In New Attack on Big Banks, Clinton Channels Sanders and Warren
Policy + Politics

In New Attack on Big Banks, Clinton Channels Sanders and Warren

REUTERS/Carlos Barria

Hillary Clinton has had a difficult time inspiring young voters in the way that Barack Obama did in 2008 and to a lesser degree in 2012.  With Republican rival Donald Trump gaining ground in swing states, the Clinton campaign looks as though it’s taking its cue from the two Democratic politicians who have most recently found a way to fire up young voters: Vermont Sen. Bernie Sanders and Massachusetts Sen. Elizabeth Warren.

Both Sanders, who challenged Clinton for the Democratic nomination and Warren, who resisted calls to do so, inspired their most ardent supporters, in part, by criticizing large financial institutions. Banks, in particular, came under fire from both as a prime example of an industry that uses money and access to politicians to bend the rules in their favor, all the while taking the little guy for everything they could get.

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True or not, it resonated with a lot of young voters who are struggling with heavy student loan debt and who came of age during the Great Recession, which was sparked by a massive crisis in the financial services industry. It also made Sanders’ attacks on Clinton for what he described as a too-cozy relationship with Wall Street an extremely effective strategy that may well have created lingering problems for her among young voters.

On Monday, Clinton seemed to have sensed an opportunity to win back some of the ground she lost to Sanders on the issue. It came as Wells Fargo CEO John Stumpf appeared before the Senate Banking Committee to answer questions about the bank’s abusive practice of opening extra accounts for customers without telling them and then charging them fees associated with them.

Stumpf was apologetic in prepared remarks, saying, “I am deeply sorry that we failed to fulfill our responsibility to our customers, to our team members and to the American public.”

But he was met by bipartisan abuse from the members of the panel. When her turn came to question him, Warren accused Stumpf of “gutless leadership” and said that he ought to be investigated for possible criminal activity.

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Before the hearing kicked off, Clinton released an “open letter” to the bank’s customers that, in parts, read like a collaboration between Sanders and Warren.

“In America, we have faith that when we open up a checking account, we aren’t opening ourselves up to being scammed,” it begins, adding that there is an expectation that banks and credit unions are “fulfilling this basic responsibility to their consumers.”

“That’s why I was deeply disturbed when, last week, we found out that Wells Fargo had engaged in widespread illegal practices over many years,” it read. “The bank secretly opened up millions of accounts for customers without their consent – betraying their customers, misusing their personal information and leading many to be slapped with unjust fees and other charges.”

She wrote, “There is simply no place for this kind of outrageous behavior in America.”

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To fight future abuse, she promised that as president she would fight to “defend” the Consumer Financial Protection Bureau -- which investigated the Wells case and levied a massive fine on the bank -- from “Donald Trump, the Republican Party, and Wall Street lobbyists are desperate to dismantle this effective agency, which is dedicated solely to protecting consumers from unfair and deceptive practices.”

She called for “clawing back” the massive retirement bonus paid to the Wells executive that oversaw the unit implicated in the fraud.

“It’s hard to imagine that top executives were unaware of a problem that involved thousands of the firm’s employees,” she said. “After all, they imposed sales targets and compensation incentives in ways that led to this behavior.  And it’s frustrating that a bank can simply pay a fine and keep doing business as usual – with massive compensation for the executives responsible.”

While Sanders and Warren often speak openly about jailing bankers implicated in predatory financial dealings, Clinton only nodded in that direction, saying, “[T]hey must face appropriate legal consequences if they break the law.”

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However, she went right up to the edge of calling for the dismantling of the nation’s largest financial institutions.

“[W]e need to make sure that no financial institution is too big to manage,” she said. “I’ll put additional safeguards in place to address the risks that the big banks continue to pose to our system.  And if any bank can’t be managed effectively, it should be broken up.”

In the months since the Democratic primary, Warren and Sanders have both been firmly supporting Clinton, even if all of their supporters have not. In the less than two months between now and the election, Clinton is plainly hoping to swing more of their voters back into her column, and will be doing more and more to highlight positions like this one that are attractive to them.