Monday, March 11, 2013

Wow! A Senator for the United States!

In retrospect, about the most bone-headed thing the banks did was pull out all the stops to keep Elizabeth Warren from becoming head of the Consumer Financial Protection Bureau (CFPB). Since she couldn't get that, she decided to run for senator from Massachusetts – and won!

As head of the CFPB, she would have been subject to at least some political pressure from the President. As a Senator, she is the one applying the pressure. She made headlines a couple of months ago when she asked regulators when was the last time they took a fraud case to trial, instead of settling for a fine. [Nobody could remember such a case.]

Last Thursday, she was at it again, specifically targeting HSBC, which recently paid a $1.2 billion fine for laundering money for Mexican drug cartels and terrorists. Nobody went to jail. Nobody was even charged with a crime.

In her questioning of Treasury Department officials Thursday, she asked, "So, what would it take?"

At the conclusion, she summarizes:
If you’re caught with an ounce of cocaine, the chances are good you’re going to go to jail. If it happens repeatedly, you may go to jail for the rest of your life. But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night — every single individual associated with this. I just — I think that’s fundamentally wrong.
Obviously, this is a shot across the bow not only of the banks, but of the Justice Department. They should start getting their answer ready.

H/T to Talking Points Memo for pointing me to the video.


Virginia Ted said...

Please, Elizabeth Warren, don't give up on this.

Chip said...

I have watched this over and over. I am very disturbed by the answers to Elizabeth's questions. Something is indeed fundamentally wrong.

Bob Miller said...

As a former bureaucrat, I have some sympathy for these guys. Bureaucrats follow the laws Congress has written. The laws say they can't take action to close or remove the bank unless Justice brings a criminal action. So the ball is in Justice's court.

At about the same time Senator Warren was having this hearing, Attorney General Holder was saying, basically, that international political considerations made the decision not to go after HSBC in criminal courts the correct decision. It's even possible he's right, though I'm not convinced. We (the USA) need to start changing that equation, and increasing domestic political pressure is how it's done.