It’s probably safe to say that of all the elected officials that walk the halls on Capitol Hill, Sen. Elizabeth Warren, D-Mass., isn’t Wall Street’s favorite, but a newly released excerpt from Warren’s book “A Fighting Chance,” shows just how tense her interactions with Wall Street’s bigwigs can be.
Warren first irked Wall Street when she helped to establish the Consumer Financial Protection Bureau, and since being elected to the Senate, Warren has continued in her push for increased regulation of Wall Street.
“Big financial institutions should not be allowed to break the law and just walk away,” Warren said in May. “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.”
According to a newly published excerpt from Warren’s book, Warren came face-to-face with the leader of one of those big banks in 2013 and the results were electric.
In the excerpt, taken from the new afterword for the paperback release of “A Fighting Chance” and published by the Huffington Post, Warren tells the story of being visited in her Capitol Hill office by Jamie Dimon, the CEO of JPMorgan Chase (JPM) and a conversation about financial regulations.
Warren writes that Dimon complained about the “burdensome” rules the bank was required to follow, and that she countered by saying that she didn’t think banks were overregulated.
From there, the exchange became increasingly passionate and ended with what could be described as a smug haymaker from Dimon.
From the Huffington Post-published excerpt:
I said I thought the banks were still taking on too much risk and that they seemed to believe the taxpayers would bail them out — again — if something went wrong.
Our exchange heated up quickly. By the time we got to the Consumer Financial Protection Bureau, we weren’t quite shouting, but we were definitely raising our voices. At this point — early in 2013 -— Rich Cordray was still serving as director of the consumer agency under a recess appointment; he hadn’t yet been confirmed by the Senate, which meant that the agency was vulnerable to legal challenges over its work. Dimon told me what he thought it would take to get Congress to confirm a director, terms that included gutting the agency’s power to regulate banks like his. By this point I was furious. Dodd-Frank had created default provisions that would automatically go into effect if there was no confirmed director, and his bank was almost certainly not in compliance with the those rules. I told him that if that happened, “I think you guys are breaking the law.”
Suddenly Dimon got quiet. He leaned back and slowly smiled. “So hit me with a fine. We can afford it.”
Let that sink in for a moment.
"So hit me with a fine. We can afford it."
Eventually, Dimon was indeed hit with a fine, as JPMorgan Chase had to pay $13 billion, which resolved federal and civil claims related to the bank’s packaging, marketing, sale and issuance of mortgage-backed securities prior to the housing crisis.
As for Warren, it's clear that her fight against Wall Street isn’t over yet, but this little excerpt pulls back the curtain on just how bloody those battles can really be.