At a Senate Banking Committee hearing on the implementation of Dodd-Frank, Sen. Elizabeth Warren demanded to know why regulators are not pursuing banks in court.
The hearing held on Thursday allowed for several members to question seven top regulators on a range of financial issues. These issues included, the Volcker Rule, qualified residential mortgages, and Basel III.
"Warren's exchange with agency officials was one of the tensest, with the freshman senator raising the prospect that many banks can settle charges of wrongdoing but pay a fine that is well below the profits they reaped from their improper actions," writes American Banker's Victoria Finkle.
Warren accused regulators of being afraid to pursue prosecution of banks, giving them leverage in settlement negotiations.
"I know there have been some landmark settlements, but we face some very special issues with big financial institutions," Warren said. "If they can break the law and drag in billions in profits, and then turn around and settle, paying out of those profits, they don't have much incentive to follow the law."
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