Elizabeth Warren, the freshman Senator from Massachusetts, made “too big for trial” a virtual slogan for her crusade to get regulators to explain why no big bank has been prosecuted for wrongdoing in the run-up to the crippling financial crisis. She is at it again.

Sen. Warren Seeks More Answers on Lack of Big-Bank Crackdown

Sen. Warren Seeks More Answers on Lack of Big-Bank Crackdown

Sen. Warren Seeks More Answers on Lack of Big-Bank CrackdownElizabeth Warren, the freshman Senator from Massachusetts, made “too big for trial” a virtual slogan for her efforts to get regulators to explain why no big bank has been prosecuted for wrongdoing in the run-up to the financial crisis.

The Democrat is at it again,  following up her prosecutor-like questioning of regulators during a memorable Senate banking committee hearing in February.

Now she is turning to letters to get her answers for the record.

Warren, a member of the Senate Committee on Banking, Housing & Urban Affairs,  is asking Attorney General Eric Holder, current Securities and Exchange Commission Chairwoman Mary Jo White and Federal Reserve Chairman Ben Bernanke the following question:

“Have you conducted any internal research or analysis on trade-offs to the public between settling an enforcement action without admission of guilt and going forward with litigation as necessary to obtain such admission and, if so, can you provide that analysis to my office?” Warren said in the letter.

On Feb. 14, Warren came to her first banking committee hearing (see video of her questioning below) and asked federal regulators the question: When was the last time you took a Wall Street bank to trial?

“We do not have to bring people to trial,” responded Thomas Curry, the chief of the Office of the Comptroller of the Currency, the bank regulator within the Treasury Department, during the hearing.

Warren submitted the question to the OCC for the record. The OCC responded last week with a “no.”

“The OCC does not have any internal research or analysis on the trade-offs of settling without an admission of liability,” the OCC responded, as Warren mentioned in her newest letter to the three federal officials.

Now it’s time for Bernanke, Holder and White to answer Warren.

Their answers would still be quite relevant as foreclosure settlements unwind and eligible compensation recipients are getting payouts that, by most accounts, fall short of the financial harm inflicted by the largest lenders and mortgage-servicing affiliates during the height of the foreclosure crisis.

The two big agreements — the Independent Foreclosure Review and the National Mortgage Settlement — also require the big banks to stop deficient, misleading or wrongful practices when negotiating mortgage terms with homeowners facing foreclosure.

But housing counselors, consumers advocates, state attorneys general and lawmakers have heard litanies of complaints that servicers are still delaying documentation or failing to provide a timely and a central point of contact in their dealings with borrowers.

Here is Warren’s take on bank settlements, as she writes in her letter to Bernanke, Holder and White.

“There is no question that settlements, fines, consent orders, and cease-and-desist orders are important enforcement tools, and that trials are expensive, demand numerous resources, and are often less preferable than settlements. But I believe strongly that if a regulator reveals itself to be unwilling to take large financial institutions all the way to trial — either because it is too timid or because it lacks resources — the regulators has a lot less leverage in settlement negotiations and will be forced to settle on terms that are much more favorable to the wrongdoer.”

Read Warren’s letter here.

 

 

3 Comments
  1. Here’s the latest about HAMP Fraud. This should give us hope that our application for IFR was based on our collective experiences before were were ripped off by the criminal servicers. Everything we said was true. Just read this 56-page complaint or the highlighted parts, the check the new site for us at nakedcapitalism.com. We have to stick together and never, ever give up. We will fight those criminals. here’s the link:

    http://www.documentcloud.org/documents/324428-greg-mackler-complaint.html

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