Tags: Harvard | Professor | Bankers | Customers | Trash

Harvard Professor: Bankers Treat Customers Like Trash

Thursday, 11 Feb 2010 09:38 AM

Harvard professor and bailout watchdog Elizabeth Warren says that Wall Street bankers have treated customers like trash.

"Banking is based on trust,” Warren says.

“The banks get our paychecks and hold our savings; they know where we spend our money and they keep it private. If we don't trust them, the whole system breaks down,” Warren recently wrote in The Wall Street Journal.

“Yet for years, Wall Street CEOs have thrown away customer trust like so much worthless trash."

Banks and brokers, Warren says, have sold deceptive mortgages for more than a decade, and financial wizards made billions by packaging and repackaging those loans into securities.

And all the while, “federal regulators played the role of lookout at a bank robbery, holding back anyone who tried to stop the massive looting from middle-class families.”

“When they weren't selling deceptive mortgages, Wall Street invented new credit card tricks and clever overdraft fees,” Warren notes, and "squandered what little trust was left" when they took taxpayer bailouts.

Warren calls on Wall Street to earn back trust by supporting a strong consumer protection agency designed to root out the kinds of abuses that helped lead to the financial crisis.

She says this new agency would protect borrowers from abusive lenders by policing mortgages, credit cards and personal loans.

Just two years after President Barack Obama helped Democrats pull in record Wall Street contributions — $89 million from the securities and investment business, according to the nonpartisan Center for Responsive Politics — some of his biggest supporters have become the industry’s chief lobbyists against his regulatory agenda, The New York Times reports.

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Harvard professor and bailout watchdog Elizabeth Warren says that Wall Street bankers have treated customers like trash. Banking is based on trust, Warren says. The banks get our paychecks and hold our savings; they know where we spend our money and they keep it...
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Thursday, 11 Feb 2010 09:38 AM
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