Nobody Told Us

Yesterday Senator Warren rightly excoriated former Fed consumer regulator, now industry lawyer Leonard Chanin after he claimed that, prior to the 2008 crisis, the Federal Reserve Board had only anecdotal evidence that subprime mortgages were a problem. Mr. Chanin served for many years as counsel for the Fed's Consumer and Community Affairs division. In fact, three times a year, from 1996 until 2007, members of the Fed's consumer advisory council called for regulation of subprime mortgages.  The Fed held regular hearings where witnesses told Mr. Chanin and his colleagues that 1) subprime foreclosures were a serious and growing problem and 2) Congress gave the Fed legal authority to do something about it. Here are a couple of instances in which I can recall having personally warned them.