Elizabeth Warren isn’t handing out any “get out of jail free” cards to big banks that violate anti-money laundering laws.
During a Senate Banking Committee hearing, the new Democrat on the block from Massachusetts questioned why banking institutions, such as HSBC, have been allowed to get off so easy with the Justice Department.
In December, the U.S. government reached a deal with the British bank, which agreed to pay more than $1.9 billion in fines to settle charges of money laundering for Mexican drug cartels and completing transactions for countries under U.S. sanctions. Yet, no criminal charges were filed against individuals within the company.
Noting the discrepancy, Warren suggested banks get treated differently than the average citizen. ”If you’re caught with an ounce of cocaine, the chances are good you go to jail. If you’re caught repeatedly, you can go to jail for life,” said Warren. “Incidentally, if you launder nearly a billion dollars in drug money, your company pays a fine and you go home and sleep in your own bed at night.”
At the meeting, top officials at the Office of the Comptroller of Currency and the Treasury Department told senators they are exploring rules, both new and old, that would more aggressively punish bank employees and executives in these situations.
Appearing before the Senate Judiciary Committee, however, U.S. Attorney General Eric Holder admitted it’s hard to prosecute these megabanks who are in the wrong and argued it could do more harm than good.
“I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute — if we do bring a criminal charge — it will have a negative impact on the national economy, perhaps even the world economy,” Holder said on Wednesday. “I think that is a function of the fact that some of these institutions have become too large.” Translation: He literally confirmed that “too big to fail” translates to “too big for trial.”
On Wednesday, Warren fired back a feisty statement in response. “It has been almost five years since the financial crisis, but the big banks are still too big to fail,” Warren said in a statement. “That means they are subsidized by about $83 billion a year by American taxpayers and are still not being held fully accountable for breaking the law. Attorney General Holder’s testimony that the biggest banks are too-big-to-jail shows once again that it is past time to end too-big-to-fail.”