In her attempt to grandstand at a Senate Banking Committee hearing last Thursday, Liz Warren screwed up the chance to make a valid point. The freshman Senator and veteran ideologue tried to beat up the federal banking regulators who were arrayed before the committee over their supposed reluctance "to take Wall Street banks to trial." You can watch her performance in the linked video, starting at approximately the 1 hour, 34 minute mark.
Although her opening question as to how tough the regulators were was never actually answered, I'm surprised that not one of the regulators answered "Tough enough to take anything a punk like you can throw at me without blinking, Running Joke." Instead, when she followed up by asking when was the last time any of the regulatory agencies took a Wall Street bank to trial, the least likely of all contenders stepped into the ring and counterpunched with a deft lesson in basic administrative law that sailed over the head of She Will Sioux (and over the heads of those droolers who applauded her).
Curry's point was that the OCC doesn't need to sue because it twists arms effectively enough in almost all cases to achieve its supervisory goals through consent orders, without commencing litigation. Warren's follow up, to the effect that she knows that the OCC doesn't have to bring banks to trial but when was the last time it brought a bank to (an unnecessary?) trial, caused Curry to again state that it doesn't have to sue banks (actually, commence an administrative enforcement action) to achieve its supervisory goals. Liz moved on to her next victim, who needed to check her facts and get back to the Senator at a later date.
Liz then got to the impetus for her initial inquiry, and it turns out to be a valid point that was made, unfortunately, before the wrong audience. She claimed that US attorneys throughout the country were taking "ordinary citizens" to trial all the time and "squeezing them" (and not like your main squeeze squeezes you, either), but were not taking Wall Street banks to trial. There's a case to be made that she's right about that. If there had been an actual US Attorney on the panel before her, that point would have been telling. Instead, those testifying were FEDERAL BANKING REGULATORS. THEY CAN'T BRING CRIMINAL CHARGES AGAINST ANYONE, LIZZIE. ONLY A US ATTORNEY CAN DO THAT AT THE FEDERAL LEVEL!
Sorry to monetarily channel the spirit of the late Sam Kinison, but Liz was a celebrated (for her "diversity") member of the Harvard Law School faculty, who made her bones by taking shots at banks, and who also birthed the concept of the CFPB. God forbid she should actually understand that when you're chapped at federal officials for not bringing big banks and bankers to trial on criminal charges, the federal officials you want in the room are those who have the power to bring people to trial on criminal charges.
If Liz actually knew something about the subject matter at hand (which would have made her unique among her compatriots in the US Senate), she might have realized that Comptroller Curry's agency could be criticized for persecuting the little guys, while being strangely passive with respect to some Masters of the Universe. At least, you seldom, if ever, hear about the "hot pursuit" by the OCC of executives at Chase, Bank of America, or Wells Fargo.
Some of you may remember Patrick Adams, the former bank president who fought the OCC to clear his name and who was backed by a federal administrative law judge, who recommended that all charges against him be dismissed by the Comptroller of the Currency. Instead of dropping the case, rumor has it that the OCC has objected to the ALJ's decision and has urged the Comptroller not to follow the recommendation of the ALJ. Had she been aware of what is actually what, Ms. Warren might have asked the Comptroller why the OCC fights to the bitter end to pursue charges against folks like Mr. Adams, and whether it also aggressively pursues Wall Street bankers with the same zeal. She might have asked Curry to name the last time the OCC tried to overturn an ALJ's recommendation to drop charges against a Wall Street banker. Curry would have suffered instant aphasia, but it would have been a useful line of questioning to those of us who understand the difference between a criminal trial and a civil administrative enforcement proceeding.
But, no, Liz played to the cheap seats, including her acolytes in the trade press, and got her round of cheap applause from her targeted audience.
