Union Proposals Focus on Mortgage Crisis

The Laborers' International Union of North America has announced shareholder proposals that it terms "the most aggressive effort yet by any institutional investor" to protect workers' pension funds and restore accountability to the mortgage industry.The proposals focus on: helping investors understand mortgage securities risk by requiring disclosure of the types of mortgages bought and sold and their underlying value; limiting conflict of interest between rating agencies and mortgage buyers and sellers by requiring a cooling-off period before hiring key staff from financial services and mortgage holding companies; and enacting succession plans and executive compensation policies to deal with the likelihood that many chief executives will be replaced due to the mortgage crisis. "As many as 1 million residential construction workers will lose their jobs, up to 3 million homeowners face foreclosure, and hundreds of billions of dollars in shareholder value have been destroyed because of a system riddled with conflicts of interest, lack of disclosure, and lack of oversight," said Terence M. O’Sullivan, LIUNA general president. A "real solution" must also include legislative action and self-regulation by homebuilders, lenders, and rating agencies, he said.