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MP rallying support for asset-backed loans probe
Liberal wants voice for consumers hurt by crisis

Mar 15, 2008 04:30 AM

Rita Trichur
Business Reporter

Liberal finance critic John McCallum is urging other members of the House of Commons finance committee to heed the request of a B.C. couple and hold hearings on why non-bank asset-backed commercial paper was sold to Canadians.

Key opposition members confirmed yesterday they would support his request and urge their peers to do the same when meetings resume in two weeks.

McCallum's notice of motion asks the committee to "hold at least 12 hours of hearings" on the asset-backed-credit crisis, including testimony from "severely affected Canadians, representatives from the real estate sector and others."

The hearings should determine "whether federal regulators and other stakeholders could have done a better job in anticipating the crisis and/or reducing its costs; and what action the federal government, federal regulators and other stakeholders are taking so as to reduce the likelihood of experiencing a similar crisis in the future," McCallum wrote.

Committee members are expected to vote on the proposal at their next sitting on March 31.

McCallum's motion follows a letter from Mike and Wynne Miles of Victoria this week, beseeching members to hold hearings.

"It gives us some hope," Wynne Miles said in an interview. "We very much want to have an opportunity to explain to people, especially government officials, how this freeze of our retirement savings has affected our life."

She said hearings could give the government "some feeling of the emotional and financial stress this puts on us."

The Mileses claim to be among 1,400 ordinary investors with savings entangled in the frozen notes.

Wynne Miles also expressed concern the committee in charge of the Montreal Accord does not represent the interests of ordinary investors. The committee, led by Bay Street lawyer Purdy Crawford, is attempting to convert short-term debt into longer-term notes. Miles said ordinary folks can't wait seven to 10 years for their money. Crawford has previously said those who reject the deal would be "on their own."

MPs, however, are increasingly concerned about the plight of ordinary investors, Conservative Ted Menzies said. "I think we should have a serious look at this."

Those sentiments were echoed by the NDP's Thomas Mulcair. "These people, a lot of them are losing everything. And so we're going to try to get to the bottom of it," he said. "A lot of the individuals, they didn't even know their (money) was being put into these vehicles."

Meanwhile, the Crawford committee plans to file an application in Ontario Superior Court under the Companies' Creditors Arrangement Act on Monday. It wants the court to call a meeting of note-holders to vote on its plan to restructure 20 of the affected trusts, involving some $32 billion of notes.

"Given the progress we have made in resolving the outstanding issues, and the good relations with all stakeholders, we ... are confident we will be able to submit a plan for a comprehensive and simultaneous restructuring of all affected ABCP that will be of benefit to all noteholders," Crawford said yesterday.
 

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