= Subscriber content; or subscribe now to access all American Banker content.

Elizabeth Warren's Warped Reality

To say any candidate, or either party, has a monopoly on distortions and hypocrisies in a campaign as fractious as this one would do a grave disservice to the spinmeisters on the other side of the aisle. But for bankers, the claims that Elizabeth Warren floated during her turn in the spotlight at the recent Democratic Convention deserve special scrutiny.

Warren, of course, is the Senate candidate from Massachusetts and self-described mother of the Consumer Financial Protection Bureau, who rarely passes up a chance to wag her finger at the financial industry. She certainly wasted no time on the convention podium lighting into bankers for all manner of alleged misdeeds.

Here are a few of the curious and/or spurious accusations Warren leveled during her warm-up act for the president that are particularly pertinent to bankers:

Warren: "The system is rigged. Look around. Oil companies guzzle down billions in subsidies. Billionaires pay lower tax rates than their secretaries. Wall Street CEOs—the same ones who wrecked our economy and destroyed millions of jobs—still strut around Congress, no shame, demanding favors, and acting like we should thank them."

Reality check: Demanding favors? Like the labor unions that helped push General Motors and Chrysler over the brink and then got the president to help cut in front of bondholders during a taxpayer-funded bailout? Or the class action lawyers who get rich suing job-creating corporations and then funnel some of the spoils to the Democratic Party?

Warren: "President Obama gets it because he's spent his life fighting for the middle class. And now he's fighting to level that playing field."

Reality check: Obama fighting to level the playing field? With a Fed chairman whose near-zero interest rate policy is hurting retirees and other savers while rewarding the profligate—most notably Uncle Sam? Even Neil Barofsky, the former Tarp Special Inspector General who is quite fond of Liz Warren, has blasted the Obama White House and Treasury Secretary for lying to the American people and disguising a giant-bank bailout as a homeowner rescue.

Warren: "Mitt Romney's the guy who said corporations are people."

Reality Check: This ploy must have come from a Political Dirty Tricks 101 class back at Harvard. As this video shows, Romney made the comment in a good-natured response to hecklers. Here's the full text of what he said: "Corporations are people, my friend. Of course they are. Everything they make ultimately goes to people. Where do you think it goes? Whose pockets? Whose pockets? People's pockets." 

FYI, Ms. Warren, a lot of the people Romney referred to are the teachers and firefighters whose taxpayer-insured pensions are invested in—horror of horrors—corporations.

Warren: "After the financial crisis, President Obama knew that we had to clean up Wall Street."

Reality Check: Obama's cleaned up Wall Street? Who's gone to jail, Ms. Warren? In the wake of the tech bust a decade ago, George W. Bush's Justice Department went after the deposed bosses at Enron, WorldCom and Tyco and put them in jail. President Obama's Justice Department has taken a pass on the likes of Jon Corzine of MF Global, Angelo Mozilo of Countrywide Financial and the boatload of cads who ran places like AIG, Bear Stearns and Lehman Brothers. Or, as Neil Barofsky said to me recently, given the "trillions and trillions of dollars of value that have been wiped out … it certainly seems like there should have been a rampant area for potential fraud cases."

Warren: "I had an idea for a consumer financial protection agency to stop the rip-offs. The big banks sure didn't like it, and they marshaled one of the biggest lobbying forces on earth to destroy the agency before it ever saw the light of day. American families didn't have an army of lobbyists on our side, but what we had was a president—President Obama leading the way. And when the lobbyists were closing in for the kill, Barack Obama squared his shoulders, planted his feet, and stood firm. And that's how we won."

Reality Check: Sure, the big banks didn't like it, and you're right that plenty of sleazy practices flourished. But there are more than 7,000 banks in the U.S. And the Dodd-Frank Act that your bureaucracy is a part of has done tremendous collateral damage to thousands of banks that were innocent. Whether you realize it or not, that means it's also hurting millions of the small businesses and people you claim to represent.

Neil Weinberg is the editor in chief of American Banker. The views expressed are his own.


