In an organization as large as Washington Mutual, with the incentive system constructed as it was, that rewarded growth rather than quality, it was inevitable that certain people would coach borrowers to meet the minimums.
Coburn explains how the incentive structure led to fraudulent practices.
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We have something we call 'maintenance of effort' that we use in other programs, educational programs, when there is Federal money, we say to States, 'You have to maintain effort.'
the question is--and my advice to the Committee is to look at the roles that the Federal Government has taken over that would be better and more efficiently done at the State level.
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