Lieber elucidates the point by telling the story of Cortney Munna, who lives in pricey San Francisco, makes $22 an hour and owes $97,000 to Citibank and Sallie Mae for her New York University diploma. She is a photographer’s assistant, and has no intention of going into a high-paying career in a field like finance. She is stuck, and her mother might end up selling off her bed and breakfast to rid her of debt.

Lieber’s story is particularly exceptional for making the argument others are loath to make: that Munna’s education was not worth it, and that she would have been better off dropping out and enrolling somewhere cheaper. Of course, on aggregate, people with college diplomas significantly out-earn those without them. And of course, it is impossible to calculate the value of time spent in school or of education for its own sake. But in Munna’s case, where a college diploma makes no difference in her earning potential in her chosen career, remaining in a pricey institution — New York University is the fourth most expensive out of the nation’s 1,800 private colleges — might not have been the right choice.

The company expects the mortgages to be rated AAA. But, BusinessWeek notes, “$67.3 million of the loans were to self-employed borrowers and $66.3 million didn’t require borrowers to document two years of their incomes and assets.”

All of us at Citi recognize that we would not be where we are without the assistance of American taxpayers. We are gratified that Citi has been able to repay their TARP investment in our company, with a substantial return, as well as create a significant increase in the value of their equity in Citi.

Still, that is not enough. We owe taxpayers a huge debt of gratitude for assisting us at a critical time. We are determined to repay this debt by continuing to build a strong company and contribute to America’s economic recovery.

Citigroup received a total of $45 billion in bailout funds during the worst of the crisis. It has repaid billions to the Treasury Department, which announced that it will sell off its Citigroup stock before the end of the year. The government owns nearly 30 percent of Citigroup shares, and stands to make a $7.5 billion profit if the stock stays up.

• On Tuesday morning, the committee holds a hearing with home loan executives from Bank of America, Citigroup, J.P. Morgan and Wells Fargo on “Second Liens and Other Barriers to Principal Reduction as an Effective Foreclosure Mitigation Program.”
• On Wednesday morning, the committee holds a hearing entitled “Housing Finance: What Should the New System Be Able to Do?” The witness list is not yet set.
• On Wednesday afternoon, the Subcommittee on Housing and Community Opportunity holds a hearing on “The Recently Announced Revisions to the Home Affordable Modification Program (HAMP).” The witness list is not yet set.

Some troubling data on the inadequacies of HAMP and the still-weak housing market form a backdrop to the hearings. Today, Bank of America reports that it has completed 33,000 mortgage-modifications, up 12,000 since March — it says it has now modified around a quarter of eligible mortgages. (Citigroup does better: It has modified more than half.)

But those positive statistics are overshadowed by a report from Lender Processing Services — a major mortgage processing company — showing that the inventory of foreclosed homes hit a “record high” in February. The number of delinquencies jumped 21 percent year-on-year. The report notes: “More than 1.1 million loans that were current at the beginning of January 2010 were already at least 30 days delinquent or in foreclosure by February 2010 month-end.” This graph shows the percentage of mortgages that are non-current or in foreclosure, month by month:

Prince opened his remarks with regrets. “I’m sorry,” he said. “I’m sorry the financial crisis has had such a devastating impact for our country. I’m sorry about the millions of people, average Americans, who lost their homes. And I’m sorry that our management team, starting with me, like so many others could not see the unprecedented market collapse that lay before us.” (The apologia deviated from Prince’s prepared statement, which read: “I can only say that I am deeply sorry that our management, starting with me, was not more prescient and that we did not foresee what lay before us.”)

Such candor was unexpected and, at least judging the faces of the commissioners, welcome. But hours of rationalization, blame shifting, and evasion followed during questioning that at times became heated. Indeed, while Rubin and Prince expressed regret in general, they refused to classify their own or any of Citigroup’s actions as anything other than mistakes made in the run-up to an unforeseeable bust.

The commissioners’ questions focused on mortgage-backed securities, the housing bubble, derivatives regulation, Citigroup’s losses and the problem of too big to fail. “I personally do not think Citi was too big to manage,” Prince said, a sentiment Rubin echoed. Prince said the “broad, multifaceted and diversified nature” of Citigroup’s investments and liabilities did not “materially contribut[e] to our losses.”

That statement jarred with Rubin’s testimony; he cited the interconnectedness of financial firms and financial products, which undercut diversification, as particularly destructive during the financial crisis. Asked why he did not recognize the extent of Citigroup’s liabilities until too late, the former Treasury Secretary defensively noted that Citigroup managed “trillions” of dollars every day and the best risk management the company could perform was to put the “right people” in place. He also called Citigroup’s risk management “robust and proactive.”

FCIC Chair Phil Angelides later pointedly asked Rubin, “Do you bear central responsibility for the near-collapse, but for the government, of Citigroup?” He replied that Citigroup’s board, which he led, was not “a substantive part of the decision-making process” at the firm. “All of us in the industry failed to see the potential for this serious crisis. We failed to see the multiple factors at work.”

However, for what one assumes are less than coincidental reasons, several banks who also received publicly disclosed TARP funds joined the Fed in its quixotic quest to keep quiet about who took the Fed’s money too. That group includes ABN Amro Bank, Bank of America Corp., The Bank of New York Mellon Corp., Citigroup Inc., Deutsche Bank, HSBC, JPMorgan Chase, US Bancorp and Wells Fargo. If it seems to the average layperson that these banks have already basically disclosed that they are among the beneficiaries of the Fed’s largess and haven’t suffered any ill effect, that might underscore Bloomberg’s reasoning that the Fed simply doesn’t want to be subject to any oversight rather than that there are major business concerns with the disclosure.

