Sen. Kamala Harris (D-CA) and freshman Rep. Katie Porter (D-CA) are teaming up on legislation to hold banks and Wall Street executives accountable.
The bill, the Accountability for Wall Street Executives Act, would allow for state attorneys general and state law enforcement to conduct oversight of national banks regarding compliance with state law, including giving them the ability to issue subpoenas to examine bank records and interview bank executives.
The goal of the legislation is to deter the conditions that, experts say, led to the subprime mortgage crisis in the late aughts. And none of the major banks would seem to be immune.
Deutsche Bank, which is now under criminal investigation for possible money-laundering lapses including allegedly suspicious activities linked to entities tied to Donald Trump, would be subject to subpoenas if there was reason to believe that it too was not complying with state financial protection laws, according to a Harris aide. Though a Treasury Department official disputed that it would arguing that its primary activities are regulated by the State of New York and the Federal Reserve.
“As a former attorney general, I know firsthand how vital it is for state law enforcement to have the tools needed to conduct thorough investigations in order to hold bad actors accountable,” Harris, a 2020 Democratic presidential candidate, said in a statement. “Congress must act to restore authority to state attorneys general to conduct oversight of national banks and ensure their compliance under state law. This bill will help put in place an additional layer of accountability for banks, which will protect consumers and prevent the type of illegal behavior that caused the Great Recession.”
The legislation seeks to amend a 2009 Supreme Court decision which determined that the Office of the Comptroller of the Currency, a bureau within the Treasury Department, had exclusive rights to conduct oversight of federally chartered banks. It would enable state attorneys general to issue subpoenas for possible violations of real estate lending laws and ensure that federally-chartered banks comply with state financial protection laws in order to stave off the possibility of another subprime mortgage crisis.
Initially, the bill was introduced in the Senate in late 2017, but now it is bicameral and there are hopes that with Porter playing a prominent role in the House Committee on Financial Services, it can pass in the Democratic-controlled House of Representatives.
“No bank should be Too Big to Jail,” Porter said in a statement. “I’m proud to join Senator Harris in introducing this bill that will empower law enforcement in every state to investigate banks for compliance with their state laws.”
Senators Mazie Hirono (D-HI), Dianne Feinstein (D-CA), Kirsten Gillibrand (D-NY), Jeff Merkley (D-OR), Richard Blumenthal (D-CT) and Elizabeth Warren (D-MA) are backing the bill as well. According to a Harris aide, it will be sent around for co-sponsors in the House after its formal introduction.