.
I am aware that FTA has piloted public-private partnerships
in transit using the new authority provided in SAFETEA. This
new authority allows for up to three public-private
partnerships and FTA has been working with three transit
agencies to pilot-test how private sector innovation and know-
how can advance public transportation. I understand FTA has
also conducted five workshops around the country to provide
information about the benefits of public-private partnerships
in transit. Public-private partnerships have shown promise as
long as the interests of taxpayers and users are protected.
Perhaps the greatest promise to expand innovative financing
of transit projects is to be found in President Obama's 2010
budget proposal to commit $5 billion to capitalize a National
Infrastructure Bank. The bank would commit Federal funds to
large capital projects through a wide variety of mechanisms
including mechanisms that attract State, local, and private co-
investment. If confirmed, I would seek to work within the
Administration to ensure that transit projects participate
fully in the Bank's investment plans and that the Bank
structures its assistance in a manner that will be workable for
major transit projects.
------
RESPONSE TO WRITTEN QUESTIONS OF SENATOR BAYH
FROM PETER M. ROGOFF
Q.1. On April 30, 2008, the Federal Transit Administration
(FTA) made final a new Charter Service Rule-604. In the final
rule Section 604.11--Petitions to the Administrator--contains a
process by which a recipient of Federal funding may petition
for an exception from the private charter prohibitions for
certain events.
As FTA Administrator will you implement Section 604.11 to
restrict the frequency with which a recipient may seek a
petition?
A.1. While I am not familiar with this particular provision of
the charter service regulation, I believe that fairness and
flexibility are important to ensure access to transportation
services. If I am confirmed as FTA Administrator, I would
review the charter service regulation to determine whether a
restriction on a recipient's ability to apply for an exception
is helpful or acts as a hindrance in the provision of
transportation to widely attended public events.
Q.2. As FTA Administrator will you implement Section 604.11
(b)(4)(i) to require a recipients petition to provide for a
plan to integrate registered charter operators into the service
where no third party contract exists? If not, please explain
how you will balance recipients of Federal-aid with registered
providers where no third party contract exists for events of
national or regional significance?
A.2. I believe that it is of critical importance to strike the
right balance between access to transportation services and
for-profit charter services. If I am confirmed as FTA
Administrator, I pledge to examine the impact of FTA's charter
service regulation on events of regional or national
significance where there is no third party contract.
Q.3. As FTA Administrator will you implement Section 604.11
(b)(4)(i) to include consideration of the national or regional
events' number of registered service providers' buses engaged
in private charter at the event compared to the number of
recipient's buses for which the petition is sought?
A.3. As I testified, I plan to be a vocal advocate for public
transportation. To that end, if I am confirmed, I would
advocate for fairness in the application of the charter service
regulation. If impediments exist to providing fair and
efficient transportation to widely attended public events, I
will analyze those challenges and work with interested parties
to resolve them.
Q.4. As FTA Administrator will you establish minimum
characteristics for events of regional or national significance
under Section 604.11 (a)(1)?
A.4. If there are not minimum characteristics for events of
regional or national significance in the charter service
regulation, then if I am confirmed as FTA Administrator, I
would be willing to consider the establishment of such
characteristics if that would better enable FTA to determine
whether an exception to the regulation for an event of regional
or national significance is appropriate.
Q.5. As FTA Administrator would an event with attendance of
more than 200,000 participants qualify as an event of regional
or national significance under Section 604.11 (a)(1)? Does an
event of that size provoke safety or homeland security issues
worthy of inclusion in the 604 analysis?
A.5. If I am confirmed, I will look closely at the exception
for events of regional or national significance to determine
whether it is working as intended and whether minimum
characteristics should be established such as the number of
participants attending the event.
------
RESPONSE TO WRITTEN QUESTIONS OF SENATOR WARNER
FROM PETER M. ROGOFF
Q.1. As you are probably aware, the Washington Metropolitan
Area Transit Authority was created primarily to serve the
Federal Government. However, not only is WMATA the only major
U.S. transit agency without a significant source of dedicated
funding (such as a sales tax), the local jurisdictions in which
it operates do not receive property taxes from much of the
property adjacent to Metrorail stations and Metrobus stops
because it is owned by the Federal Government. WMATA continues
to be essential to the operation of the Federal Government
(e.g., Federal employees comprise nearly 40 percent of WMATA's
peak period ridership), as well as a component for ensuring
continuity of Federal Government operations during an
emergency. Do you believe that WMATA has a unique relationship
with the Federal Government and that there is a need for the
Federal Government to ensure that the system remains in a state
of good repair?
A.1. I do believe that WMATA has a unique relationship with the
Federal Government. As you note, WMATA provides many Federal
workers, safe, reliable transportation to and from their jobs.
Also, the general public relies heavily on WMATA to access
government services and the Capital Region.
As a recent report commissioned by the Appropriations
Committee reveals, maintaining the Nation's bus and rail
systems in a State of Good Repair is essential if public
transportation systems are to provide safe and reliable service
to millions of daily riders. That report studied the conditions
and needs of the seven largest rail transit agencies, including
WMATA. If I am confirmed as FTA Administrator, I will take an
active interest in WMATA's new multiyear capital improvement
program, which becomes effective in July 2010, and is designed
to address upkeep and maintenance of the system. I also support
FTA's decision to tie the Dulles Corridor Metrorail project's
funding eligibility to the state of good repair for WMATA. As
part of that effort, the Commonwealth of Virginia, the State of
Maryland, and the District of Columbia agreed to commit to fund
the significant capital rehabilitation necessary for the
overall system to enter into and maintain a state of good
repair. That arrangement may serve as the model for future
Federal funding agreements so that the Federal Government can
ensure that transit agencies seeking to expand their
infrastructure are also taking adequate care of their existing
infrastructure. Since WMATA service to the Capital region is so
essential, I believe every effort needs to be made to keep the
system up and running safely and efficiently.