In particular, the appeals court ruled today that the Fed and the banks who mysteriously don’t want the Fed to disclose the banks that accepted their loans during the financial crisis failed to meet the standard set forth by the FOIA for keeping such information secret.

In its opinion today, the appeals court said that the exception applies only if the agency can satisfy a three-part test. The information must be a trade secret or commercial or financial in character; must be obtained from a person; and must be privileged or confidential, according to the opinion.The court said that the information sought by Bloomberg was not “obtained from” the borrowing banks. It rejected an alternative argument the individual Federal Reserve Banks are “persons,” for purposes of the law because they would not suffer the kind of harm required under the “privileged and confidential” requirement of the exemption.

In other words, the Fed argued that the individual Federal Reserve Banks which comprise the Fed are people, not banks, and thus covered by the law. Unlike the Supreme Court in Citizens United v. FEC, the appeals court rejected the idea that the banks are people or that they would be harmed by disclosing to whom they lent money.

The nine banks are: Citigroup Inc., Comerica Inc., Fifth Third Bancorp, Hartford Financial Services Group Inc., KeyCorp, Marshall & Ilsley Corp., PNC Financial Services Group Inc., Regions Financial Corp. and Suntrust Banks Inc.Increasing lending to consumers and small businesses was one of Congress’ stated goals when it passed the $700 billion financial bailout in October 2008.

That, however, has not been the result of the bailout. Despite the need, particularly among small businesses, for credit to keep businesses afloat or open new ones, opening the government coffers has yet to result in banks opening up their vaults to small business customers. In fact, six weeks after Obama called the 12 largest banks to the carpet about their small business practices, loan originations are down 35 percent. It’s like the banks don’t even care who is watching their behavior, as they already have what they want (the bailout) and didn’t have to do anything for it.

As part of its report, the Treasury Department announced it would no longer create a summary document to explain to people who don’t want to dig through spreadsheets what’s going on in the lending market. They called the reports “no longer meaningful.” What they may have meant was they don’t feel the need to make it easy for reporters to understand how little the banks are doing in terms of lending.

The topic at hand was Citigroup, which received $45 billion in cash and $310 billion in guarantees through TARP between October 2008 and January 2009.

More recently (last month, in fact), Standard and Poor’s granted Citigroup an “A” credit rating — three clicks higher than it otherwise would have given “to reflect the likelihood that if further extraordinary government support were needed, it would be forthcoming.” Oversight Chairman Elizabeth Warren today offered a translation: “In other words, Citi is too big to fail and this fact is now directly, measurably affecting its credit rating.”

Yet when Warren asked Allison what the taxpayers — who still own more than a quarter of the company — had received in return for that kind credit rating (which allows Citi to do business more cheaply), Allison didn’t directly respond. The exchange is telling:

Warren: The market clearly perceives that there is a too-big-to-fail guarantee, and the market is rating Citi higher because of that. That gives Citi an advantage in raising capital. That is very valuable to Citi, and it is potentially very costly to the American taxpayer. And I want to know if the American taxpayer gets paid for that.

Allison: There is no too-big-to-fail on the part of the U.S. government. And I can’t account for any statement that some outside agency may make.

Warren: I will take that as a no.

Congressional oversight committee chairwoman Elizabeth Warren told reporters today that the government’s hands are tied without the consumer protection agency for which Sen. Chris Dodd (D-Conn.) has sought a Republican backer, to no avail.

“[The Credit Card Accountability, Responsibility, and Disclosure Act] is a good first step but it isn’t enough alone,” said Warren on a conference call with reporters hosted by the U.S. Public Interest Research Group. “The credit card industry and the entire consumer credit industry is broken. We need an agency, a cop on the beat that is flexible and responsive.”

Unfortunately, too many senators seemingly disagree with her.

Ed Mierzwinski of the U.S. Public Interest Research Group does not. He thinks the fact that the Fed refused to take tough action against credit card companies’ regulatory evasions last year indicates they don’t have consumers’ best interests at heart and never will.

“The Fed could have had a broader anti-evasion provisions as well, which we all asked for in our comments and didn’t get,” said Mierzwinski. “The Fed gave us obvious protections against a couple of provisions but they should have given us a big hammer and they didn’t.”

But with the folks at the Fed seemingly set to cede some authority to the Treasury Department over banks as part of the larger financial oversight council, don’t bet on them agreeing to give authority to a new agency just because some people think consumers deserve protection. That’s not their job, and they prefer that it not be anyone else’s, either.

One real estate broker is already calling 2010 “the year of the short sale,” an industry term for selling something for far less than you paid for it. Banks save 20 percent over foreclosing on a house, between legal costs and the likelihood that a foreclosed-upon-house will sell for less than the mortgaged value, while homeowners agree to forfeit their homes rather than go through foreclosure and end up broke and out of a house anyway.

The Obama administration plans to offer $3,500 incentives to sell short in order to speed up the process of putting distressed homes on the market, and a Citigroup pilot program will give homeowners a whole grand to get out of their houses so Citigroup can sell them. Banks are pushing the short-sale incentives because of the “largely ineffective loan modification plans,” made ineffective by banks’ unwillingness to do more than temporary modifications or to approve applications. Apparently, rather than enforce the rules of the $75 billion program currently in effect, the administration has decided it’s easier just to let the banks sell the houses and get on with this economic recovery they say is already here.