January 11, 2010

The Financial Crisis Inquiry Commission holds its first hearing Wednesday to begin its bipartisan investigation into the causes of the crisis. The Chairman is former California Treasury Phil Angelides, a Democrat, and the Vice Chairman is former California Congressman Bill Thomas, a Republican who chaired the House Ways & Means Committee.

As Walter has previously noted, Angelides is one of the nation's most durable and influential allies of the securities class-action plaintiff's bar. On the plus side, Peter Wallison of the American Enterprise Institute is a member, and he called the collapse of Fannie Mae and Freddie Mac years before it happened. 

Top executives from Goldman Sachs, Morgan Stanley, J.P. Morgan Chase and Bank of America will be first in the dock (USA TODAY article, CNNMoney.com). We expect some political posturing at their expense.

The witness list for day two features state and local officials, including attorneys general, a panel entitled "Current Investigations into the Financial Crisis - State and Local Officials." Witnesses are Illinois Attorney General Lisa Madigan; Colorado AG John W. Suthers; Denise Voigt Crawford, Commissioner, Texas Securities Board and President, North American Securities Administrators Association; and Glenn Theobald, Chief Counsel, Miami-Dade County Police Department and Chairman, Mayor Carlos Alvarez Mortgage Fraud Task Force.

Madigan, a Democrat, sued Countrywide Home Loans for predatory lending practices, in 2008 reaching a settlement with its new owner, Bank of America. She is a proponent of an independent "consumer financial protection agency" -- think of it as a Consumer Product Safety Commission for financial services.

Attorney General Suthers, a Republican, has made mortgage fraud one of his high-profile issues.