------
RESPONSE TO WRITTEN QUESTIONS OF CHAIRMAN DODD
FROM FRANCISCO J. SANCHEZ
Q.1. What was the extent of your involvement in the business of
the Florida-based company Renaissance Steel and its receipt of
a grant from the Corporation to Develop Communities of Tampa
Incorporated?
A.1. In the summer of 2003 I joined the Board of the Community
Development Corporation of Tampa (``CDC of Tampa''). CDC of
Tampa is a nonprofit 501(c)3 organization dedicated to
alleviating poverty and physical deterioration in the East
Tampa area.
In the summer of 2005, CDC of Tampa staff engaged in
discussions with Renaissance Steel, a start-up light-gauge
steel manufacturing company located in East Tampa, about
applying for a Department of Health and Human Services
(``HHS'') grant to support Renaissance Steel's efforts to
create manufacturing jobs in East Tampa. I did not participate
in these discussions, and had no relationship with Renaissance
Steel at the time. Following these discussions, the CDC of
Tampa staff informed the Board of Directors that it had applied
for a $700,000 grant from HHS, and planned to loan $500,000 in
start-up capital to Renaissance Steel.
In September 2005, HHS informed CDC of Tampa that its grant
application was approved for funding.
In April 2006, I was hired by Renaissance Steel as its
Chief Executive Officer. At this time, Renaissance Steel was
struggling to penetrate the market and make sales. In July
2006, CDC of Tampa loaned Renaissance Steel $500,000 from its
HHS grant for job training, hiring workers, equipment and
working capital. The CDC of Tampa Board of Directors approved
the loan to Renaissance Steel, but I recused myself from this
process because of my new relationship with Renaissance Steel.
In May 2007, I resigned from the CDC of Tampa Board of
Directors. In July 2007, although Renaissance Steel's sales
figures improved, the company experienced cash flow
difficulties, and it did not have enough money to meet its
payroll. I made an unsecured personal loan of $160,000 to
Renaissance Steel, so it could pay its employees.
In November 2007, Renaissance Steel ceased operations, and
I resigned my position as CEO. Debts to some creditors,
including CDC of Tampa, remained outstanding. I did not recoup
$350,000 in personal loans and guarantees that I made to
Renaissance Steel during my tenure.
------
RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
FROM FRANCISCO J. SANCHEZ
Q.1. Please share with the Committee how you would use your
office to promote U.S. exports?
A.1. ITA plays an important role in creating and sustaining
high-paying jobs by helping U.S. businesses export, working for
continued and greater access to foreign markets, and advocating
for a fair trade environment. The Commerce Department, as the
chair of the interagency Trade Promotion Coordinating Committee
(TPCC), has the lead role in ensuring that all U.S. export
promotion programs and resources are deployed in a strategic
and effective manner. If confirmed, I will work to ensure that
the Department's export promotion programs, and those of the
TPCC member agencies, maximize the competitiveness of U.S.
businesses in the global marketplace. I will look forward to
supporting the Secretary in his consultations with other TPCC
agencies to develop a strong set of national priorities for
boosting U.S. exports.
Q.2. If confirmed, do you plan to focus on opening markets for
any specific industries in any specific countries?
A.2. In spite of the global scope of the economic downturn,
willing buyers still exist abroad and many markets continue to
grow. Economies in developing countries in Asia, led by China
and India, are expected to grow by almost 5 percent this year,
and regional economies in the Middle East and Africa are
expected to grow more than 2 percent this year. If confirmed, I
will work to maintain and improve access to these and other
important markets.
Our trade promotion priorities should be closely aligned
with the President's economic recovery and reinvestment goals.
In the short term, if confirmed, I will look to create jobs by
helping U.S. companies that currently export to continue doing
so, and by encouraging more U.S. companies to export. Also, if
confirmed, I would strive to ensure that, in the long term, new
U.S. technologies in sectors like clean energy, smart grids,
and healthcare lead to increased export opportunities around
the world.
ITA will play an important role in supporting
Administration efforts to build on existing trade agreements
and in negotiating new ones in consultation with Congress and
key stakeholders. If confirmed, I will ensure that ITA's
resources are used to their maximum in achieving trade
agreements that create opportunities for all Americans.
Q.3. I would like you to discuss how, if confirmed, you would
work to ensure that American firms are not victims of unfair
trading practices and what you believe can be done to ensure
countries live up to their WTO obligations?
A.3. I am committed to vigorous enforcement of our trade laws,
and to ensuring that domestic industries obtain effective
relief from unfair trade practices. The Department of Commerce
offers a wide variety of assistance to U.S. producers in
connection with U.S. laws regarding unfair trade and, if
confirmed, I will see to the effective administration of those
laws.
It is important that the laws, practices and policies of
other governments be consistent with their WTO obligations. If
confirmed, I will make sure that vigilant monitoring of our
trading partners is maintained, and that timely and effective
advocacy on behalf of U.S. companies facing foreign market
barriers and unfair trade practices continues.
