On Regulating Wall Street, Brown And Warren Hold Starkly Different Positions

BOSTON — There may be no other issue in the U.S. Senate race in Massachusetts where the candidates’ positions are more distinct.

“You really have two candidates, one who’s backed by Wall Street, and one who Wall Street… has disdain for,” said Mark Williams, who teaches finance at Boston University.

Maybe the best place to see this contrast is in a single piece of legislation on which both Sen. Scott Brown and his Democratic challenger, Elizabeth Warren, left some big fingerprints.


Two years ago, Brown was one of three Republicans to join Democrats in a key vote that paved the way for final passage of the financial overhaul bill. The senator touted his pivotal role in passing the Dodd–Frank Wall Street Reform and Consumer Protection Act in a video to constituents.

“When some of my colleagues were saying that the bill would be bad for our economy, reduce lending and kill jobs, I kept an open mind, as I always do,” Brown says in the video. “Instead, I went to work to make it better. I spent my time working on amendments to protect our troops from financial scams and to make sure that mortgages are safer. I also worked with Congressman Barney Frank to avoid over-regulating the kinds of safe financial firms that we have in Massachusetts.”

Boston University executive-in-residence and former Federal Reserve examiner Mark Williams says before lending support to Dodd-Frank, Brown asked for some notable changes.

“Almost $20 billion worth of a direct tax that would have been paid by banks to cover the Dodd-Frank act was taken away, and it was actually pushed on taxpayers,” Williams said. “So that was a huge concession that helped bankers, but really hurt taxpayers.”

Brown also won a concession that allowed banks more wiggle room to take an ownership stake in hedge funds and private equity firms. Later, after it was enacted, his staffers worked to weaken the interpretation of the law at the U.S. Treasury.

“So bankers love — and they should love — this candidate, because he’s actually delivered the goods,” Williams said. “Where Elizabeth Warren has made it very clear that bankers and their bad behavior [are] enemy No. 1.”

Consumer Financial Protection Bureau

“It was exactly two years ago today that I stepped into the Rose Garden for the first time in my life, and stood next to the president,” Warren said last week at a campaign stop, celebrating her role in the Dodd-Frank law that the Republican she wants to unseat helped make a reality.

Long frustrated by credit disclosure forms that even her students at Harvard Law School couldn’t understand, Warren proposed and pushed for an agency to protect consumers. With her testimony and lobbying on Capitol Hill, the Dodd-Frank law created what’s now the Consumer Financial Protection Bureau.

And Warren got it up and running. When Senate Republicans blocked her from leading it, she decided to run for the Senate, much to the chagrin of Wall Street bankers.

Larry McDonald, a Falmouth native who worked on Wall Street for years, hosted a fundraiser for Brown last month and says Warren used the financial crisis to advance her agenda.

“The biggest problem I think anybody in finance has with Elizabeth Warren and the two years she spent at the Consumer Financial Protection Bureau,” McDonald said, “[is] she started with things that had nothing to do with the financial crisis, and I really think that annoys people on Wall Street.”

Warren takes issue with that assertion. She points to the agency’s work to simplify and clarify mortgage applications, and its recent rulings against financial services firms.

“Just a few weeks ago, that little agency discovered that one of the biggest credit card companies in the United State had been cheating its customers. It called them out for it, made them refund every penny they had taken, plus interest,” Warren said. “And then made them pay hundreds of millions of dollars in fines. You know, that’s [a] pretty good start for an agency like that.”

Wall Street has been backing Warren’s opponent in this Senate race. Finance professionals have given millions of dollars to Brown’s campaign. McDonald says they don’t like Warren’s hard-line stance, and they like that Brown has worked with them before.

“We need more people from the street helping the regulators — the academics and the bureaucrats — and I believe that people like Scott Brown want to do a more efficient job in financial reform,” McDonald said.

One example of deregulation that Brown likes to give is a new crowdfunding law he helped push through Congress that lets more people invest in startup companies.

“This is something that is a great opportunity to think outside the box and modernize and provide opportunities for investment and job creation,” Brown said of the law.

Massachusetts’ Decision

Massachusetts voters will have a big say in defining the next round of federal regulation of financial markets. Dodd-Frank is not a done deal. BU’s Mark Williams says many of the rules outlined in it still have to be implemented and funded.

“On the one hand you have Scott Brown who is focusing specifically on free enterprise and deregulation of the financial markets,” Williams explained. “And on the other you have the creator of the Consumer Financial Protection Bureau focused specifically on giving a tight leash on the banks in the financial industry that actually helped create the worst recession since the Great Depression. The difference can’t be any more stark than this.”

Is government suffocating economic growth by tying down the financial industry? Or does it need to keep a closer eye to make sure there’s not another financial crisis?

That choice is something Massachusetts voters have the power to make.

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  • Carlotta Tyler

    Finally, Curt has pointed out the key defining difference between Warren and her opponent.  He has been exposed as drinking from the Wall Street trough.  Although I am already a sustaining member, because of this fine piece of reporting, I am donating extra financial support to WBUR. 

  • Nacho Czar

    This is not “reporting.” This is a Warren campaign ad.

