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Tuesday, October 25, 2016

Sometimes it seems as if Congress has completely forgotten that there was a financial crisis just a few years ago that cost Americans trillions in wealth and eight million jobs.

Though financial reform became law in 2010, the implementation of Dodd-Frank’s new guidelines and enforcement mechanisms have been slowed and weakened by the overwhelming influence of banking lobbyists.

What’s even more concerning is that existing regulations cannot be properly enforced without sufficient funding from Congress.

At a hearing called “Mitigating Systemic Risk in Financial Markets Through Wall Street Reforms,” Securities and Exchange Commission (SEC) chair Mary Jo White and Commodity Futures Trading Commission (CFTC) chair Gary Gensler both told Senator Elizabeth Warren (D-MA) that they’re lacking in resources to do the job of policing the world’s largest financial corporations.

“There’s no question that additional resources are essential to our successful enforcement strategy,” White said, noting that they need funding for additional trial attorneys so they can go to court against violators.

“We need resources across the board for many other things as well,” she said. White noted that the SEC is budget-neutral and deficit-neutral, meaning that enforcements end up paying for themselves due to fines collected.

“I would say our enforcement resources are tiny compared to the size of the markets,” the CFTC’s Gensler added. “You know the American public put $180 billion into AIG [the insurance company taxpayers bailed out], that’s 600 times what the president asked for [to fund] our agency. Our enforcement folks are only about 150 of our people. And unfortunately we’re trying to make the best decisions but often we have to delay justice because we don’t have the right resources.”

“You know, it seems clear that if Congress wants to have a tough watchdog,” Senator Warren said, “it has to make sure the dog hasn’t been starved.”

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  • rustacus21

    … & this has been the case since the nation has been ‘intentionally’ saddled w/the debt incurred by: $10-plus trillion in wealthy/corp-only tax cuts; 2 wars, at now $8-$10 trillion, as of 2000 to current, a net job loss to the economy of (roughly) 10 million jobs (w/a gain of 4.5-5 million since the Obama terms) & banking/investment/Wall St corruption, at (about) $9-$12 trillion, w/no one yet in jail or any (significant) economic/oversite corrections, the regulators will end up spinning their wheels, getting nothing accomplished & as a result, will be facing another wave of corruption that will catch them once again, behind the 8-ball once they try investigating THAT fiasco. These are the consequences of the People failing to place greater importance on the Mid Term elections, giving the President & the Senate Majority a Congress that knows the value of a sessions worth of work! This current Congress is giving us what we deserve – wasted time & wasted money – politicians being paid to do nothing, in other words… that’s what 60% of eligible ‘non-voters’ voted for in 2010, was it not?

  • charleo1

    Seems the T-Party has been quite happy about the rampant thieving, scamming, and wholesale conning by the financial sector. First of all, they are corrupt as all
    get out themselves. Who really knows who’s funding this outfit? And, it gives them the perfect opportunity to bash the Federal Government as this big bloated monstrosity, killing both, jobs, and liberty, with it’s taxes, and regulation. Blah Blah Blah. So as it turns out, the stop the spending nonsense, is a great way, if your a crook, or paid by one, to eliminate the, “police department,” in question, altogether. By simply choking, and starving it, if not to death, to dysfunction. Then blame whatever cataclysm occurs on government. But to be accurate, this crapola didn’t begin with the T-Party. They just shoved the lever over to the extreme, like everything else. If I recall, when the Horizon oil well exploded in the Gulf, there were about 3 inspectors. And, they let the crew fill out the log, while they had coffee or something, then signed at the bottom. That, in my opinion was the only thing about
    what happened out there, that wasn’t an accident The inspector’s regimen. This was per orders from agency heads, who’s bosses are the politicians, kowtowing to corporate interests. And, one more thing. Even if the T-Party eventually loses, and
    Government is allowed to continue in it’s regulatory role. This is always going to be the case, to some extent. Or, if some get their way. They might just decide to let the corporations police themselves. At least then, when a big environmental, or financial, “accident,” happens, and we’re all called in to pay the costs involved.
    We will perhaps have settled the issue of the Government always being the cause.

