Bank of America will have to turn over all documents and records tied to Countrywide Financial's VIP lending program after House Oversight Committee Chairman Darrell Issa (R-Calif.) issued a subpoena for them Wednesday.
Issa announced the far-reaching subpoena, his first as chairman of the panel, and made clear that he wanted to know specifically what public employees or elected officials may have benefited from the program.
Issa is looking for all documents about the program, and is particularly interested in what "covered borrowers" were involved with the program.
That term refers to any borrower or borrower's spouse who was at the time the loan was issued a current or former employee of a government agency, member of Congress or employee of Congress, employee of Fannie Mae or Freddie Mac, or an employee of a state or local government.
"Countrywide orchestrated a deliberate and calculated effort to use relationships with people in high places in order to manipulate public policy and further their bottom line to the detriment of the American taxpayers even at the expense of its own lending standards,” said Issa. "The American people have a right to know the totality of who participated in the Countrywide’s VIP program and what they did in return for access to it.”
Bank of America purchased Countrywide, which was failing financially, in 2008.
This is not the first time Countrywide's lending practices have come under Congressional scrutiny. The Oversight Committee, then chaired by Rep. Edolphus Towns (D-N.Y.), probed the bank's "Friends of Angelo" program for government officials in the last Congress.
The Senate Ethics Committee examined and ultimately cleared retired Sen. Chris Dodd (D-Conn.) and Senate Budget Committee Chairman Kent Conrad (D-N.D.) for receiving loans through the program. Both lawmakers denied any wrongdoing and said they did not ask for preferential treatment.
"Angelo" is a reference to Angelo Mozilo, Countrywide's former CEO.