Elizabeth Warren terrifies Wall Street at hearing

Financial regulators had no straight answers about taking banks to trial, but the Democratic Senator's banking committee debut was more about setting examples than starting reform.

By Jason Notte Feb 15, 2013 3:46PM
Credit: Adam Hunger/Reuters
Caption: Elizabeth WarrenWhy have Elizabeth Warren just give testimony as the leader of the Consumer Financial Protection Bureau when she can pants the bureau and just about every other financial regulator as a member of the Senate's banking committee?

If this was the plan of Congressional Republicans, Wall Street lobbyists and outgoing Treasury Secretary Tim Geithner when they opposed her taking the director's seat at the consumer bureau back in 2011, then well played.

Now a freshman Democratic Senator from Massachusetts, Warren's first hearing boiled down to one question that Americans have been positing since the financial crisis began roughly five years ago: When was the last time anybody took a Wall Street bank to trial instead of reaching a settlement?

The result played out like the least funny version of Abbott and Costello's “Who's On First” routine ever performed:

Warren: The question I really want to ask is about how tough you are, about how much leverage you really have in these settlements. 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. Anybody?

Thomas Curry, head of the Office of the Comptroller of the Currency: The institutions I've supervise, national banks and federal thrifts, we've actually had a fair number of consent orders [settlements]. We do not have to bring people to trial to...

Warren: I appreciate that you say you don't have to bring them to trial. My question is, when did you bring them to trial?

Curry: We have not had to do it as a practical matter to achieve our supervisory goals.

“We have not had to do it” is apparently pinch-running for “I don't know” on third base. Warren later attempted the same routine with Elise Walter, head of the Securities and Exchange Commission:

Walter: Among our remedies are penalties, but the penalties we can get are limited. We've asked for additional authority -- my predecessor did -- to raise penalties. When we look at these issues, and we truly believe that we have a very vigorous enforcement program, we look at the distinction between what we can get if we go to trial and could get if we don't.

Warren: I appreciate that. That's what everybody does. The question I'm really asking is can you identify the last time when you took the Wall Street banks to trial?

Walter: I will have to get back to you with the specific information, but we do litigate and we do have settlements that are either rejected by the commission or not put forward for review.

Nobody else offered an answer, which prompted Warren to note that average citizens are targeted by district attorneys and U.S. attorneys for far less just to make examples of them. Though she never said as much, Warren's implication was that financial regulators should perhaps consider doing the same to the institutions they oversee.

“I'm really concerned that 'too big to fail' has become 'too big for trial,'" Warren said.

The reaction to the financial crisis hasn't been short on bluster, as Goldman Sachs (GS) CEO Lloyd Blankfein can attest. It's Warren's ability to put some regulatory weight behind that bluster that should make a banking industry already shaken by scandal and regulatory scrutiny even more nervous.

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Feb 15, 2013 4:04PM
Bout damn time somebody gets in their faces!
Feb 15, 2013 4:15PM
We need a lot more people like her in the Congress.
Feb 15, 2013 4:11PM

I like Warren. Maybe she will put some Bankers in Jail.


 Start at Citimortage.

Feb 15, 2013 5:08PM
Great point about trials.  Martha Stewart got nine months of house arrest for a $48,000 insider trade.  But for bilking customers out of millions, Merrill Lynch paid a $185,000,000 fine and NO one got jail time.  Before Warren, EVERY member of the Senate Banking Committee received hundreds to millions of dollars in campaign contributions from the banking interests and one even has a wife on a big bank's board.  HOW is that not a conflight of interest?  SHEER corruption!
Feb 15, 2013 4:35PM

 Folk singer,Woody Guthrie said it best: "Some rob you with a six gun, some with a fountain pen"! Banksters are the latter! Banks might be too big to fail, but none is too big to indict!


Feb 15, 2013 4:55PM
Elizabeth Warren is unequivocally the best friend and advocate that the American consumer has ever had in the entire history of consumer financial affairs.
Feb 15, 2013 4:36PM

Scare 'em. Let's get a hatchet into the hands of this 'Lizzy' to fix the problem. Give 'em hell 'Lizbeth!

Feb 15, 2013 5:00PM
Thank God.... Ms. Warren, we have your back... go get 'em, PLEASE!
Feb 15, 2013 4:46PM
Wall Street and the Big Banks- How many millions $ did these crooks earn in commissions and bonuses and then tanked our economy?  Anyone gonna give those $ back??
Feb 15, 2013 4:55PM

hmmm.......& the plot thickens.......how about putting some politicians in jail.......eg: the ones

that required the banking/morgage industry to loan money to home buyers that couldn't

afford down payments or mortgages ? And then there's the story of the Clinton administration

repealing the Glass/Steagal Act.......written post WW2 to regulate the banking/mortgage

industry........does the bill Dodd/Frank...come to mind.........there's enough crooks to go

around..........but don't let your heart be troubled.........cause when one retires or goes to jail

.......another will promptly fill the absent predecessor's spot..............politics,nepotism, &

corruption make the world go round..............

Feb 15, 2013 4:37PM
Go baby go. let them rot in a cell broke. dont stop now just keep putting pressure on these magotts. just watch out for those republicans you are going after the hand that feeds them under the table. thank you let em have it. coravette.
Feb 15, 2013 4:35PM
Let us get real here.  The fact of the matter is that people who have enough  money and pay the right people will never be prosecuted by those same people.  There is a reason for the phrase "he is paid up with the right people".
Feb 15, 2013 5:35PM
They have had this coming for such a long time.   Give 'em hell Senator Warren.
Feb 15, 2013 4:59PM
It would be fun to audit Curry's and Walter's bank accounts.  Warren for Prez.
Feb 15, 2013 5:30PM
You have to remember, she didn't her other job because the Rep. on the banking industry committee thought she would be hard on the Wall Street bankers who gave a lot o $$$ to congress people. Maybe now she will ring their necks. 
Feb 15, 2013 5:23PM
Feb 15, 2013 4:41PM
I'm anxiously awaiting the day when there's a news flash: "Epidemic outbreak of colitis in Wall Street corner offices and boardrooms!" followed by, "Blankfein jumps from 84th floor!"
Feb 15, 2013 4:56PM
Better to put some bankers in jail than Bernie. All Hail Senator Warren.
Feb 15, 2013 4:43PM
Notajew should ask Paulson from Goldman Sucks fame, it was he and Bushy Boy who handed out the money to save thier friends on wallstreet. The Treasury Dept. is responsible for the fund and 75% has been repaid.
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