WASHINGTON — Regulators are writing soft rules because they are worn out by industry interest groups and a system that favors large corporations, Sen. Elizabeth Warren, D-Mass., said Thursday.
"When it comes to undue industry influence, our rulemaking process is broken from start to finish," Warren said at a workshop on regulatory capture at the Administrative Conference of the United States.
Warren has long been an outspoken critic of big corporations with deep pockets influencing Washington and law enforcement. In a January report, the Massachusetts Democrat outlined a number of examples in 2015 where corporations were breaking the law, but civil cases were not pursued and the companies ended up with a "slap on the wrist."
-
A significant gap remains between the credit scores of women-owned companies and those owned by men, according to a Biz2Credit.com survey.
March 3 -
The Federal Reserve Board finalized a regulation that further narrows its ability to provide emergency funds to companies in a crisis.
November 30 -
The Senate is the next battleground for legislation requiring the Consumer Financial Protection Bureau to rescind 2013 guidance on indirect auto lending, but the bill may do nothing to slow enforcement efforts.
November 25 -
The former Harvard law professor is a long-shot choice for the high court and would face fierce Republican opposition, but she could help rally the Democrats ahead of the presidential election.
February 17 -
In what could be seen as a Nixon-to-China moment, Minneapolis Fed President Neel Kashkari, a former Goldman Sachs executive and one of the architects of Treasury's bailout of the largest banks, said that breaking up the big banks and turning them into public utilities may be the only way to solve "too big to fail."
February 16
"We have a two-tiered legal system now, one for giant corporations, one for everyone else," Warren said Thursday. "It is really, really hard to pass a law through Congress that helps working families."
During her speech, she outlined some steps that could be taken to loosen the corporate grip on regulators, including requiring them to disclose when they meet with stakeholders during the rule-writing process. She also suggested having industry experts who are often paid to write comment letters disclose the financial backing or have data that is collected for policy studies be made available to the public so others can "test drive it."
Additionally, she said rules should be simpler because complex ones leave more room for industry carve-outs and the regulators themselves end up relying on the industry to understand them.
"The existing process is loaded with opportunities for powerful industry groups to tilt the scales in their favor," Warren said.
She said the legal system makes it easier for business groups to challenge laws for being too restrictive than it is for public interest groups to challenge them for being too soft.
"It is a lot easier to just give in and write a soft rule or no rule at all," Warren said. "I talk to agency heads who are like beaten dogs who just want to keep their heads down" rather than fight with industry lawyers.
She cautioned that Dodd-Frank Act rules are being watered down because each rule presents a "golden opportunity to undermine, pervert or simply undo the work of Congress."
