Wednesday, May 15, 2013

Maybe she is serious

Elizabeth Warren seems to be living up to her reputation.  Her latest salvo is a letter she wrote to the Fed, SEC and Justice Department asking them for evidence on how a settlement that doesn't require a bank to admit guilt would be better policy than taking the bank to trial.  She comments, "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.  
 
The consequence can be insufficient compensation to those who are harmed by illegal activity and inadequate deterrence of future violations.  If large financial institutions can break the law and accumulate millions in profits and, if they get caught, settle by paying out of those profits, they do not have much incentive to follow the law."

She sent the same basic letter to OCC without getting much satisfaction.  Will she get a decent response from the three agencies listed?

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