Elizabeth Warren typical Democrat

$1.3M loophole for Elizabeth Warren

WASHINGTON — A loophole in a federal financial disclosure law for members of Congress let U.S. Sen. Elizabeth Warren — a strident critic of big banks — withhold information about a high-limit line of credit against her Cambridge home with one of the country’s largest banks.

Federal law requires members of Congress and other federal 
officials to annually disclose their financial assets and liabilities, including mortgages. In a form filed last week, Warren stated she and her husband, Bruce Mann, had no debt liabilities in 2014.

But according to a Middlesex South Registry of Deeds record, Bank of America holds a $1.3 million mortgage on the Cambridge home owned by Warren and Mann.

An aide for Warren said the amount represents a home equity line of credit, not a mortgage.

According to the aide, a line of credit does not trigger reporting requirements if the borrower has not borrowed on it, or if the amount owed is less than $10,000. Warren’s account had a zero balance, the aide said.

Still, experts said one of the purposes of the STOCK Act, passed in 2012 and championed by former Bay State U.S. Sen. Scott Brown before Warren unseated him, was to prevent lawmakers and other federal officials from benefiting from lower interest rates or other financial industry perks not available to members of the general public. But a loophole — the act’s failure to mention lines of credit — let Warren keep her interest rate and other information about the home equity line private.

The law was proposed to 
address the political loan scandal in 2007 in which several members of Congress received preferential terms on their home loans from Countrywide Financial and other banks. Countrywide, which was later found liable for selling bad loans and defrauding government-controlled Fannie Mae and Freddie Mac, was purchased by Bank of America in 2008.

Last year, Bank of America was ordered to pay nearly $1.3 billion in civil penalties for Countrywide’s fraud.

The bill stalled in the Senate until 2012, when Brown was caught on live television after the president’s State of the Union address urging President Obama to help the law move in the Senate. Obama responded by agreeing to “get it done” and signed the bill into law soon after.

The only way for watchdogs, members of media and the public to know if lawmakers benefit from sweetheart deals from the financial industry is to have strong reporting requirements, watchdogs say.

Before the law passed, “financial disclosure requirements for members of Congress did not include home mortgages,” said Craig Holman, government 
affairs lobbyist for Public Citizen.

“It really cast an inaccurate picture of the wealth of members 
of Congress.”