Sen. Elizabeth Warren: Government Protected Wall Street, Not Families

Democratic Senator Elizabeth Warren has been one of the very few voices in Washington that has consistently spoken out about systematic governmental failures in protecting average Americans. A Harvard professor and author, Warren ran the Congressional Oversight Panel, which supervised the bank bailout spending and helped launch the Consumer Financial Protection Bureau.
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In a recent interview with Salon.com writer Thomas Frank, Warren expounded on the failures of the Obama Administration and resulting protection of the Wall Street elite, at the expense of ordinary Americans who were losing their homes and their jobs throughout the Great Recession.

In the interview and her recent book, “A Fighting Chance,” she discusses how huge financial institutions spent more than a million dollars each day on lobbyists in the 12 months preceding the financial reform debates. Meanwhile, there are almost no advocates arguing for the rights of minimum wage and medium-wage workers.

Our Miami consumer rights attorneys recognize that this is the kind of disparity that has widened the income gap, kept wages stagnant, made it tougher to get a bankruptcy and more probable those struggling will lose their home to foreclosure.

Warren notes how bankruptcy law in particular has hit average Americans hard. Bankruptcy, she notes, is a family’s last hope when they’ve been faced with serious financial problems related to illness, divorce, death or job loss. Yet in 2005, Congress passed a measure making it harder than ever for a family to attain this relief. Efforts at bankruptcy reform had been pushed by financial industry lobbyists for 10 years prior.

Warren was on the Bankruptcy Commission in 1995 when those efforts first began. She sought to be part of an independent panel that would weigh the interests of creditors and debtors and figure out where sensible recommendations to reform might be made. But instead, virtually the only people brought to testify were paid lobbyists for the financial institutions.

She says there was an effort to hear from families who had been bankrupted. However, there was (and to some extent, still is) an enormous social stigma surrounding the issue. Plus, coming to testify means taking a day off work and other hardships most struggling families couldn’t take on.

Thus, the reforms that passed largely favored creditors.

In the interview, she also discussed criticism of Democrats who some say talk a good game, but at the end of the day, always side with the elite. Warren said some of that is fair, but “We’re the only ones fighting back at all.” Currently, Republicans are working on measures that would roll back the consumer financial protections of the Dodd-Frank Act.

For example, Sen. Mitch McConnell of Kentucky has said if Republicans win the Senate majority, his top objectives will include repealing the health care law and scrapping a number of the reform protections under Dodd-Frank. In particular, he wants to see an end to the Consumer Financial Protection Bureau. Of course, the agency hasn’t done as much as some might have hoped, but in three years, it has recovered more than $4 billion for families cheated by large corporations and banks.

As U.S. Attorney General Eric Holder prepares to step down, Warren said she plans to grill any new candidates on plans for prosecution of bank executives and their institutions.

She said part of the problem is that the Justice Department, banking regulators and policymakers only routinely hear from Big Banks. Rarely do they consult with those who were cheated on their mortgages or were tricked on their credit cards. The whole idea of the CFPB was to serve as a vehicle to enforce existing laws and to press for greater consumer protections.

She criticized the fact that the people most penalized for the mortgage crisis were average Americans, while those who knowingly sold toxic mortgages got off scot-free.

She talked as well about necessary college tuition reforms (“I grew up in an America that was investing in its kids. That America is gone.”), how Obama, while championing the creation of the CFPB, still “picked Wall Street” over the rest of us and how voices and votes ultimately have the ability to overcome concentrated money and power.

If you’re battling foreclosure in Miami or the surrounding areas contact Bruce Jacobs & Associates for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Debt Warriors with Bruce Jacobs,” discussing foreclosure topics that matter to YOU.

Additional Resources:
EXCLUSIVE: Elizabeth Warren on Barack Obama: “They protected Wall Street. Not families who were losing their homes. Not people who lost their jobs. And it happened over and over and over” , Oct. 12, 2014, By Thomas Frank, Salon.com
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The “Great Wage Slowdown” Has Hindered American Workers, Oct. 20, 2014, Miami Foreclosure Defense Lawyer Blog