July 11, 2013

Sen. Warren Urges Reforms to Limit High-Risk Wall Street Practices

At Banking Hearing, Sen. Warren Announces 21st-Century Glass Steagall Act, Pushes Regulators to Adopt Stronger Settlement Policies, and Asks for Transparency in Independent Foreclosure Review Settlement Process

WASHINGTON, DC -  During a Senate Banking Committee Hearing today, U.S. Senator Elizabeth Warren (D-MA) urged financial regulators to adopt and implement reforms to limit risky activities of big banks on Wall Street that continue to threaten our economy.

Senator Warren spoke about the 21st Century Glass-Steagall Act she introduced today with Senators John McCain (R-AZ), Maria Cantwell (D-WA), and Angus King (I-ME). The measure is a modern version of the Banking Act of 1933 (Glass-Steagall) that reduces risk for the American taxpayer in the financial system and decreases the likelihood of future financial crises. Additional information about the bill is available here.

Senator Warren then pressed regulators on whether they plan to adopt stronger policies requiring an admission of guilt as a part of enforcement actions. After Senator Warren sent a letter to the Federal Reserve, Department of Justice, and Securities and Exchange Commission in May inquiring about the regulators’ settlement processes, SEC Chairwoman Mary Jo White announced the agency would begin to require admissions of guilt in a wider variety of cases. Today, Senator Warren asked Daniel Tarullo of the Board of Governors of the Federal Reserve System about whether the Fed plans to make any changes to its policy.

At the hearing, Senator Warren also discussed the issue of transparency related to the settlement process. In January, Senator Warren and Congressman Elijah Cummings (D-MD) launched an investigation into the settlement ending the Independent Foreclosure Review process, seeking information related to what the banks did wrong and how compensation was determined. Regulators have not yet produced the requested information.

Video of Senator Warren’s remarks at today’s hearing is available here.