You are hereBuzzflash: Elizabeth Warren Reads Riot Act to Holder for Not Prosecuting Big Bank Mortgage Fraud
Buzzflash: Elizabeth Warren Reads Riot Act to Holder for Not Prosecuting Big Bank Mortgage Fraud
-By Mark karlin
August 22, 2013- Okay, so Senator Warren actually wrote a polite, detailed letter to Attorney General Holder. There was no shouting or acrimony.
However, in Washington, for a freshman senator to imply in official correspondence made public that the Department of Justice is not doing its job in investigating, prosecuting and even fining banks and secondary lenders in regards to multiple counts of mortgage lending violations is akin to a freshman at high school accusing the principal of letting teachers steal milk money from the desks of students.
It may be professional in tone, but Warren's letter is a direct challenge to the criminal impunity provided to and limited fines assessed by the DOJ on Wall Street for their multiple schemes to defraud both mortgage borrowers and investors.
I am concerned that this might be yet another example of the federal government's timid enforcement strategy against the nation's largest financial institutions. I believe that if DOJ and our banking regulatory agencies prove unwilling over time to take the big banks to trial or even require admission of guilt when they cheat consumers and break the law -- either out of timidity or because of a lack of resources -- then the agencies lose enormous leverage in settlement negotiations.
There are a number of federal agencies involved in the lax regulation and minimal punishment (no jail time) of the financial industry for its role, particularly in the creation of a toxic subprime mortgage scam, in the economic collapse that burst open in the autumn of 2007.