Bill & Ted
Orange,#2Consumer Comment
Sat, October 22, 2005
3:27 PM PDT, October 20, 2005 Ameriquest Founder Hits Snag in Bid for Ambassadorship By Johnathan Peterson, Times Staff Writer WASHINGTON -- The nomination of Roland Arnall for ambassador to the Netherlands hit rough water on Capitol Hill today as some lawmakers advised the founder of Ameriquest to resolve his Orange County mortgage firm's problems with U.S. regulators before turning to international diplomacy. Comments by Sens. Paul Sarbanes (D-Md.) and Barack Obama (D-Ill.) at a hearing of the Foreign Relations Committee underscored the political sensitivities that surround Arnall and Ameriquest, which has been accused of unfair practices in its business of lending to borrowers with weak credit. ADVERTISEMENT The Orange, Calif.-based lender is in settlement negotiations with about 30 states attorney general and banking regulators. "I'm pressing here this morning to try to get this matter fully resolved and settled," said Sarbanes, hinting that he might move more forcefully to block Arnall's nomination in the future. "I want you to understand what the concerns are. It seems to me the ability to resolve it is essentially in your hands." Arnall defended Ameriquest as a "great company," and said he took full responsibility for past missteps. "Some of our employees did not do the right thing. When we found out, they were let go and action was taken so it wouldn't happen again," he said. Arnall said he was not personally involved in the settlement talks, but believed with "total candor and from the bottom of my heart" that his management team was well qualified to finalize an accord with the state regulators. The Senate grilling was an unusual moment for Arnall, 66, a Hungarian-Jewish refugee from World War II who migrated to Montreal and Los Angeles, where he launched the biggest subprime lending company in the United States and gained a personal fortune estimated at about $2 billion. Arnall has long cultivated friends in both political parties and until now has been able to conduct most of his professional affairs out of the public spotlight. While a committee vote on his nomination could come next week, the pointed questions suggested that the process is about to slow down. Arnall and his wife, Dawn, have emerged in recent years as among the leading financial backers of President Bush, California Gov. Arnold Schwarzenegger and Republican causes. The president nominated Roland Arnall on July 28 for the Dutch ambassadorship, which requires confirmation by the Senate. The Senate Foreign Relations Committee has not yet scheduled a hearing. Ameriquest maintains that it adheres to a series of "best practices" to ensure fair treatment of customers, but it has repeatedly been the target of lawsuits involving charges of deceptive lending practices. Without admitting wrongdoing, Ameriquest recently agreed to pay as much as $50 million to settle a class-action lawsuit representing borrowers in California and three other states, and it has earmarked $325 million to settle concerns raised by a task force of regulators from 30 states. -------------------------------------------------------------------------------- Times staff writer E. Scott Reckard contributed to this story.