Mr Cooper Group Inc (COOP)

[alexander77]

Written Statement of Kerry K. Killinger Submitted to the United States Senate
Permanent Subcommittee on Investigations
April 13, 2010

28 Pages
link: http://assets.bizjournals.com/cms_media/seattle/Kerry%20Killinger%20Written%20Statement%204-12-10.pdf

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_W/threadview?m=tm&bn=86316&tid=427103&mid=427103&tof=1&frt=2

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_W/threadview?m=tm&bn=86316&tid=426868&mid=426868&tof=6&frt=2

"I believe Washington Mutual should not have been seized and sold for a bargain price. There is no question that the Company sufferedfrom rising loan losses, but the Company was working its way through the crisis by reducing operating costs, raising over $10 billion of additional capital, and setting aside substantial loan loss reserves. The Company’s Tier I capital ratio was a strong 8.44% at the end of the second quarter of 2008. The Company also had an outstanding retail banking franchise that not only provided substantial core profitability but also would have been of enormous value to a number of potential acquirers.
When I left the Bank in early September of 2008, its capital greatly exceeded regulatory requirements for a well-capitalized bank. Deposits were stable, sources of liquidity appeared adequate, and our primary regulator, the Office of Thrift Supervision (“OTS”), had not directed us to seek additional outside capital or find a merger partner. It was with shock and great sadness that I read of the seizure and bargain sale of Washington Mutual on September 25, 2008. I recognize that policy makers and Regulators had no blueprint for dealing with the worldwide financial crisis that that developed in the aftermath of the collapse of Lehman Brothers. But I believe that Washington Mutual’s seizure was unnecessary, and the Company should have been given a chance to work its way through the crisis. I also believe it was unfair that Washington Mutual was not given the benefits extended to and actions taken on behalf of other financial services companies within days of the Company’s seizure, such as the following:
The FDIC’s insurance limit increase to $250,000;
The FDIC guarantee of bank debt;!
The Federal Reserve injection of liquidity and purchase of assets;
The Treasury Department announcement of favorable treatment of tax losses
Injection of capital into all major banks through the Troubled Asset Relief Program.
The unfair treatment of Washington Mutual did not begin with its unnecessary seizure. In July 2008, Washington Mutual was excluded from the “do not short” list, which protected large Wall Street banks from abusive short selling. The Company was similarly excluded from hundreds of meetings and telephone calls between Wall Street executives and policy leaders that ultimately determined the winners and losers in this financial crisis. For those that were part of the inner circle and were “too clubby to fail,” the benefits were obvious. For those outside of the club the penalty was severe.
In my view, the actions taken by policymakers reflect a vision of a banking industry dominated by large Wall Street banks. Consumer-based banks like Washington Mutual were not included in this vision, and consequently were not extended the same protections. I believe this was a mistake. I fear that consumers will ultimately pay the price of this vision through less competition, higher fees, and lower interest rates on their deposits."