Sen. Elizabeth Warren slams Republicans: Worry less about helping big banks

By Eric W. Dolan | RAW Story
Tuesday, March 12, 2013


Democratic Sen. Elizabeth Warren of Massachusetts slammed Republicans on Tuesday for holding up the confirmation of Richard Cordray to be director of the Consumer Financial Protection Bureau.

At a Senate Banking Committee hearing, the progressive senator suggested Republicans were using false arguments to fight the nomination of Cordray. Warren, who was a key figure in setting up the relatively new agency, questioned why Republicans believed it was wrong for the CFPB to have a single director, but was acceptable in the case of numerous other agencies like the Office of the Comptroller of the Currency.

“I see nothing here but a filibuster threat against Director Cordray as an attempt to weaken the consumer agency,” Warren said. “I think the delay in getting him confirmed is bad for consumers, it’s bad for small banks, bad for credit unions, for anyone trying to offer an honest product in an honest market.”

“The American people deserve a Congress that worries less about helping big banks, and more about helping regular people who have been cheated on mortgages, on credit cards, on student loans and on credit reports,” she added.

The Consumer Bureau was created by the Dodd–Frank Wall Street Reform and Consumer Protection Act to regulate financial services such as mortgages and credit cards. The agency issued new rules to restrict high-risk home loans in January and began looking into predatory private student lenders in February.

Senate Republicans previously blocked Cordray’s confirmation to the CFPB in 2011, but Cordray later became the director of the agency through a recess appointment. Republicans have called for the agency to have significantly reduced powers, claiming it currently lacks proper oversight.

Watch video, uploaded to YouTube by Sen. Warren, below:

Bernanke tells Warren ‘too big to fail’ banks ‘will voluntarily reduce their size’

By Stephen C. Webster - RAW StoryWednesday, February 27, 2013

The Chairman of the Federal Reserve looked mighty uncomfortable Tuesday being grilled by Sen. Elizabeth Warren (D-MA), a former Harvard professor and economics expert who posed one very blunt question to him that many Americans have been asking for years: “When are we going to get rid of too big to fail?”

His response: “Banks will voluntarily reduce their size” over an undetermined amount of time.

At the Senate banking committee hearing on monetary policy, Warren stressed that small banks are being crushed by interest rates while big banks have made billions from secret, low-interest Federal Reserve loans since the crash of 2008.

“So I understand that we’re all trying to get to the end of too big to fail, but my question, Mr. chairman, is until we do, should those biggest financial institutions be repaying the American taxpayer that $83 billion [yearly] subsidy they’re getting?” she asked

Bernanke said the aid to big banks through cheaper loans came about because of “market expectations” in 2008 that are no longer correct. “We have an orderly liquidation authority,” he said. “Even in the crisis, in the case of AIG, we wiped out the shareholders.”

Warren stopped him there. “Excuse me though, Mr. chairman, you did not wipe out the shareholders of the largest financial institutions, did you? The big banks?”

“We didn’t have the tools, now we could,” Bernanke insisted.

Moments later, Warren doubled back again. “We’ve now understood this problem for five years,” she said. “When are we going to get rid of too big to fail?”

“Well, as we’ve been discussing, some of these rules take time to develop,” Bernanke said. “The orderly liquidation authority, I think we’ve made progress on that. We’ve got the living wills. I think we’re moving in the right direction. Um, if additional steps are needed then Congress obviously can discuss those, but we do have a plan and I think it’s moving in the right direction.”

“Any idea about when we’re going to arrive in the right direction?” Warren asked.

“It’s, it’s, it’s gonna take…” Bernanke stammered. “It’s not a zero-one thing, it’s over time you’ll see increasing, uh, increasing market expectations that these institutions can fail. I would make another prediction, and predictions is always dangerous, that the benefits of being large are gonna be sm– are gonna decline over time, which means that banks will voluntarily reduce their size because they’re not seeing the benefits they used to get.”

“I read you on this,” Warren said. “I read your predictions on this in your earlier testimony, but so far it looks like they’re getting $83 billion for staying big.”

“Well, that’s one study,” Bernanke said. “You don’t know whether that’s an accurate number.”

The Dallas Federal Reserve reported last March that just five “too big to fail” banks control more than 50 percent of the banking industry’s assets. The top 10 institutions controlled over $7 trillion in 2010, or roughly half the U.S. gross domestic product that year.

Sen. Warren Slams Regulators for Failure to Prosecute Big Banks

Friday, February 15, 2013 by Common Dreams
Warren: 'I am really concerned that too-big-to-fail has become too-big-for-trial'
- Lauren McCauley, staff writer


At her debut on the Banking, Housing and Urban Affairs Committee on Thursday, freshman Sen. Elizabeth Warren (D-Mass.) grilled a panel of top financial regulators on their lack of prosecution of banks' criminal activities with repeated emphasis on one particular question: "When was the last time you took a Wall Street bank to trial?"

Educating the panel on the value of taking a bank to trial, Warren explains:

If [banks] can break the law and drag in billions in profits and then turn around and settle paying out of those profits, they don’t have that much incentive to follow the law. It's also the case that when we have a settlement, and not a trial, it means that we don't have those days and days and days of testimony of what those financial institutions have been up to.

The question I really want to ask is about how tough you are — about how much leverage you really have.

The regulators—representing the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Reserve, and the Treasury among others—responded with predictable platitudes: "We have not had to do it as a practical matter to achieve our supervisory goals," said one and, "When we look at these issues [...] we look at the distinction between what we could get if we go to trial and what we could get if we don't," answered another.

Ryan Grim, writing for the Huffington Post, points out that open-Internet pioneer Aaron Swartz was one of Warren's constituents who she reportedly both met and admired.

Swartz recently committed suicide after being hounded by federal prosecutors over a "harsh array of charges" because they wanted to "make an example" of his activism—a point that Warren may have referenced in her remarks.

"I want to note that there are district attorneys and US attorneys who are out there every day squeezing ordinary citizens on sometimes very thin grounds and taking them to trial to 'make an example,' as they put it," Warren told the group.

"I am really concerned that too-big-to-fail has become too-big-for-trial. That just seems wrong to me."