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Sen. Elizabeth Warren is not letting up in her efforts to find justice for American families who have been victimized by banks who have essentially stolen their homes through foreclosure fraud. Back in February, at her first Banking Committee hearing, Warren demanded of federal regulators: "What I'd like to know is, tell me a little bit about the last few times you've taken the biggest financial institutions on Wall Street all the way to a trial."
She didn't get a good answer then, and hasn't gotten an answer since. Instead, the government has continued to accept financial settlements from criminal bankers. So she's ratcheting up the pressure. In a letter sent to Chairman of the Federal Reserve Ben Bernanke, Attorney General Eric Holder, and Chairman of the Securities & Exchange Commission Mary Jo White, Warren is asking for any evidence they might have to explain why these settlements, a slap on the wrist to the huge financial institutions, is better policy than prosecuting them. From her letter [pdf]:
There is no question that settlements, fines, consent orders, and cease and desist orders are important enforcement tools, and that trials are expensive. [...] 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 regulator has a lot less leverage in settlement negotiations and will be forced to settle on terms that are much more favorable to the wrongdoer. [...] If large financial institutions can break the law and accumulate million in profits, and if they get caught, settle by paying out of those profits, they do not have much incentive to follow the law.
Those government agencies have now been put on notice: There's a real watchdog out there now, and one who can get a lot of attention. The big banks aren't changing their practices, and maybe it's about time the regulators start taking their jobs more seriously.
Originally posted to Joan McCarter on Fri May 17, 2013 at 11:49 AM PDT.