    • MasterWes

      That just happened yesterday, as an example. FEMA has authorized disaster funding for the damage done by the West, Texas fertilizer plant explosions.

      That disaster was ENTIRELY man-made, both by the company and the regulating agencies at both the state and federal levels.

      Meantime, we have the Tea Party still whining about those same FEMA funds going to the victims of a totally preventable incident – Hurricane Sandy.

      What is wrong with that picture?

      • charleo1

        The other day, FEMA was denying assistance. It sounds like some
        arms were twisted. Politics! It’s always a boondoggle, if the money
        is spent in the other fellow’s district. Yet, Republican Congressman
        from TX. Joe Barton, apologized to BP executives for the way he
        thought they were being, “shook down,” was how he put it, to pay
        for the damages. This from a guy who sided with his Party in
        demanding offsets for the Joplin disaster, and Hurricane Sandy.
        The Congress just approved the first head of the ATF since 2006.
        Guns, of course. Alcohol, and tobacco are not the problem. If one
        of their lobbies demand it, they’ll cut the funds. It corrupts the entire
        system. I didn’t know, until a sixty minutes piece, Congress will not
        allow computers to be used in gun registration. All work must be done by hand, for the entire Country, with a small staff, is one example. Another way they work around regulations, is to limit the size of the operation subject to Federal inspection. A pill maker poisoned dozens of people with e coli a few months back. Several people died. The operation under State rule, was filthy, inspections were always announced beforehand, and hadn’t been carried out in 3 years. Yet, it’s always, let the States handle that, and close down
        the EPA!

        • dtgraham

          Very well said charleo. The root problem is the need for unbelievable amounts of money to successfully run an election campaign and an unlimited number of big money lobbyists ready to fill that need.

          Michelle Bachmann raised 26 million dollars in her last race. Boehner needed 22 million apparently. Elizabeth Warren raised 42.5 million to defeat Scott Brown. The cheapest Senatorial race won, by far and away, was Angus King’s at 3 million…though that was entirely out of the norm across the nation.

          Of course Citizen’s United poured gas on that, resulting in the creation of the no limit Super Pacs. Any amount of money goes now. When you need that kind of money, wealthy lobbyists can talk you into voting for, and supporting, virtually anything. It produces the best government money can buy. Ordinary voters can’t compete with that. Until this is ever addressed it’s pretty much hopeless.

          There may be a precious few that are incorruptible such as Bernie Sanders and possibly Elizabeth Warren, but you wouldn’t need more than one hand to count them all, and you likely wouldn’t even need one hand.

          • charleo1

            The root of the problem, is exactly right! It’s a mess already.
            And just how long after Citizens United? The big races are
            harder right now. Presidential election cycles are harder.
            But, just look at the States! And races for House Reps!
            As we’ve seen in mid-terms, fewer voters, are key.
            That’s the strategy. Dump a ton of money into races for
            State Legislatures, and Governors, Nation wide. Then, they
            can control a lot around the ballot boxes, as we’ve seen.
            Money is truly no object. Dump another ton in the districts
            for U.S. Reps. Gerrymandered districts, by State Legislatures, helps here. Right now, I would estimate there are as many as
            50 million Americans, maybe more, that live near these
            districts, that have no influence whatsoever, on their representatives by their vote. So ensconced are they in their made to order districts, and their bottomless war chests. And these tend to be the most extreme, and ideologically driven people to hold public office, I can recall. And practically, unaccountable to no one, save their campaign contributors.
            Call me crazy. But I consider many of them as much a menace as any Mid-Eastern terrorist. Their potential for harm
            being every bit as imposing.

          • dtgraham

            That’s the thing charleo. I think everyone has pointed that out, both on internet websites and by the pundit class on political talk shows.

