Friday, January 31, 2014
ELIZABETH WARREN: BANKS SHOULD BE PROSECUTED
By Elizabeth Warren, Reader Supported News
PMorgan Chase recently reached yet another settlement with the U.S. government -- a $13 billion deal with the Department of Justice for peddling deceptive mortgages.
The banking giant broke the law, recklessly gambled with our economy, and had to pay a record government settlement. Guess what happened next? You guessed right: JPMorgan's CEO Jamie Dimon just got a 74% raise yesterday.
The New York Times speculates that Dimon got the raise because of his "active role" in negotiating government settlements last year. And as Dimon put it himself, it could have been a lot worse if JPMorgan had been forced to go all the way to a trial instead of just settling.
So here's my question: If JPMorgan is so happy with their settlements that they are rewarding their CEO with a big raise, do you really think the federal bank regulators were tough enough?
There are a lot of steps we can take to push the regulators to do their jobs and hold financial institutions fully accountable when they break the law, and I think a good starting place would be by enacting the Truth in Settlements Act.
This is the bill I recently introduced with Senator Coburn that would require accessible, detailed disclosures about settlement agreements so the public can hold regulators accountable -- no more hiding out behind closed doors and keeping the details secret.
When I question federal regulators in Banking Committee hearings, they insist that they don't need to take big banks to trial when they break the law. They stand by their claim that settlement agreements are tough enough.
But if a settlement is so weak that Wall Street is celebrating with pay raises, it's not a good deal for the American people.
This week Jamie Dimon admitted that the big banks don't want to go to trial, so now there's no doubt: If the regulators were willing to go all the way to a trial, even once in a while, they would have a lot more leverage in the settlement negotiations. And maybe they could get better deals on behalf of consumers and taxpayers.
This is simple: Bankers on Wall Street need to be held accountable when they break the law, and regulators in Washington need to be held accountable when they enforce the law.