FDIC statement regarding Sheila Bair’s dealings with Bank of America

Introduction

In response to inquiries from the Huffington Post Investigative Fund about FDIC chair Sheila Bair’s dealings with Bank of America, Andrew Gray, Director of the FDIC Office of Public Affairs, provided the following statement on Jan. 15, 2010:

“In July and August of last year, Chairman Bair received two market rate mortgages under standard terms and conditions to refinance her former primary residence in Amherst, MA and to purchase a home in the District of Columbia (a 30 year fixed rate mortgage at 5.625% for a conforming loan for the Amherst residence and 6.00% for a jumbo loan for the DC residence) from Bank of America. The LTVs were 45.9% for the Amherst residence and 77% for the DC residence respectively. The Freddie Mac survey rates for 30 year fixed rates at the time were 5.26% for a conforming loan and 6.04% for a jumbo loan. Her husband contacted two lenders using names provided by the real estate agent.

FDIC reporting requirements dictate that Chairman Bair would provide this information on her financial disclosures beginning in the 2010 reporting period of January through May. In addition, she would have been required to seek a waiver from the FDIC’s Ethics Office had the board acted on a matter involving Bank of America from the time that she and her husband began contacting lenders about mortgages. In reviewing this matter, the FDIC’s Chief Ethics Officer has determined that the Chairman did not engage in any action which would create a conflict of interest or appearance of a conflict of interest.

This is a non-story fabricated without respect to the facts. Bank of America’s primary regulator is the OCC. The FDIC has back up authority of every insured institution in the country by virtue of its insurance function. To suggest that she shouldn’t get a mortgage from Bank of America would suggest that she shouldn’t be able to obtain a mortgage period.”