            There are now so many heavily gerrymandered Republican districts around the country that these people no longer fear a legitimate general challenge from the center or center/left. It’s just about how crazy right can you get? You don’t need to worry about the total popular vote swinging the district over to the Democrats because the Democratic vote has been shifted over to a small number of highly packed Democrat districts, some of which represent several times the population of the highly partisan Republican districts. Yet, both count equally in the Congress.

            While one has far more total votes than the other, they both count equally in the Federal or State Congress. That’s how it’s done.

          • charleo1

            I see. Well, that makes sense. We live to learn. Thanks!

      • rustacus21

        … which is what’s so D#&N frustrating about THIS administration!!! No regulators doing a meaningful visit ( & review of adherence to policies since the CLINTON YEARS!!! & we the tax payers, foot the bill!?!? ( The plant owners, w/their tax cut cash still in the bank from this last 12 years, would be more conscientious if the law operated w/they, the way they do w/us Middle Class & poor citizens when we smash into someones porch or run over a mailbox, even if a vehicle defect is discovered! I’m thinking more that the 2010 election left a big hole in our political terrain, but there still comes a time to stand & fight for the people that elect one to office. We’re still waiting – 5 years & counting…

      • charleo1

        What’s wrong with the picture is the T-Party, and their race backwards to some reincarnation of the feudal system.

  • dtgraham

    Congress wants to save money? One thing they can do is get rid of the Office of the Comptroller of the Currency now that Elizabeth Warren’s baby (the CFPB) is up and running. They’re one of the bank regulators and they’re responsible for mortgage servicing. There have been so many people wrongfully foreclosed on, with their supposed oversight, that I can’t believe they even still exist.

    After the robocalling scandal, where the banks were fraudulently filling in documents, there was an Independent Foreclosure Review designed to restore faith to the mortgage markets. That was the reason for the review and, eventually, the basis for the grotesquely small settlement to homeowners. The reason is that when the OCC conducted a review of that scandal, they were obviously simply trying to make themselves and the banks look better instead of restoring the faith that they were charged with. The OCC conducted a review of the robocalling scandal in April 2011, just a few months before the Consumer Financial Protection Bureau came on board. The CFPB would have done this if the OCC had just waited, but I’m quite sure that the OCC didn’t want the CFPB to be in charge of this because the OCC have been known to be very kind to the banks and bury the bank’s bodies. They’ve also been known to lie on behalf of the banks, which they did in this Independent Foreclosure Review.

    They came out with a number that said only 4.2% of borrowers had an error in their mortgage. Well, the government has an auditor called the Government Accountability Office that said the OCC did not come up with a systemic methodology. They didn’t tell each bank HOW to figure out where there were errors. They didn’t have a series of consistent categories and they basically found out that there was no way you could have calculated one consistent error rate across all of the banks due to there being no consistent methodology. It was reverse engineered to make the banks look as good as possible. When they said there was a 4.2% error rate, they were lying.

    The amount of money that was involved in the totality of the wrongful foreclosure settlement was less than the treasury department gave to Goldman Sachs to cover Goldman’s exposure to AIG, and nobody said anything then. The moment home owners needed help, moral hazard was raised. Goldman just got a cheque for 12 billion dollars. All of the mass and wrongful foreclosures in the nation only got two thirds of that, which is why home owners were getting cheques for a whopping $500.00 while bank’s consultants were paid $250.00 per hour to review home owner’s files. The amount of money in that settlement was insanely low.

    The OCC is the paradigm of a broken, fraudulent, regulatory body. It has been in the back pocket of the banks for a long time. In 2003–pre crash–a number of Attorney Generals went to court to try and open up what they saw, already, as a brewing subprime scandal. The OCC came in on the side of the banks to stop them. They had to litigate all the way to the Supreme Court against, incredibly, the regulator. The OCC were covering for the banks and actually opposed mortgage write downs that would have benefited home owners…and saved the economy. They wanted to protect the banks and not the entirety of the economy. They should be eliminated.

  • Mark Forsyth

    And this is not the only instance where hands are tied.Every investigation by the EPA into ground water contamination due to hydro-fracking ops. has been curtailed.Gee,I wonder how that happened!