Warren: Big banks built on "tricking people"
Wanted to lead CFPB
Senator Elizabeth Warren, D-Mass., continued her fight for financial reform in the United States on Wednesday during an appearance on The Diane Rehm Show on NPR to promote her new book, "A Fighting Chance."
Warren’s discussion with Rehm was wide-ranging, touching on her life and the various reforms that have been enacted since the financial crisis of 2008. During the appearance, Warren said “we are at a crossroads in our country,” due to the still tenuous nature of the country’s financial system.
“This is our moment in history,” Warren said. “This country will either work great for people who have money and power and can hire all the lobbyists they want in Washington and not work so great for everyone else. Or this will be the country that we used to be with a strong middle class.”
Warren spoke on the financial bailout of 2008 and criticized Henry Paulsen and Timothy Geithner, saying the former Secretaries of the Treasury “focused much too much on protecting the tender fannies of the financial institutions,” instead of helping the American people who were affected by the financial crisis.
“Paulsen and Geithner see the world through the lens of big business,” Warren said. “The Treasury Department handed out money with no strings attached. What they should have done is wipe out the shareholders of the big banks. Nothing focuses the attention (of a financial executive) like saying something like, ‘not only will your company pay, but if you lead your company over a financial cliff, you’re going to pay too.’”
Warren said she expected there to be charges filed and arrests made because of the actions taken by the big banks. "I just kept expecting any day that there would be indictments, that people will go out in handcuffs, and it never happened,” she said. “This was always about saving the biggest financial institutions. They treated the crisis like a hurricane, not anything that anyone did wrong.”
Warren also said the big banks “built a financial model on tricking people.”
Warren unsurprisingly spoke highly of the Consumer Financial Protection Bureau during her appearance, saying that the agency has returned $3 billion to the American people that they were “cheated out of by credit card companies and mortgage companies.”
Warren was asked if she would have wanted to be the head of the CFPB. “Oh, sure,” she said, but that she had no chance to lead the agency because the Republicans in Congress “pre-rejected” her and spent more than $1 million a day to lobby against the agency’s formation. She also said she was “disappointed” when she wasn’t asked to stay on to lead the agency.
Warren said that despite the CFPB’s efforts, the government must do more to oversee banking in this country. “Big financial institutions should not be allowed to break the law and just walk away,” she said. “The key is for the regulators to do their jobs and call out these banks. The bank regulators need to remember they are not there to serve the banks, they’re there to serve the American people.”
Warren said that she is pushing for banks to separate their personal banking operations (personal checking and savings) from the banks’ risk-taking ventures. “We need to make banking boring once again,” she said. “We still have a problem on our hands. The ‘too big to fail’ banks are 38% bigger now than they were in 2008.”
Warren was also asked if she is planning on running for President in 2016. “I’m not running for President,” she said. “We need to focus on what these financial institutions are doing right now. There are issues that can’t wait.”