Sen. Elizabeth Warren eviscerates smug regulator who now defends financial institutions.
Senate Republicans, having finally returned from a seven-year vacation, held a hearing on Tuesday to “assess the effects of consumer finance regulations.”
The hearing was little more than a way for the GOP to look like they were actually doing something and to sing their praises for deregulation in the hopes that Wall Street was watching.
It’s too bad for them that Elizabeth Warren also showed up for her job that day and, in so doing, completely eviscerated the Republicans’ key witness. And too bad for that witness who seemed to have been given the impression that he was walking into a friendly little sit down. He did not see it coming.
Leonard Chanin, former Deputy Director of the Division of Consumer and Community Affairs at the Federal Reserve Board, took it pretty well and managed to maintain a smug look of superiority as Warren said, “Of all the people who might be called on, I am surprised that my Republican colleagues would choose a witness who might have one of the worst track records in history on this issue.”
As Warren pointed out during her seven-minute-long tirade, Chanin “helped lead the Federal Reserve division that refused to regulate deceptive mortgages — including the subprime lending that helped spark the crisis.” Warren noted that the bipartisan Financial Crisis Inquiry Commission called Chanin’s lack of oversight while at the Federal Reserve a “pivotal failure” and the “prime example” of the kind of inept and incompetent regulatory approach that allowed the crisis to happen.
“You did essentially nothing,” Warren told Chanin, who has since left the Fed to, not surprisingly, work for a private law firm advising big banks. “Now, your failure had devastating consequences.”
Chanin was invited to the hearing by Republicans to argue against regulations like those in Dodd-Frank.
“There was simply no data presented to the Fed on a statistical basis that suggested that there was a meltdown in the mortgage market in 2005 or 2006,” Chanin said smugly.
“I’m sorry, are you saying there were no data in the lead-up to the financial crash that showed the increasing default rates on subprime mortgages and what they were doing to communities across America? Did you have your eyes stitched closed?” Warren interrupted with obvious incredulity.
“There was anecdotal evidence, to be sure,” Chanin replied.
“Oh my God,” Warren gasped. “If you are still defending your time at the Fed,” Warren said, “that raises even more questions about your judgement.”
“So when you talk now about how certain regulations are too costly or too difficult to comply with, you sound a lot like you did before the 2008 crisis when you failed to act. So my question is, given your track record at the Fed, why should anyone take you seriously now?”
Chanin refused several times to answer Warren’s question about his view of financial regulation. That’s when Warren really went after him.
Watch the masterful take down in the video below.