Furthermore, with respect to the Doha negotiations, I will,
if confirmed, firmly press for an outcome that maintains the
integrity of our trade remedy laws.
Q.4. Please discuss your past role as CEO of Renaissance Steel
and the grant awarded to Renaissance Steel by the Corporation
to Develop Communities of Tampa, Inc. (CDC).
A.4. In the summer of 2003 I joined the Board of the Community
Development Corporation of Tampa (``CDC of Tampa''). CDC of
Tampa is a nonprofit 501(c)3 organization dedicated to
alleviating poverty and physical deterioration in the East
Tampa area.
In the summer of 2005, CDC of Tampa staff engaged in
discussions with Renaissance Steel, a start-up light-gauge
steel manufacturing company located in East Tampa, about
applying for a Department of Health and Human Services
(``HHS'') grant to support Renaissance Steel's efforts to
create manufacturing jobs in East Tampa. I did not participate
in these discussions, and had no relationship with Renaissance
Steel at the time. Following these discussions, the CDC of
Tampa staff informed the Board of Directors that it had applied
for a $700,000 grant from HHS, and planned to loan $500,000 in
start-up capital to Renaissance Steel.
In September 2005, HHS informed CDC of Tampa that its grant
application was approved for funding.
In April 2006, I was hired by Renaissance Steel as its
Chief Executive Officer. At this time, Renaissance Steel was
struggling to penetrate the market and make sales. In July
2006, CDC of Tampa loaned Renaissance Steel $500,000 from its
HHS grant for job training, hiring workers, equipment and
working capital. The CDC of Tampa Board of Directors approved
the loan to Renaissance Steel, but I recused myself from this
process because of my new relationship with Renaissance Steel.
In May 2007, I resigned from the CDC of Tampa Board of
Directors. In July 2007, although Renaissance Steel's sales
figures improved, the company experienced cash flow
difficulties, and it did not have enough money to meet its
payroll. I made an unsecured personal loan of $160,000 to
Renaissance Steel, so it could pay its employees.
In November 2007, Renaissance Steel ceased operations, and
I resigned my position as CEO. Debts to some creditors,
including CDC of Tampa, remained outstanding. I did not recoup
$350,000 in personal loans and guarantees that I made to
Renaissance Steel during my tenure.
------
RESPONSE TO WRITTEN QUESTIONS OF SENATOR BROWN
FROM FRANCISCO J. SANCHEZ
Q.1. We have heard much concern from the district export
councils in Ohio that the US Commercial Service is underfunded
and has several officer positions overseas that are unfilled.
What are your plans for the U.S. Commercial Service moving
forward in order to assist American companies in beginning and
expanding their export business?
A.1. The U.S. & Foreign Commercial Service (CS) is a critical
part of the International Trade Administration. Under my
leadership, if confirmed, CS will continue to ensure that U.S.
companies, particularly small and medium-sized businesses,
benefit from global trade. Through CS's global network of trade
professionals in 109 U.S. cities, and in U.S. Embassies and
Consulates in 77 countries, CS staff will continue to work with
U.S. companies by providing counseling, advocacy and market
research, hosting and participating in trade events, and
identifying potential international buyers or partners. CS will
maintain its program focus on three priorities: increasing the
number of U.S. companies that export; helping smaller companies
expand into new export markets; and assisting exporters
overcome hurdles in foreign markets. In addition, if confirmed,
I will undertake a full review of CS' budget with a view to
ensuring that there is adequate funding for this critical
activity.
Q.2. What are your thoughts on the Government of China's
challenge at the WTO of eight U.S. antidumping and
countervailing duty determinations? How would you, if
confirmed, ensure adequate defense of these determinations and
would you enlist the assistance of other like-minded Nations?
A.2. I am committed to strong enforcement of our trade laws,
and to ensuring that domestic industries obtain effective
relief from unfair trade practices. Therefore, if confirmed as
Under Secretary, I will make sure that Commerce continues to
defend our rights to address unfairly traded imports to the
fullest extent, including with respect to these eight
determinations.
Q.3. I believe it is difficult to address our manufacturing
crisis without addressing our trade imbalance. In what ways do
you think the International Trade Administration can address
our trade deficit? What role do you envision for the position
of Assistant Secretary for Manufacturing and Services?
A.3. Manufactured products account for some 80 percent of U.S.
goods exports. It is critical that we expand export markets for
our manufacturers as a means to enhance economic recovery and
restore jobs. ITA brings a critical set of tools to this effort
including programs that help U.S. manufacturers become more
competitive, contribute to reduction of foreign barriers to
U.S. exports, increase the number of export-ready firms and
expand U.S. exports in key emerging market and sectors. If
confirmed, I will rely on the Assistant Secretary for
Manufacturing and Services to be the ``eyes and ears'' for ITA
in identifying key competitiveness challenges facing U.S.
manufacturing and to advise me on high impact programs and
policies that can enhance competitiveness.
------
RESPONSE TO WRITTEN QUESTIONS OF SENATOR CRAPO
FROM FRANCISCO J. SANCHEZ
Q.1. Please explain your views on the Industry Trade Advisory
Committees (ITACs) that currently assist the USTR and
Department of Commerce in developing our Nation's Trade policy.
A.1. The ITACs provide the Department of Commerce and Office of
the United States Trade Representative (USTR) critical
information and perspectives, which are used to develop U.S.
trade policy. Having an effective mechanism in place that
allows for a candid exchange between the private sector and
government is vital to formulating and implementing an
effective trade policy. If confirmed, I look forward to working
with Ambassador Kirk and the industry representatives who serve
as advisors on these committees.
