Elizabeth Warren’s fierce consumer advocacy and expertise in the field of Wall Street chicanery were the foundation of her successful campaign for U.S. Senate in Massachusetts last fall, and that intensity and acumen were on display Thursday during the course of a hearing of the Senate Banking Committee. With Republicans largely sitting in silence, the Democrat went after seven federal regulators, a collection of George W. Bush and Barack Obama appointees, in an old-fashioned, non-partisan, inquisition that put regulators and those regulated on notice that there is a new senator in town.
Senator Warren wanted the regulators to discuss "the last few times you’ve taken the biggest financial institutions on Wall Street all the way to trial." Ms. Warren undoubtedly knew that the regulators would have difficulty offering any examples of their taking these institutions to trial but her goal was to emphasize that the firms responsible for the Wall Street generated economic collapse of nearly five years ago escaped punishment for a disaster born of greed and arrogance.
The regulators largely avoided direct answers to her questions, but in referring to settlements and consent orders they answered just the same. This gave the senator an opportunity to observe that the threat of trial is an important tool in assuring that the big investment banks follow the rules. If Wall Street gamblers only have to worry about fines and lectures,
Republicans had been expected to attack the Consumer Financial Protection Bureau that Ms. Warren was instrumental in creating at the hearing but did not do so, perhaps content to let the hapless regulators squirm under the Democrat’s questioning. Ms. Warren was to be appointed the first director of the bureau, but when Senate Minority Leader Mitch McConnell threatened to filibuster her nomination, she withdrew and ran for Senate instead, defeating Republican incumbent Scott Brown, the favorite of Wall Street donors. Be careful of what you wish for Mr. McConnell, and be prepared Wall Street and Wall Street regulators.