    • Dmatlack61

      Please help me understand your point. Which part do you take issue with? I’m trying to wade thru the biases of lots of reporting and opining. What offends you here? Thanks.

  • Joncarson

    The facts are the facts. Either you think wall street is over-regulated and otherwise has been a terrific wealth creator for the middle class over the last 10 years, or you think that wall street has been a big part of the problem. That wall street is putting large amounts of $$ into campaigns is beyond dispute as is the fact that Brown is getting all of the $$ in the mass race. The question is what does wall street expect for its $$? What must Brown deliver to pay the obligation- they aint giving this kind of dough for yucks.  

    I personally am getting tired of wall street titans whining about how put upon they are. The 2008 crash/depression did not come about because of over-regulation or liberal policies- republicans had total control and controlled the white house, the senate, the regulatory bodies, the supremes, and the house for the last 8 years (well the house was 6 out of 8) which is great because it takes out any ambiguity over whose policies were driving things.

  • Eric

    Brown voted FOR the legislation. He crossed the aisle. If more Senators and Congressman did that, maybe they would actually get something done in Washington.

    The BIGGEST positive is that Scott Brown crossed the aisle and helped get something DONE. Would Elizabeth Warren have done that?

    • Doubting Thomas

      It doesn’t matter if he would or wouldn’t. I personally hope the two parties go die in a fire, since the very next day our country and the world would be a better place.

      What DOES matter is if Scott Brown is the same quality of traitor to our republic as Secretary Paulson (let’s just write blank checks to the banks, no strings attached!). Because I believe in prosecuting people for committing crimes, and making them pay for their mistakes. If Scott Brown does not, then he does not deserve to be a Senator. He is an example of why I left the Republican party, never to return.

      I was already going to vote for Warren, because of her work in the CFPB. My hope was the Scott Brown would run elsewhere and win. All this article changed was whether or not I would feel sad voting Scott Brown out of office.

  • J__o__h__n

    Best coverage of the race so far.  Much better than the usual garbage on her heritage or appearance. 

  • ellen kagan

    I am a strong Warren supporter. And after this week’s despicable hijinks by Brown consultants and aides re Warren’s Inidan background, I pray he is not elected.  He is a despicable human being.

  • Ann Marie Joyce

    Regardless of Brown’s vote for Dodd -Frank,  it’s clear that he stands with the banks, etc. As article in Friday’s NYTimes noted, he’s worked behind the scenes to curb the Volcker rule and started doing so practically the day after the bill was passed.

  • Vivian Walworth

    My hope is that the differences re Dodd-Frank can be discussed this clearly in the forthcoming debate.  Brown’s emphasis on  Warren’s race is just an effort to avoid discussing such real differences as their positions re Dodd-Frank.

  • DeltaForce1

    I’m usually a Republican but after watching all the shenanigans that my party is doing, I’m switching and so are many of my friends. We are saddened by a party that has been taken over by the likes of the Koch brothers and will miss true patriots like Chuck Hagel. The rich use to hide their true objectives much better and I could buy their fiscal conservancy, but after making money hand over fist, their greed knows no end. When is enough, enough? How much more does a multi-millionaire really need? Citizens United passing is a dark day on our heritage…we the citizens must elect politicians that pledge to repeal that stain on our Democracy. Join me in supporting Elizabeth Warren and send a real message that fake tea baggers and their rich philanthropists are not fooling us. We need representatives that are more concerned with keeping jobs here, than sending them to China so that rich investors can bleed us dry. Wake up America!

  • budsan

    Sorry but a vote for Brown and you’re voting to end Social Security, Medicare and the beginning of numerous wars. Listen to their John McCain, McCain is calling for wars, invasions, bombings, even nuclear bombings,. Lets keep peace at any cost and not vote for any GOP candidates. Remember a Brown victory could help propel McCain into the Chairmanship of the Senate Armed Service Committee. Nobody wants a war except McCain, his Defense & Oil Industries plus the GOP. A vote for Brown and you’re voting to send our children and grandchildren off to war with senseless bloodshed. 

  • congressive

    Brown’s war-chanting, tomahawk-chopping, taxpayer-funded staffer video should have ended this race instantly.  The fact that it didn’t speaks very poorly of Massachusetts voters.

  • Missy

    We need both. Why don’t both candidates continue to do their work from where they have been doing it.

  • Ronaldtheriot25

    When Elizabeth wins, I’m only gonna have one more space on my wish list …That we had 533 more just like her< we could keep Sen. Bernie  Sanders on He's doing a great job….

  • Ronaldtheriot25

    As far as race goes, If I could vote for Elizabeth I would…And I wouldn’t care if she was Purple skinned ..what I know is she stared down the Wall Street banksters and made them blink…we desperately need that kind of courage in DC….

  • http://www.danablankenhorn.com/ Dana Blankenhorn

    I suspect Warren’s supporters are being distracted by the other issues in the campaign, when they should be focusing on this stark difference.

    Scott Brown = Wall Street. Elizabeth Warren = Main Street. 

  • odchere

    I was struck by the taunting way Senator Brown referred to Candidate Warren’s status as a Professor.  He sounded like a schoolyard bully and every condescending male boss I’ve ever had.

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