The Fed proposes new rules for the mortgage industry.

The Fed proposes new rules for the mortgage industry.

The Fed proposes new rules for the mortgage industry.

A summary of what's in the major U.S. newspapers.
Dec. 19 2007 6:19 AM

House Rules

The New York Times, Los Angeles Times, and USA Todaylead with the Federal Reserve proposing new rules for the mortgage industry that seek to curtail a number of deceptive and abusive lending practices. The move marked a significant shift for the Fed that had been reluctant to impose widespread regulations on mortgage lenders, and had been widely criticized for not protecting consumers when it became obvious that these reckless lending practices had become commonplace. But the proposal, which could be approved with or without changes after a 90-day public comment period, was criticized by advocacy groups and Democratic lawmakers for not going far enough and favoring industry over consumers.

The Washington Postoff-leads the Fed proposal but leads with news that the House of Representatives overwhelmingly voted in favor of an energy bill that President Bush said he will sign today. For the first time in 32 years, Congress raised the fuel-economy standards for cars and light trucks, which will have to increase 40 percent to an average of 35 miles a gallon by 2020. The Wall Street Journal leads its world-wide newsbox with a look at the increasing role that independent political groups are playing in political campaigns. Over the past four years, these groups have more than doubled their spending while the national parties have cut back becuase of fund-raising restrictions. Their presence in the presidential race can already be felt in Iowa, where they're "whipsawing voters with a range of conflicting messages."

Advertisement

Some of the new rules proposed by the Fed would apply to all home loans, and some would be specific for the high-cost subprime mortgages that have been a big part of the current housing crisis. But the new rules won't provide any help for those currently in trouble as the Fed is merely "trying to prevent a repeat of what we've seen," a law professor tells USAT.Under the new rules, those that issue subprime loans would have to show that borrowers can realistically afford to pay. Lenders would also have to plainly disclose all the fees they get that are often hidden in the interest payments. Many said the rules are a step in the right direction but they don't go nearly far enough to protect consumers. The proposal "is riddled with loopholes and exceptions that will undermine its effectiveness," an advocate tells the NYT.

Democratic lawmakers were also quick to criticize the new Fed proposal and several vowed that Congress will work to pass stricter rules next year. Rep. Barney Frank, chairman of the House financial services committee, has the most quotable line that is picked up by several of the papers: "We now have confirmation of two facts. … One, the Federal Reserve system is not a strong advocate for consumers, and two, there is no Santa Claus. People who are surprised by the one are presumably surprised by the other."

The energy bill also mandates a five-fold increase in ethanol production by 2022 and aims to phase out the "famously inefficient 100-watt incandescent bulb," as Rep. Jane Harman put it, by 2012. Despite the strong support in the House, there was plenty of criticism to go around. Some contend the new mandated levels of ethanol production will make food more expensive. Democrats also said they weren't happy about being forced to drop initial provisions that would have subsidized alternative sources of energy, such as wind and solar, while reducing the tax breaks for oil and gas companies. But coming after a year of negotiations, most seemed to agree the bill at least makes some progress on reducing energy use as well as carbon dioxide emissions.

Surprisingly, the NYT chooses not to lead with its latest scoop on the destroyed CIA interrogation tapes. The paper off-leads word that at least four senior White House lawyers discussed the issue of the tapes with the CIA between 2003 and 2005. These lawyers included then-White House counsel Alberto Gonzales and his successor Harriet Miers as well as David Addington, who was counsel to Vice President Dick Cheney. But the NYT can't seem to get a consistent answer on what these White House lawyers advised the CIA to do. One former intelligence official said some in the White House strongly urged the CIA to destroy the tapes, but others deny that is true. Everyone does seem to acknowledge that there was never a direct order from the administration not to destroy the tapes.

The NYT also notes the two lawyers who told the head of the CIA's clandestine branch he could destroy the tapes informed the agency's top lawyer of their advice. It seems the lawyers expected that others would be consulted, but Jose Rodriguez ordered the tapes destroyed without informing either the CIA's top lawyer or the agency's director.

Everyone reports that a federal judge announced yesterday he will hold a hearing on whether the CIA violated a court order to preserve evidence when it destroyed the tapes. A few months before the tapes were destroyed, the judge issued an order requiring that the government preserve evidence in a case that was brought by a group of Guantanamo detainees. "Obviously, if accusations against our clients have been obtained by torture, their credibility would be seriously undermined," one of the lawyers for the detainees said.

The WP fronts its latest Iowa poll that shows the Democratic race is still up for grabs and highlights why the candidates are spending so much time and money trying to get supporters to show up at the caucuses on Jan. 3. The poll also shows that health care has replaced Iraq as the most important issue for voters. And on that note, the LAT fronts a look at how several of the campaigns have been scrambling to deal with the rise of "kitchen-table issues." This is particularly true of the front-runners, who were pitching themselves as wartime presidents and are now being forced to adjust their message as their competitors rise in the polls.

Still haven't started on the Christmas shopping? No need to worry; you'll have plenty of time this weekend. Nervous retailers are keeping their stores open longer to encourage shoppers. Many stores will be open before dawn and close in the early hours of the morning, but some are choosing not to close at all. One Macy's store plans to stay open from 7 a.m. Thursday until 6 p.m. Monday. "There's a lot of desperation out there," said a retail expert. "This is a weird, wacky holiday."

Daniel Politi has been contributing to Slate since 2004 and wrote the Today’s Papers column from 2006 to 2009. Follow him on Twitter.