Operation HOPE Founder and U.S. President's Advisory Council on Financial Literacy Vice Chair John Hope Bryant Announces Growing Support for Committee's Work at FDIC Forum on Mortgage Lending for Low- and Moderate-Income Households

John Hope Bryant, Operation HOPE (HOPE) Founder and CEO, who also serves as Vice Chair of the U.S. President's Advisory Council on Financial Literacy (the Council), publicly released the first industry endorsements of the Committee-approved report, as well as key statements of support for the overall work being undertaken by the Council Committee on the Under-Served and its special initiative on "the future of responsible mortgage sub-prime lending" at the "FDIC's Forum on Mortgage Lending for Low- and Moderate-Income Households" in Arlington, VA.

Bryant said at the Forum, "Today Wells Fargo has become the first major U.S. bank and mortgage lender to step up, endorse and embrace the make-sense recommendations from the Committee's report, placing financial literacy at the center of their future mortgage lending process for borrowers deemed less than prime. I personally commend and applaud Wells Fargo for taking this action. By their actions and initiative here, they are showing that they are a financial institution worthy of some measure of admiration and respect. Cara Heiden, co-president of Wells Fargo Mortgage, said in their public statement on July 8th, 2008, "We support the Council on Financial Literacy and the Committee's recommendations noted in 'the future of responsible sub-prime lending.'" Their statement continued, "We agree with the Council that financial literacy should serve as a foundation to all responsible sub-prime lending and understand the Council is continuing its discussions. We look forward to their final determination."

Bryant continued, "Wells Fargo and Cara Heiden, co-president of Wells Fargo Mortgage, deserve special leadership credit here. As far back as 2003, they worked to stop practices that weren't responsible for the borrower. As just one example, they went on to require Wells Fargo to send a letter to every approved, broker-supplied sub-prime loan applicant, where the bank thought the borrower may qualify for a prime-priced offering. They sent this letter, copying the broker, advising the borrower that they may qualify for better rates and terms . Cara's co-president at Wells, Mike Heid, is also a respected leader in the mortgage industry, and together Mike and Cara have made a real commitment to integrate financial literacy into various phases of Wells' mortgage lending process. This is significant, and benefits the under-served community that our Council Committee and Operation HOPE are so passionate about. I commend them."

Banco Popular also fully endorsed the Committee-approved report and the bank's CEO, Roberto Herencia, spoke at the FDIC Forum.

The Housing Policy Council of the Financial Services Roundtable issued a statement of support, saying, "HPC supports the mission of the Committee which is to ensure that responsible sub-prime lending continues in the future." HPC continued, "We applaud the efforts of the Committee to reinvigorate the sub-prime market through responsible lending practices and improved financial education for consumers."

Director John Reich, director of the U.S. Office of Thrift Supervision, issued a statement of support, saying, "The OTS strongly supports initiatives and policies that foster financial literacy, informed consumers, and high standards of business conduct throughout the financial services industry. Consistent with these objectives, I strongly support the efforts of the President's Advisory Council on Financial Literacy and the Committee on the Under-Served to develop a range of practices and policy recommendations for responsible sub-prime lending. The statement continued, "The OTS is committed to lending our support to this important work. Senior members of my staff have participated in discussions, including the May 28th meeting of the Committee on the Under-Served. We remain available for additional discussions and assistance as needed."

U.S. Comptroller of the Currency John C. Dugan issued the following statement after the FDIC's Forum on Mortgage Lending for Low- and Moderate-Income Households: "Today, I had the opportunity to participate in the FDIC's Forum on Mortgage Lending for Low- and Moderate-Income (LMI) Households. At the Forum, many good ideas were discussed to encourage responsible LMI mortgage lending, including the recommendations of the Committee on the Underserved of the President's Advisory Council on Financial Literacy. As I indicated when I recently addressed the Committee, I believe the key elements of a responsible mortgage lending product geared at LMI populations should contain four elements: (1) the product should be easy to understand and have disclosures that convey key elements of the transaction to the consumer; (2) lenders should qualify borrowers based not just on their capacity at the initiation of the transaction but over the life of the loan; (3) borrowers should have some equity in the transaction and be required to make a down payment using their own funds; and (4) the credit underwriting analysis should be flexible enough to evaluate "thin file" borrowers who can demonstrate their ability to repay recurring non-credit related obligations in a timely manner. I support the efforts being pursued by the FDIC and the President's Advisory Council on Financial Literacy to ensure that mortgage products remain available for Americans of all income levels with the desire and capacity to become homeowners."