Elizabeth Warren Shames Bank Regulators

Senator Elizabeth Warren hit the ground running in her first Banking Committee Hearing. She wasted no time lambasting the spineless regulators who are letting off the big banks with fines and slaps on the wrist instead of taking them to trial. Her goal was to expose the weakness of regulators who see fines as enough penalty for the crimes committed, and she pointed out that when these cases aren't taken to trial then no testimony of wrongdoing is ever put down on the record. So in effect, the bankers get off scott-free without any new information that congress could use to improve the banking system.

Marketwatch

“I want to note that there are district attorneys and U.S. attorneys who are out there everyday squeezing ordinary citizens on sometimes very thin grounds and taking them to trial to ‘make an example,’ as they put it,” she told bank regulators testifying at a Senate Banking Committee hearing. “I am really concerned that too-big-to-fail has become too-big-for-trial.”

. . . Warren acknowledged that trials are expensive but she insisted that if an agency is unwilling to go to trial it is because they are “too timid” or lack resources. She said that the consequence is that if large financial institutions can break the law and “drag in billions” in profits and settle, then they don’t have much incentive to follow the law.

“Every time there is a settlement and not a trial, it means we didn’t have the days and days and days of testimony about what those financial institutions were up to,” Warren said.

Senator Elizabeth Warren at the Feb. 14, 2013 Banking Committee Hearing titled "Wall Street Reform: Oversight of Financial Stability and Consumer and Investor Protections." The witnesses were: The Honorable Mary Miller, Under Secretary for Domestic Finance, U.S. Department of the Treasury; The Honorable Daniel Tarullo, Governor, Board of Governors of the Federal Reserve System; The Honorable Martin Gruenberg, Chairman, Federal Deposit Insurance Corporation; The Honorable Tom Curry, Comptroller, Office of the Comptroller of the Currency; The Honorable Richard Cordray, Director, Consumer Financial Protection Bureau; The Honorable Elisse Walter, Chairman, U.S. Securities and Exchange Commission; and The Honorable Gary Gensler, Chairman, U.S. Commodity Futures Trading Commission.