Q.2. I understand that these Committees have proved to be a
valuable resource in securing trade agreements and policies
that benefit our Nation's industries. With this in mind, do you
have concern that opening these committees to additional and
varied interest groups might dilute their importance or impede
the free exchange of ideas within the committees?
A.2. The issue of where nongovernmental organizations (NGOs)
and other nonindustry stakeholders belong in the trade advisory
committee system needs to be resolved. However, I do not have
any preconceptions on this issue. If confirmed, I will use the
upcoming ITAC rechartering process as an opportunity to work
closely with USTR in finding the appropriate mechanisms with
which to reach out to and consult with NGOs and other
nonindustry stakeholders, and to determine if there are
opportunities to expand their participation in the trade
advisory committee system.
------
RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
FROM RAPHAEL W. BOSTIC
Q.1. Involvement with IndyMac--Mr. Bostic, you were an
independent director of two subsidiaries of IndyMac bank from
2005 to 2008. When IndyMac failed last year, it was at the time
the 3rd largest bank failure in U.S. history. You have been
named in a lawsuit against IndyMac, which alleges that the bank
committed fraud in its underwriting of mortgage loans.
Would you please explain what type of businesses the
IndyMac subsidiaries on whose boards you served were engaged in
and what role you had in overseeing those subsidiaries as a
director?
A.1. I was an independent director of IndyMac ABS and IndyMac
MBS, which were limited purpose finance subsidiaries that
executed securitizations of loans made by IndyMac Bank FSB. The
Bank originated loans based on its established guidelines,
determined which loans to aggregate into pools, and designed
the content of the specific securitizations. I never saw loan
pools or individual loans and did not discuss underwriting
standards, practices, or business strategies of the Bank. The
MBS and ABS subsidiaries purchased the loan pools and followed
SEC regulations to transform them into saleable securities
offered for sale to the secondary market through investment
banks. The chief responsibility of the ABS/MBS organizations
was to ensure that the registration documents and prospectuses
(certified by independent auditors) conformed to SEC rules,
indentures, statutes, and regulations. ABS and MBS did not
originate or underwrite loans, nor were they linked to IndyMac
Bank's decisions regarding underwriting standards, practices,
or business strategies. As an independent director, my job was
focused on seeing that the securitization process as a whole
conformed to SEC regulations. I relied on information provided
to me by management and employee board members and similarly
relied on management to oversee specific securitizations. The
ABS/MBS boards met only a few times a year, often virtually, to
deal with basic organizational issues.
Q.2. Federal Reserve's Regulation of Mortgage Lending--Mr.
Bostic, the Federal Reserve has been widely criticizing for not
exercising its authority under the Home Ownership and Equity
Act, or HOEPA (``HOPE-AH'') to issue rules to address well-
known abusive mortgage lending and advertising techniques
prevailing in the market place during the past decade. The Fed
did not issue rules until last year, well after the housing
bubble had burst.
Since you studied housing issues while you were an
economist with the Fed, could you give your view on why the Fed
was so slow to issue HOEPA rules?
A.2. There was not consensus among Board governors as to the
need to update HOEPA rules. As the late Governor Gramlich noted
in his book, there were serious discussions on these and
related issues, but he did not prevail in most instances. When
Gramlich resigned from the Board, no voice with his strength or
clarity emerged to carry that torch.
Q.3. Do you think the Fed's failure to issue new HOEPA rules in
a timely manner contributed to the ongoing problems in our
housing market?
A.3. Additional restrictions and limitations on the mortgage
market would have helped mitigate the negative outcomes to some
degree. However, the market has proven to be extremely nimble
in responding to restrictions. Research that I and co-authors
have recently [in the last few weeks] considered has shown that
the market adapts to legal strictures and finds alternative
products that achieve similar goals in terms of reducing
monthly mortgage payments and generating transactions. That
said, the research considers the entire market, and does not
account for the fact that not every broker or lender would
adapt. Thus, for some, there would have been benefits from more
proactive Fed issuance of new HOEPA rules.
------
RESPONSE TO WRITTEN QUESTIONS OF CHAIRMAN DODD
FROM SANDRA HENRIQUEZ
Q.1. Replacement of Public Housing--An ongoing policy debate is
the question of replacement of public housing units lost
through demolition, disposition or other revitalization
actions. When deciding how to replace these units, local
agencies are often called upon to balance the needs of
residents, unassisted eligible families, others in the
community, housing market composition, and available funding.
As Executive Director of the Boston Housing Authority, you have
likely encountered this question in the administration of HOPE
VI and other revitalization efforts.
What insights into this important issue have your
experiences at the BHA given you?
What principles or objectives do you think should guide
Federal and local policy in this arena?
A.1. Your question raises several important but competing
policy concerns in affordable and public housing. In Boston, we
have used successfully the HOPE VI funding to do mixed finance
redevelopment of some of our most distressed public housing
properties. Because we have no available additional land upon
which to build, the BHA has redeveloped units within the
existing footprint of the distressed property. Our policy has
been to diversify incomes in the new property, creating some
market rate units, while returning a significant portion of all
units as public housing or otherwise deeply affordable. We do
this to re-house as many residents of the distressed property
as possible (generally 75 percent to 80 percent). With
community support services, we work to grow the incomes of
returning public housing residents, rebuilding the former
community. In recent redevelopment efforts, whether with
Federal or State funds, the BHA tries to create as many or more
units than in the original development.
