Watch as the perfectly reasonable Sen. Elizabeth Warren backs these government hacks into a corner over protecting crooked banks from consequences of their illegal actions. How naive -- she actually believes regulators are supposed to work for the people!
Sen. Elizabeth Warren (D-MA) embarrassed government regulators during a Senate Banking Committee hearing on Thursday morning as she demanded to know why they won’t reveal how frequently big banks illegally foreclosed on homeowners. In January, regulators abandoned a case-by-case review of foreclosure fraud conducted by some of the nation’s largest banks in favor of a $9.3 billion settlement. Under the deal, most of the 4.4 million homeowners who were foreclosed on in 2009 or 2010 received less than $1,000 each.
Fair housing advocates and Democratic lawmakers panned the agreement, claiming that it short-circuited a more detailed review process (known as Independent Foreclosure Review) and let banks off the hook for illegally foreclosing on millions of homeowners. Regulators had initially claimed banks broke the law or made errors in 6.5 percent of all the loans reviewed, though the number has since been revised upward.
During the hearing, Warren pressed officials from the Office of the Comptroller of the Currency and the Federal Reserve for answers about how frequently banks broke the law, only to discover that regulators didn’t know the exact number before reaching their settlement and were now unwilling to publicize the error rate.
“You’re saying that the [you] did not have an estimate in mind of how many banks had broken the law and how many home owners were the victims of illegal activities?” Warren asked in disbelief. She pressed for public disclosure, but was told that the information about banks’ illegal activities is proprietary and may not ever be released:
WARREN: So you have made a decision to protect the banks but not a decision tell the families who have been illegally foreclosed against?
RICHARD ASHTON (FEDERAL RESERVE): We haven’t made a decision about what information we would provide to individuals. [...]
WARREN: So I just want to make sure I get this straight. Families get pennies on the dollar in the settlement for having been the victims of illegal activities or mistakes in the banks’ activities. You now know individual cases where the banks violated the law and you’re not going to tell the homeowners or at least it’s not clear if you’re going to do that?
Gee, it all sounds so sleazy when she says it like that! Huffington Post reports that Sen. Sherrod Brown also kicked some ass in these hearings, so let's give him props, too.