(21) Comments



Comments (21)
Agree or disagree, but why all the racist commentary? I expect that from some other post, but the American Banker? If your unable to form a rational argument other than Native American stereotypes, please don't waste our time.
Posted by stays72 | Wednesday, September 26 2012 at 9:12PM ET
Talk about "warped reality"--- bankers who view themselves as victims of an unfair system (perpetrated by "the Obama regime", no less) have become completely detached from the real world. If the editor of this publication had taken his role as a journalist seriously, perhaps a useful conversation on an important topic would have resulted. The childishness of the two previous posts reflects the boorish nature of the original commentary.
Posted by TJR Easton | Wednesday, September 19 2012 at 7:46AM ET
Elizabeth Warren, she is such an outstanding, honest person, why in the world she wants to get mixed up with all those highly dishonest politicians is beyond me for she is far too good for them. I personally am very grateful to Ms. Warren for helping make the CFPB come to life, it is the ONLY agency that might possibly protect consumers from the suck the life and every last dime they can possibly suck, legal or illegally, bankers. Bankers are scum bags, just worthless, disgusting, pieces of crap.
Posted by Bankerssuck | Tuesday, September 18 2012 at 6:23PM ET
Faux-cahontas is a liar and a fraud perpetrated by the Obama regime. Our industry should have fought a lot harder against CFPB and particularly its animus toward capitalism, as symbolized by Elizabeth Warren. If you want to get back at her, contribute to Scott Brown's campaign. I do, and I don't live anywhere near Massachusetts.
Posted by formrbanker | Saturday, September 15 2012 at 4:27AM ET
Wow! Does this article belong in AB? Use to consider this publication a reputable industry publication, no more.
Posted by EFB | Friday, September 14 2012 at 5:29PM ET
Since when does a newspaper editor publish views (in his newspaper)that "are his own" . Why not be honest and do what every other newspaper does? Just post the article as an editorial. Or does the American Banker want it both ways; the ability to bash the President, while claiming it wasn't the newspaper that did so? How sneaky!
Posted by andkel | Friday, September 14 2012 at 10:57AM ET
Lizzie Warren took an axe
and gave the Mega-Banks forty whacks.
When she saw what she had done,
she gave the community banks forty-one.
Posted by observare et analysim | Thursday, September 13 2012 at 6:29PM ET
The article is accurate. Ms. Warren is a terrible spokesperson. At the same time, the CFPB was needed because the industry lacks leadership to stop predatory practices of the bad apples. Can anyone explain why 4 major banks are charging 90-365% interest on their payday loans to their customers? The ROE can be over 1000%!!!
Posted by FrankRauscher | Thursday, September 13 2012 at 10:21AM ET
I concur with TJR Easton. I do not read AB for political opinion and certainly not for a one-sided bashing of views held by many. Don't forget that a poll taken in July of likely voters - both Democrat and Republican - showed over 90% support for the CFPB's mission. Bashing Elizabeth Warren may feel good to AB's editors, but it does nothing to change voters' impression of bankers. The CFPB was not created on a whim, and bankers need to reflect upon that.
Posted by Mr. Sandypoint | Thursday, September 13 2012 at 9:51AM ET
Elizabeth Warren told the truth and I'm sorry it offends you million-dollar-bonus bankers. The CFPB is necessary because of the unregulated recklessness of the past decade and the collapse of the economy it nearly caused. No safety and soundness in making no-income-check, negative amortizing loans or betting the ranch on CDSs while deceiving consumers with excessive fees, dubious practices (dual-cycle card billing reminiscent of the old Rule of 78s), and the credit card add-on products that the CFPB effectively shut down with the Capital One consent decree. The middle class finally has someone in Washington to compete with your high-priced lobbyists. When I entered banking 20 years ago, I felt it was an honorable profession. Now I understand it's all about short-term cash for the rich at the expense of the underbanked and unbanked who can't afford all the gimmicks and tricks. Welcome the CFPB and let's bring some more enforcement actions as there are no shortage of players to go around. Interesting that banks don't lend during the Obama Administration despite the bailout money and other incentives. I wonder why.
Posted by randyh44 | Wednesday, September 12 2012 at 6:02PM ET
Elizabeth Warren was sighting the realm of her experience - which is monitoring the banks - she was not Department of Commerce Secretary. Yes, the banks who pay Bank CEO's a million times more than a basic teller earns get to write off that expense - is it fair? NO! Anything over a million dollars should be taxed.

