In her continuing fight to hold accountable the banks responsible for the economic meltdown, Sen. Elizabeth Warren (D-MA), along with Sen. Sherrod Brown (D-OH), is demanding Congress investigate claims that the Federal Reserve Bank of New York (FRNY) has been going easy on the firms it regulates.
Members of the Senate Banking Committee, Warren and Brown, called for the investigation after Carmen Segarra, a former examiner at the FRNY, released recordings that she says show her bosses told her bend the rules for private banks, reported the Huffington Post.
Segarra said she was fired in 2012 in retaliation for “refusing to overlook Goldman’s lack of conflict of interest policy and other questionable practices,” said HuffPo.
These included attempts by Segarra’s colleagues to get her to change notes from meetings with Goldman Sachs so there would be no record of executives’ comments about the bank’s preferential treatment of Sachs.
The tapes went public on Friday in reports from ProPublica and This American Life, and Warren and Brown immediately began calling for Congress to investigate.
In a statement, Warren said:
“Congress must hold oversight hearings on the disturbing issues raised by today’s whistleblower report when it returns in November, because it’s our job to make sure our financial regulators are doing their jobs. When regulators care more about protecting big banks from accountability than they do about protecting the American people from risky and illegal behavior on Wall Street, it threatens our whole economy. We learned this the hard way in 2008.”
Sen. Brown demanded a “full and thorough investigation,” saying that “American taxpayers and regulators that will fight each day on their behalf.”
During an interview with ProPublica and This American Life, Segarra said she was shocked when a senior compliance officer from Goldman Sachs basically said that “once clients were wealthy enough, certain consumer laws didn’t apply to them.”
After hearing that, Segarra tried to follow up on that comment. She said during her attempt, a Fed examiner said “…that point? Oh, you didn’t hear that.”
“I looked over at the New York bank examiner and the FDIC bank examiner,” said Segarra, “and we … looked at each other, and we said, ‘Yes, we did. We did hear that.’”
The Fed examiners response? “Well, [the Goldman executive] didn’t mean it.”
The problem is that yes, he absolutely meant it.
Unequivocally, 100 percent meant it.
The big banks thought they were above the law, and because they were “too big to fail” and getting special treatment from the Fed, they basically were. Now, through Warren’s never-ending fight against corruption, that hubris is coming back to haunt them and those who helped them destroy the American economy.