In her first appearance as a member of the Senate Banking Committee, Elizabeth Warren (D-Mass.) came out swinging.

"The question I really want to ask is about how tough you are," Warren said to the seven top financial regulators who appeared this morning to discuss implementation of the Dodd-Frank Act. "When is the last time you took the biggest financial institutions on Wall Street to trial?"

She prefaced her questions with an acknowledgment: "I’ve sat where you sit, and it’s harder than it looks." As the original force behind the creation of the Consumer Financial Protection Bureau, Warren at times was put through the wringer when she testified before Congress.

But that didn’t mean she went easy on the witnesses on February 14: U.S. Department of the Treasury Under Secretary for Domestic Finance Mary Miller; Federal Reserve System Governor Daniel Tarullo; Federal Deposit Insurance Corp. Acting Chairman Martin Gruenberg; Comptroller of the Currency Thomas Curry; CFPB Director Richard Cordray; U.S. Securities and Exchange Commission Chairman Elisse Walter and U.S. Commodity Futures Trading Commission Chairman Gary Gensler.

"We all understand why settlements are important, that trials are expensive," she began. "But we also understand that if a party is unwilling to go to trial, either because they’re too timid or because they lack resources, that the consequence is, they have a lot less leverage in all the settlements that occur."

While recognizing that the regulators have achieved some "landmark settlements" with mega-banks, Warren argued that "we face some very special issues with big financial institutions."

She continued, "If they can break the law and drag in billions in profits and then turn around and settle, paying out of those profits, they don’t have much incentive to follow the law. It’s also the case that every time there is a settlement and not a trial, it means we didn’t have those days and days and days of testimony about what those financial institutions had been up to."

So she queried the panel: "Tell me a little bit about the last few times you’ve taken the biggest financial institutions on Wall Street all the way to a trial."

Spectators at the hearing erupted in applause. As for the regulators—there was silence. "Anybody?" Warren asked.

Office of the Comptroller of the Currency head Curry took a stab at it. "The primary motive for our enforcement actions is to identify the problem and then demand a solution to it," he said.

"And then you set a price for that," Warren interjected. "It’s effectively a settlement."

"We’ve actually had a fair number of consent orders," Curry said. "We do not have to bring people to trial."

"I appreciate you don’t have to bring them to trial. My question is, when did you bring them to trial?" Warren asked again.

"We have not had to do it as a practical matter to achieve our supervisory goals," he said.

Warren then turned to Walter from the SEC with the same question.

"We truly believe we have a very vigorous enforcement program," Walter said. "We look at the distinction between what we could get if we go to trial, and what we could get if we don’t."

"I appreciate that. That’s what everybody does," Warren said." The question I’m really asking is, can you identify when you last took the Wall Street banks to trial?"

"I will have to get back to you with the specific information," Walter replied.

Warren tried again. "We’ve got multiple people here. Anyone want to tell me about the last time you took a Wall Street bank to trial?"


Warren concluded, "There are district attorneys and U.S. attorneys who are out there every day squeezing ordinary citizens on sometimes very thin grounds, and taking them to trial in order to ‘make an example’ as they put it," she said.

"I’m really concerned that ‘too big to fail’ has become ‘too big to take to trial.’ That just seems wrong to me."

Cue another round of applause from the spectators.

Jenna Greene can be contacted at