TARP money, most of which has been repaid, was supposed to be lent to small businesses, instead banks used it as a charge card to go buy more banks. So yes, they need regulation.

Banks are a necessary component of the economic recovery of our country, and yes, they should be making more small business loans.
Posted by camador | Wednesday, September 12 2012 at 5:30PM ET
Get real you whiners. First, thank you dpaul and j.doe and easton for speaking truth. Warren is a hero for real people and is guilty of nothing more than pulling back the curtain on unfair behavior and telling it like it is and trying to help people that are at a disadvantage. Seems like the higher road to me. Seems all the opposition is mostly getting upset because they are greedy, self-centered, and can't stand the thought of not being able to cheat other people for an extra dollar in their pocket. They are the ones that deserve ridicule and regulation.
Posted by getreal | Wednesday, September 12 2012 at 4:06PM ET
AB should not assume that all readers are reactionary Republican partisans who will applaud this sort of hack job. Unless, that is, you want your publication to be seen as being as "fair and balanced" as Fox News. Leave the blatantly political smear and personal attacks to the professional political class. Even in an opinion piece, there should be some larger purpose served than shouting in anger about someone who made a speech. Get a grip.
Posted by TJR Easton | Wednesday, September 12 2012 at 2:48PM ET
If you like the past 4 years of regulation, YOU WILL LOVE THE NEXT FOUR YEARS OF ADDITIONAL REGULATIONS. There are no community banks on Wall Street!
Posted by trackie56 | Wednesday, September 12 2012 at 2:18PM ET
Glad to see AB post an article like this one. Well done.
Posted by Johnny Tremaine | Wednesday, September 12 2012 at 12:52PM ET
Reality Check summary: Many big banks caused the crisis but they made out better than most small banks did, thanks to lobbying, the TARP bailout, no jail sentences, and Dodd-Frank overhead. But I think "Lizzy" Warren would agree with you about that unfairness, so I don't get why she's the focus of your editorial.

P.S. Yes, "Corporations are people" and "You didn't build that" both seem less bad in context.
Posted by bobschwartz | Wednesday, September 12 2012 at 12:38PM ET
Haha, Lizzie hit a nerve did she? Fact is, there would be no CFPB if it wasn't for the shameful behavior of banks and the rest of the financial sector over the last 30 plus years. From predadory loans to deceptive credit card terms to check clearance practices designed to maximize bounced check service charge revenue to betting against the very securities you peddle to your customers as safe... the list of sins goes on and on. The bad apples have brought shame on the financial industry. Hey, here's an idea: If you don't want Dodd-Frank and CFPB, conduct business in a way that doesn't make them absolutely necessary.
Posted by j.doe | Wednesday, September 12 2012 at 12:25PM ET
There's finally someone standing up to the lies of this President and his party.
Posted by Finally | Wednesday, September 12 2012 at 12:22PM ET
I am not sure what the point is here. Should bankers have gone to jail? Who and for what? Why are the large banks that were bailed out--the ones that needed money, not the ones that Hank Paulson forced to the table--are the leading political contributors, first to Obama and now to Romney. Are you suggesting that they are not demanding favors. Are you suggesting that those largest banks who hold 95% of the CDS do not constitute systemic risk? The banking industry problem is indeed that the thousands of banks that were not the problem have failed to advocate a solution that says that banks should not be too big to fail, that regulation cannot substitute for a vibrant marketplace. If Glass-Steagall is not to be the solution, then perhaps capping bank size should be. The alternative is regulation that buries us all. The problem is not Warren, but an industry that has sat by and let the industry become defined by the needs and implications of mega-banks that serve no societal purpose to justify the risk they create.
Posted by dpaul | Wednesday, September 12 2012 at 12:20PM ET
Cherokee Liz is a real piece of work. Too bad that the government doesn't create any wealth. Great place for arrogant, aggressive, space occupiers though.

Posted by cnoblejr | Wednesday, September 12 2012 at 12:18PM ET
Rep.Mel Watt from NC did the very same thing standing on his political grandstanding box. He blamed Brokers for everything without any reaseach whatsoever.Walt
Posted by sparky100883 | Wednesday, September 12 2012 at 12:10PM ET
Add Your Comments:
Not Registered?
You must be registered to post a comment. Click here to register.
Already registered? Log in here
Please note you must now log in with your email address and password.