In order to balance further the needs of Boston's
unassisted eligible families, the BHA has partnered with its
sister agencies to increase affordable rental production, we
have converted tenant-based vouchers to project-based, to
provide deeper affordability for families and individuals. When
we do this, we require that for those project-based voucher
units, the developer/owner use the housing authority's waiting
lists to occupy them.
Based on my experience in Boston, I think that
redevelopment of public housing cannot be entirely
prescriptive. Housing Authorities should be leading
redevelopment efforts in their communities guided by (1)
returning to the marketplace, as many public housing units as
possible, in order to serve the same number of economically
eligible families; (2) providing other affordable housing
opportunities for those not returning to the redeveloped
property; (3) conducting an intense and ongoing participatory
process with residents, beginning with the decision to
redevelop, its implications for residents and the surrounding
neighborhood, design, relocation, supportive services delivery
and management policies and practices; and, (4) ensuring the
implementation of healthy homes and green building principles
in the construction of the property.
------
RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
FROM SANDRA HENRIQUEZ
Q.1. Public Housing Authorities--Ms. Henriquez, the Boston
Housing Authority, where you have been for the past 13 years,
is the largest public housing authority in New England. You
also served as President of the Council of Large Public Housing
Authorities.
How will you ensure that your decisions at HUD take into
account the effects on small housing authorities, which may be
different than the effects on large housing authorities?
A.1. As a public housing executive director, my specific
advocacy focused on HUD decisions as they affected large
housing authorities. At the same time, I have participated in
many forums that deal with all housing authorities--large,
medium, and small, advocating on issues that affected every
housing authority, regardless of size. If confirmed as HUD
Assistant Secretary I will look forward to engaging in vigorous
dialogue about the issues faced by our small housing
authorities and the potential solutions. Such communication is
essential since small housing authorities comprise a
significant number of our PHA clients. I intend to work with
them to ensure HUD's decisions take into account the
differences among our various-sized housing authorities.
Q.2. Funding of Public Housing Authority Programs--Ms.
Henriquez, in 2004 you co-authored an article criticizing HUD's
funding decisions for Section 8 programs and in 2007, in
testimony before this Committee's Housing Subcommittee, you
criticized HUD's decision to cut Hope VI programs.
Once you join HUD, how will you balance your concerns that
public housing authorities get the money that they need with
the reality that HUD's funds are limited?
A.2. If confirmed as a member of the Administration, I will
advocate for a stable, transparent, and predictable funding
environment for the Housing Choice Program. I intend fully to
represent the administration in its budget deliberations and am
prepared to make critical recommendations recognizing the
myriad of priorities managed by HUD and other agencies covered
by our Appropriations committee.
With regard to HOPE VI, the President's 2010 budget
requests $250 million for a new initiative called Choice
Neighborhoods that builds on the successes of the HOPE VI
program to transform neighborhoods of concentrated poverty into
functioning, sustainable neighborhoods. Housing authorities
will be eligible to apply for these grants, in the range of
$25-$35 million, to address the same types of developments that
were funded under the HOPE VI program. These funds will help
supplement the money housing authorities have already received
under the Recovery Act and the capital funding housing
authorities will receive as part of the FY09 Capital Fund
appropriation.
If confirmed, I intend to represent well the
Administration, and to work with Congress and HUD's various
stakeholders to ensure a full participatory process.
------
RESPONSE TO WRITTEN QUESTIONS OF CHAIRMAN DODD
FROM MERCEDES MARQUEZ
Q.1. Findings: 2007 Audit of the Los Angeles Housing
Department's (LAHD) Loan Portfolio Management--A 2007 City of
Los Angeles audit of the Department you began managing in 2004
found that the LAHD needed ``to significantly improve its
management controls to better manage its loan portfolio.''
Issues cited included concentrated risk among a relatively few
borrowers, lack of adequate information systems to track loan
performance, and inability to pursue maximum revenues through
collection procedures and timely review of certain borrowers'
financial statements.
The auditor also noted that LAHD's management concurred
with the findings, recognized the need for improvement, had
begun addressing some of the concerns, and had committed to
addressing the recommendations. A contemporaneous press report
quoted you as saying that ``The direction that the controller
goes in, I would agree with because it's the same direction
I've been going in for 3 years.''
Please respond to these audit findings for the record,
including: your view of these findings; what actions you took,
if any, to address these concerns; and whether these actions
provide you with experiences that will inform your work at HUD,
if confirmed?
A.1. I welcomed the audit as an opportunity to continue to
improve the department's performance and generally agreed with
the findings. In fact, my own department-wide assessment in
2004 found many of the same issues, and I initiated measures to
address the problems independently and before the audit
recommendations that were issued in the fall of 2007.
For example, my assessment showed revenue collection
through the timely review of borrower's financial statements
could not be completed with the existing staffing levels.
Therefore, in the fall of 2005 for the fiscal year
beginning July 2006, I fought for additional staffing for this
purpose. This staff has been on board since late 2006, but the
benefits of their work did not begin within the timeframe
audited. Moreover, one of the only audit recommendations I
chose not to implement was to conduct the review of borrower
statements biannually. Rather, we conduct them every year, and
this has led to a 514 percent increase in revenue generation
from this type of loan.
