Bank signals cooperation with VIP probe

Bank of America has signaled that it would cooperate if
Congress subpoenaed details of a VIP loan program that doled out
cut-price mortgage deals to senators and other government officials.

In
a written response to questions from Rep. Darrell Issa (R-Calif.),
ranking member on the House Committee on Oversight and Government
Reform, the bank said it would not respond without subpoena. The
committee has not issued a subpoena so far, and Issa’s letter seeking
information came without the signature of committee Chairman
Edolphus Towns (D-N.Y.).

Issa is looking into the “Friends of
Angelo” VIP program at Countrywide, a subsidiary that BoA acquired last
year, which offered lower fees and rosier mortgage terms to government
officials, including Democratic Sens. Chris Dodd (Conn.) and Kent
Conrad (N.D.). Issa is seeking eight years’ worth of records, between
2000 and 2008, related to the loan program named after Countrywide’s
former CEO, Angelo Mozilo.

{mosads}Steven Ross, an Akin Gump lawyer and counsel to Bank of America, wrote to Issa on June 18 that the bank would consider providing information about beneficiaries of the VIP program that Issa is seeking. Issa released the letter late Tuesday.

“The bank’s practice has been to provide confidential customer information only pursuant to subpoena, whether that request comes from law enforcement, Congress or other governmental bodies,” Ross wrote. “I should note that the bank routinely cooperates with law enforcement and investigating committees, providing customer-related information pursuant to subpoena.”

Issa has asked Towns to issue a subpoeana, but a spokeswoman for Towns recently told The Hill that the chairman was focused on separate matters, including “the financial crisis and stimulus oversight.” A subpoena would have to be called for by the full committee. Towns’s spokeswoman could not be reached late on Tuesday evening.

“Since receiving Bank of America’s response, I have engaged in constructive conversations with Oversight and Government Reform Committee Chairman Edolphus Towns about issuing the subpoena that Bank of America has indicated it needs to fully cooperate with our investigation,” Issa said in a statement. “I am committed to shedding needed scrutiny on the role that influence buying by Countrywide played in the erosion of lending standards and regulation that led to the financial crisis.”

The government officials have denied wrongdoing. But the program continues to dog Dodd in particular, who is facing a challenging reelection campaign.

The Senate Ethics Committee is conducting its own investigation into the VIP program. Meanwhile, the Securities and Exchange Commission (SEC) recently charged Mozilo with fraud and insider trading, but it’s unclear if the SEC investigation will reach into the VIP program.

“Our investigation has uncovered evidence that only a fraction of those who participated in Countrywide’s VIP program have come to light,” Issa said. “The American people deserve to know the extent that special benefits co-opted public servants who were supposed to be watchdogs of the mortgage industry.”