Sen. Kelly Loeffler and husband Jeffrey SprecherBill Clark/ZUMA
In October, Atlanta magazine asked Sen. Kelly Loeffler (R-Ga.), while she was running for reelection, what should be done for Georgians who, due to the COVID-19 pandemic, couldn’t pay rent and who might face eviction. Loeffler didn’t answer the question. And this month, she and the rest of the Republican Senate caucus left Washington without dealing with the looming eviction crisis, the expected rise in mortgage foreclosures, and the need for economic relief, as the spread of the coronavirus intensified. Yet while Loeffler has taken no steps in recent months to address these pressing matters, the Fortune 500 company run by her husband—in which she holds between $5 million and $25 million in stock—has sought to profit off the pandemic’s impact on the housing market and the mortgage industry.
Loeffler’s husband, Jeffrey Sprecher, is CEO of Intercontinental Exchange, which owns a variety of financial exchanges, including the New York Stock Exchange, and other financial businesses. The company is valued at close to $60 billion. Loeffler, who was appointed to to fill a vacant Senate seat in late 2019 and who now is in a run-off contest against Democrat Raphael Warnock, worked at Intercontinental Exchange for 16 years and left the firm at the end of 2018. She was a crucial part of its corporate team, according to a company press release that announced her departure: “Loeffler has played a role at every stage of ICE’s growth since joining the company in 2002. From its roots as a startup to becoming a Fortune 500 company, Loeffler, a member of ICE’s Executive Management Committee, has led all aspects of ICE’s investor relations, communications, marketing strategy, brand, digital platforms and sustainability efforts, among many other contributions.” She entered the Senate with an estimated fortune of $800 million, making her the richest member of Congress.
ICE is best known for its ownership of various exchanges, including futures exchanges in the United States, Canada, and Europe. But it also has a business that handles the processing of mortgages. This is the fastest growing part of the firm. And in recent years, ICE has pushed to digitalize the mortgage industry. This summer, pursuing dominance in the online mortgage business, Sprecher engineered an $11 billion purchase of Ellie Mae, a leading provider of software for originating mortgages.
Sprecher and ICE were taking advantage of the moment. As Fortune magazine observed, ICE was benefitting from two aspects of the pandemic: lockdowns prevented customers from heading to banks and law offices, and low interest rates brought about by the economic calamity caused a dramatic spike in refinancing of mortgages. “All at once, COVID hits, and we see everyone from lenders to lawyers to title insurers flocking to go to our digital platforms,” Sprecher told Fortune. “In part, it was that sea change that gave us the confidence to buy Ellie Mae.”
When ICE’s acquisition of Ellie Mae was announced in early August, Sprecher on a conference call told analysts that Ellie Mae’s revenue has grown rapidly partly because the pandemic had accelerated the adoption of its digital tools. A few days earlier, on a quarterly earnings call, Benjamin Jackson, the president of ICE, identified ICE’s mortgage services business as one of “the real near-term revenue growth opportunities that are right in front of us that we’re already capturing…especially with COVID.”
At a conference in September, Jackson pointed out that ICE’s corporate leaders thought the firm’s effort to digitalize the mortgage process would be a “10-year journey” but that the “unfortunate backdrop of COVID” accelerated the process and “gave us the conviction” to go ahead with the gargantuan Ellie Mae deal. In October, Jackson observed that due to the pandemic, “you’re seeing people purchasing new homes to get more space, to get a pool, transitioning out of cities into suburbs” and that “just affirms our view that we had going into this [Ellie Mae] transaction what the opportunity is with this business.” Evaluating Sprecher’s purchase of Ellie Mae, Forbes observed that “low mortgage rates and geographic shifts created by the pandemic may give the housing market years of pent up activity for Ellie to service.”
While her husband was taking advantage of the pandemic’s effect on the housing market to advance ICE’s grand plan to gain control of the digital mortgage service sector, Loeffler has done little to address the housing and economic crises triggered by the coronavirus. In the spring, she unveiled a proposal “to restart our economy safely.” It was a hodgepodge of mostly conservative ideas, such as eliminating payroll taxes for the rest of 2020 and cutting regulations for new businesses, and reform measures related to the first wave of pandemic relief already passed. One section did note, “Families are having difficulty affording their mortgage or rent.” But Loeffler’s plan included no provisions regarding mortgage or rent relief or eviction moratoria.
The issues page of her re-election campaign website contains no reference to the pandemic, the economic hardships caused by COVID-19, or the eviction and mortgage crises. The out-of-date “Jobs and the Economy” section proclaims, “Thanks to bold conservative leadership on the state and federal level, our unemployment rate in Georgia—and throughout the country—is at historic lows… As a businesswoman and political outsider, Kelly is working in Washington to advance pro-growth policies that keep our state and country moving in the right direction. She is proud to champion President Trump’s economic agenda to Keep America Great!”
In July, Loeffler noted her opposition to extending assistance to Americans hit hard by the coronavirus recession: “I am not seeing a big need to extend the federal unemployment insurance.”
More recently, Loeffler, like her fellow Senate Republicans, has not said much (or anything) about the looming eviction and foreclosure crises. In September, the Centers for Disease Control imposed a moratorium on residential evictions for people making less than $99,000 a year (or $198,000 for a couple). It ends on December 31. Other economic assistance benefits from the CARES Act that was passed in March also expire at the end of the month, including certain unemployment benefits that could affect millions of people and their ability to pay rent or mortgage bills. Also, mortgage forbearance provisions in the CARES Act are scheduled to end in March 2021. All this and more—including the accelerating spread of COVID-19—are likely to lead to a spike in mortgage foreclosures and evictions. But the new “wave of foreclosures,” Millionacres, a Motley Fool service, pointed out, will likely lead to a real estate buying spree. That could be good news for Sprecher and ICE, given the company’s acquisition of Ellie Mae. And ICE will continue to benefit, if the pandemic real estate market remains as strong as it has been.
Loeffler and Sprecher’s financial actions have generated controversy on another front. In January, after she attended a private Senate briefing on the coronavirus threat, she and her husband made a series of stock sales. This included buying stock in firms that develop teleworking software. They subsequently sold off $18.7 million shares in ICE and also dumped shares in retail outlets. Once news of these trades emerged, Loeffler denied exploiting confidential information she had obtained as a senator. The Senate Ethics Committee stated it found “no evidence” she had violated the law or Senate rules. By the way, Loeffler sits on the Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission, which regulates ICE. (Sen. David Perdue, a Republican campaigning alongside Loeffler in Georgia’s other run-off election on January 5, was also snared in a stock-selling scandal. At least one case of his personal wheeling-and-dealing was investigated by the feds, but no charges were filed.)
The Loeffler campaign did not respond to a request for comment about her investment in ICE, the Ellie Mae deal, and the company’s effort to capitalize on the pandemic.
In August, Forbes reported that Loeffler, thanks to her stock deals, had become “a poster child for Washington swampiness.” Yet her ongoing relationship to ICE perhaps illustrates a deeper issue. With her husband at the helm and with a large chuck of ICE shares within her personal portfolio, Loeffler stands to gain if the company succeeds in exploiting pandemic conditions to expand its hold on the digital mortgage business. The coronavirus crisis afforded ICE and her husband a huge opportunity, and they took an $11 billion leap with the Ellie Mae deal. So far, Loeffler has been far stingier when it comes to Georgians and other Americans for whom the pandemic means nothing but loss and misfortune.