Since the tax credit scoring system requires experience for
an award, I addressed the issue of risk concentration from the
front end by expanding the pool of developers who applied to
the Department for funding. I worked to ensure that for-profit
developers, who previously hesitated to partner with the
Department, had confidence that an entrepreneurial approach now
existed at the Department.
Finally, with the exception of two items related to loan
write offs that the City Attorney's Office advised the
Department not to implement because that would have had the
effect of reducing the revenue collected by the Department, all
the audit recommendations have been implemented or in the case
of long-term information technology solutions are in the
process of being implemented.
I believe strongly that had I not initiated a department-
wide assessment immediately upon my arrival, additional and
significant findings would have been made. For example, Project
Clean House restored over $50 million in Federal funds to the
Department's loan accounts that had been sitting idle in
inactive or poorly designed projects. Like many of the other
issues at the Housing Department, this problem was rooted in an
unwillingness to look at programs and processes with fresh
eyes, and to then jettison moribund policies when necessary. I
hope to bring the same vision to CPD.
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RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
FROM MERCEDES MARQUEZ
Q.1. A 2007 audit report from the Los Angeles Controller
identified a number of problems in the way that the Department
of Housing manages its $735 million loan portfolio, such as
making new loans to borrowers who are in default on other
loans, failing to take action on delinquent loans, failing to
monitor compliance with loan covenants, failing to review
financial statements from residual receipt borrowers, and
failing to maintain an adequate loan tracking system. Although
some of these problems began prior to your tenure as General
Manager of the Department, the report included a number of
recommendations that it deemed to be in urgent need of
management attention. How did you address the Controller's
recommendations? If there were any recommendations that you did
not address, why did you decide not to address them? What steps
do you plan to take to prevent similar problems in the Office
of Community Planning and Development?
A.1. I welcomed the audit as an opportunity to continue to
improve the department's performance and generally agreed with
the findings. In fact, my own department-wide assessment in
2004 found many of the same issues, and I initiated measures to
address the problems independently and before the audit
recommendations that were issued in the fall of 2007.
For example, my assessment showed revenue collection
through the timely review of borrower's financial statements
could not be completed with the existing staffing levels.
Therefore, in the fall of 2005 for the fiscal year beginning
July 2006, I fought for additional staffing for this purpose.
This staff has been on board since late 2006, but the benefits
of their work did not begin within the timeframe audited.
Moreover, one of the only audit recommendations I chose not to
implement was to conduct the review of borrower statements
biannually. Rather, we conduct them every year, and this has
led to a 514 percent increase in revenue generation from this
type of loan.
Finally, with the exception of two items related to loan
write offs that the City Attorney's Office advised the
Department not to implement because that would have had the
effect of reducing the revenue collected by the Department, all
the audit recommendations have been implemented or in the case
of long-term information technology solutions are in the
process of being implemented.
I believe strongly that had I not initiated a department-
wide assessment immediately upon my arrival, additional and
significant findings would have been made. For example, Project
Clean House restored over $50 million in Federal funds to the
Department's loan accounts that had been sitting idle in
inactive or poorly designed projects. Like many of the other
issues at the Housing Department, this problem was rooted in an
unwillingness to look at programs and processes with fresh
eyes, and to then jettison moribund policies when necessary. I
hope to bring the same vision to CPD.
Q.2. In 2007, the Department of Housing allowed employees to
volunteer for Habitat for Humanity during work time. You
reportedly explained that the volunteer project was ``well
within [the Department's] mission.'' Do you consider
participation in similar volunteer programs to be within the
mission and job descriptions of HUD's Office of Community
Planning and Development? If so, what types of volunteer
programs are within the Office's mission and consistent with
its responsibilities? If you plan to encourage employees to
participate in similar volunteer programs at HUD during work
hours, will it be your practice to require them to make up
those work hours to fulfill the job responsibilities that they
were unable to complete while volunteering?
A.2. The Habitat for Humanity project represented a unique
opportunity for the department that is unlikely to be
duplicated at HUD. First, the Department was the project
sponsor and provided funding directly to the project, whereas
HUD typically does its work through State and municipal bodies.
This difference in mission and operational relationship to
projects gives the Housing Department, I believe, a closer
nexus to staff participation of this kind. In addition,
approximately one-third of the Housing Department is composed
of Code Enforcement staff, most of whom have a background in
construction. This uniquely qualified staff expressed a strong
interest in participating in the project and their work
contributed in a significant way to its success.
Q.3. In May 2007, the Los Angeles Times reported that the Los
Angeles Housing Department paid nearly $20,000 to bring in a
trainer to help Department managers ``center'' themselves
through breathing exercises and stick play. Did you find these
management seminars useful and do you plan to use similar
techniques at HUD? If so, please describe the types of seminars
that you anticipate using and estimate how much you expect to
include in your office's budget for programs of this nature.
A.3. Over a 2-year period LAHD managers participated in
training sessions focused on change-management/strategic
thinking. These sessions touched on strategic thinking,
handling conflict and change, strategic positioning, moving and
sustaining change within organizations, identifying
opportunities and leveraging strengths, and strategic planning.
The training focused in on the mission and actual work of LAHD
to teach these concepts. For example, the team produced the
first working outline of what would significantly contribute to
LAHD's proposal for the Mayor's 5-year Housing Plan.
The training also incorporated physical exercises that have
come to typify a significant percentage of Team Development
workshops (i.e., Outward Bound concepts) that use outdoor and
physical activity to help people work as a team building trust,
relationship, and learning to deal calmly with conflict without
avoidance.
This training was successful. However, I believe that it
was successful because it was tailored to the specific issues
faced by the Los Angeles Housing Department. 1 have no current
plan for any leadership training at HUD.
Q.4. Enhanced Reliance on Data--Ms. Marquez, in your written
statement, you described the initiative that Los Angeles
undertook to map the city to identify areas of greatest need.
Have you thought of similar ways in which HUD's Office of
Community Planning and Development might use enhanced data
analysis to determine where HUD assistance is needed most?
A.4. If confirmed, I will work in partnership with HUD's Office
of Policy Development and Research and the Chief Information
Officer to improve substantially the quality of HUD's mapping
capabilities. I understand that the Department is already
moving in this direction. HUD has made information available to
grantees on what neighborhoods are most at risk of foreclosures
and problems with vacancy in order to help jurisdictions plan
the most effective use of their first round of Neighborhood
Stabilization Program funds and to serve as a tool for
selecting target neighborhoods in the application process for
the second Neighborhood Stabilization Program funded under the
American Recovery and Reinvestment Act of 2009. That mapping
system can be linked from www.hud.gov/nsp. In addition, HUD is
moving forward with getting special tabulation data from the
U.S. Census Bureau showing housing needs with American
Community Survey data. HUD's plan is to begin updating these
data annually starting in 2010. If confirmed I will work to
make as much data as possible available in easy-to-use formats
so that grantees and the general public can quickly identify
both problems and opportunities for addressing needs for both
housing and community development.
Q.5. Avoiding Undue Interference with the Market--Ms. Marquez,
an article in The Nation last year noted your concern that
communities not be forced to rush into putting Federal aid
dollars to work buying up foreclosed properties. You were
quoted as saying, ``You don't want to get in the way of the
market.''
At HUD, what steps will you take to ensure that the local
governments in the communities with which you are working are
not displacing a functioning marketplace?
A.5. For Neighborhood Stabilization Program funds to have a
positive impact, they need to be spent in neighborhoods where
the housing market is not functioning. In those neighborhoods
hardest hit, the market is not able to absorb the number of
foreclosures and neighborhood stabilization activities have the
potential to stem, halt, and hopefully reverse the downward
spiral of foreclosure and abandonment that leads to crime,
blight, continued decline in property values, leading to
additional foreclosure and abandonment. In these neighborhoods,
targeted intervention can make a difference.
The competitive round of the Neighborhood Stabilization
Program will target neighborhoods in need of intervention, by
geographic targeting using HUD data a threshold requirement.
HUD requires applicants to analyze market conditions and demand
factors in the targeted neighborhoods that will consider the
potential for market absorption of foreclosed and abandoned
properties. As such, the competition is designed to ensure that
selected recipients will run programs that do not displace a
functioning marketplace. If confirmed, I will take steps to
make sure that recipients of both the formula and competitive
programs have the sufficient data tools, technical assistance,
and oversight to ensure that Federal dollars have a positive
impact.
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RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
FROM MICHAEL S. BARR
Q.1. Federal Reserve's Regulatory Role--Mr. Barr, one of the
key questions this Committee and the Administration will have
to answer as we consider regulatory reform this year is what
should be the role of the Federal Reserve. Some have suggested
that the Fed become a super-regulator, with broad authority to
regulate systemic risk. Others, however, have expressed
concerns that the Fed's ability to be an effective regulator is
undermined by its already large portfolio of responsibilities.
Do you have any concerns that the Federal Reserve presently
has too many responsibilities?
Do you think that it is appropriate to give the Federal
Reserve such a key role in our economy without restructuring
the Fed? For example, should the presidents of the Fed's
regional banks continue to be selected by the same banks the
Fed is supposed to regulate?
A.1. As the Secretary of the Treasury has laid out in his
outlines for comprehensive regulatory reform, he has made it
clear that one of the fundamental lessons of the current
financial crisis is that an independent government agency needs
to have responsibility to identify and reduce threats to the
stability of the financial system and must have all the
authority, focus, and discipline necessary and appropriate to
fulfill that responsibility. My understanding is the Department
of the Treasury will propose that this regulator needs to have
authority to regulate and supervise all systemically important
financial firms and payment and settlement systems and that
this regulator also needs to have authority to collect
information to detect emerging threats from systemically
important financial markets. As the Treasury weighs competing
proposals on how to structure comprehensive regulatory reform,
my understanding is that substantial attention will be given to
determining the right portfolio of responsibilities to accord
the Federal Reserve. Preserving the independence of the Federal
Reserve and ensuring the robustness of its supervisory function
will be a critical priority.
Problems of regulatory arbitrage, lax supervision, and gaps
in the system for prudential supervision have contributed
greatly to the current financial crisis. My understanding is
that the Treasury is undergoing an examination of the broad
regulatory architecture with a view to eliminating gaps and
opportunities for arbitrage, to better align the structure so
that accountability accompanies responsibility, and to promote
better governance.
Q.2. TARP--Mr. Barr, in Congressional testimony you gave last
year, you reflected on the nature of the Federal Government's
recent bailout efforts by noting that ``Ad hoc intervention is
no substitute for a system of financial regulation.'' The ad
hoc bailouts Treasury and the Fed have engineered during the
past year have not served our economy well.
If we are to avoid ad hoc interventions in the future,
however, we will need to address our ``Too Big To Fail''
Problem.
How serious is our ``Too Big To Fail'' problem and what do
you think is the best way to minimize it?
Do you think that banks that are considered ``Too Big To
Fail'' should be broken up?
A.2. As the Treasury Secretary has outlined in his proposals on
systemic risk, this crisis has made clear that certain large,
interconnected firms and markets need to be under a more
consistent, and more conservative regulatory regime. The new
regulatory regime cannot simply address the soundness of
individual institutions, but must also ensure the stability of
the system itself. We need to strengthen our system of
prudential supervision across the financial sector. We must
improve the quality of capital, ensure that we have better
measures of risk, and require that all firms build up more
capital during good economic times so that they have a more
robust protection against losses in down times, and can
continue to lend to America's households and businesses, big
and small, throughout the economic cycle.
In addition to imposing a more conservative regulatory
regime on the largest, most interconnected firms, it is also
important to have in place a resolution regime that permits the
government to resolve in an orderly fashion any financial
firm--no matter how large--whose disorderly failure threatens
financial stability.
While asset size is one characteristic of firms that could
pose a risk to our financial system, other characteristics
include the financial system's interdependence with the firm
and its relative role in the provision of credit and liquidity
to the economy. Strong steps must be taken to limit the risk
posed by these firms. For example, requiring a systemically
important firm to hold much higher levels of regulatory capital
helps to level the playing field and at the same time bolsters
the resources of the firm to support those risks.
Q.3. Fannie and Freddie have been held in government
conservatorship since September 2008 and billions of taxpayer
dollars have been needed to keep them in operation. The details
of the President's budget were released this week, including a
discussion on the future of GSEs, with options ranging from a
gradual wind down of their operations and liquidation of their
assets to returning Fannie and Freddie to their previous status
as GSEs that are shareholder owned organizations with a public
purpose. What are your views as to the future of Fannie and
Freddie? How will you advise the Treasury Secretary to proceed
as the December 31, 2009, deadline for Treasury's GSE MBS
Purchase Program and GSE Lending Facility looms closer?
A.3. The future of Fannie Mae and Freddie Mac will require
careful consideration of the appropriate role of the Federal
Government in the mortgage market. There are a number of
options to consider, and if confirmed I look forward to working
with Congress on evaluating those options.
The Treasury's GSE MBS Purchase Program was designed to
provide added confidence to the mortgage market, and Treasury's
GSE Lending Facility was designed to provide an ultimate
liquidity backstop. Since these programs were established, the
Federal Reserve has also established programs much larger in
size and scope to purchase GSE (and Ginnie Mae), MBS, and GSE
debt. As we move closer to the December 31,2009, expiration of
the Treasury programs, I look forward to evaluating the
continued need for the Treasury's program in light of current
market conditions, the program announced by the Federal
Reserve, and other ongoing or potential efforts in this area.
------
RESPONSE TO WRITTEN QUESTIONS OF SENATOR KOHL
FROM MICHAEL S. BARR
Q.1. The illegal Freezing and garnishment of federally exempt
funds from the bank accounts of recipients of Social Security,
SSI, and Veterans Benefits is a serious problem across
America--leaving many of our elderly and disabled citizens
temporarily destitute for weeks at a time. Treasury has been
working with the payor agencies, including the SSA and the VA,
Federal banking regulators, and representatives of recipients,
to develop a proposed Federal regulation that would resolve the
problem. However, despite our repeated requests, this
development process has not been completed. Can you commit to
getting this process completed in your first month as Assistant
Secretary for Financial Institutions?
A.1. I am fully committed to ensuring that Federal
antigarnishment statutes are given full force and effect, and
as one of my first priorities will work with colleagues in the
Fiscal Service at the Treasury, as well as with Federal benefit
agencies across the government, to complete the issuance of a
joint regulation to solve the problem of account freezes and
garnishment of protected funds. In addition, working with both
consumer advocates and Federal bank regulators, I am confident
that such a regulation will embody strong protections for
Federal beneficiaries without imposing burdens or shifting
liabilities to financial/institutions, which need better
Federal guidance on how to respond to garnishment and
attachment orders from State courts. Federal regulations and
consumer protections must evolve in response to new debt
collection tactics to protect the lifeline benefits of our most
vulnerable citizens.
Q.2. In addition to the illegal garnishment of exempt funds,
there are numerous other ways that both banks and other
financial service providers are depleting the benefits of our
workers and our veterans. High cost loans, payday loans, and
high bank fees, such as overdraft fees, are all currently
permitted to be taken directly from Social Security and other
benefit payments, which should be protected by law. We
understand that this has been a problem since Treasury first
wrote regulations under EFT 99 (the law passed in 1996
requiring Federal funds to be electronically deposited).
Although the Treasury initiated an inquiry about these issues
in 1998, nothing was done to ensure that these problems were
resolved. Can you commit to addressing this serious problem in
your first 6 months as Assistant Secretary for Financial
Institutions?
A.2. I believe that, as with account freezes and garnishment of
protected benefits, this problem can be addressed through the
joint efforts of the Treasury, Federal benefit agencies, and
Federal bank regulators. The Treasury can enhance its
regulations governing the routing of electronic Federal
payments to help ensure that benefits are not deposited with
third parties that deduct fees or loan repayments prior to
allowing beneficiaries access to their funds. The Federal
benefit agencies, in turn, must improve their policies and
practices designed to prevent the assignment of Federal
benefits to third party creditors and debt collectors.
Additional Material Supplied for the Record