WASHINGTON -- Bank regulators and executives typically hope to escape a Senate Banking Committee hearing without becoming the subject of a viral video showing them humiliated at the hands of Sen. Elizabeth Warren (D-Mass.).
On Thursday, however, one witness was pleased enough with Warren's line of questioning that he actually applauded the Massachusetts Democrat toward the end of her remarks -- a highly unusual departure from custom.
The applause comes roughly five and a half minutes into the video above. While the applauder can't be seen, it was John H. Buhrmaster, president and CEO of the 1st National Bank of Scotia and Chairman of the Independent Community Bankers of America. The ICBA is the lobby shop for community banks.
Warren's question called out Wall Street for an old tactic: the practice of claiming that a lobbying group is not attempting to help huge New York-based banks with global reach, but rather merely looking to give a boost to the beleaguered local banker, today's Jimmy Stewart from "It's A Wonderful Life."
In reality, Warren's comments suggested, the request is generally being made for the benefit of Mr. Potter.
Warren noted that when new banking regulations were initially proposed, large banks predicted that the rules would doom smaller community banks. But even though those restrictions have gone into effect, she pointed out, those banks are highly profitable today. "We should be very skeptical of regulatory relief bills that are promoted as helping small banks but are pushed by ABA lobbyists for the big banks," she said, referring to R. Daniel Blanton, who was at the hearing representing the American Bankers Association.
Rather than passing bills on behalf of big banks, Warren suggested, perhaps lawmakers should strip the banks of their subsidies and look into prosecuting them instead.
"If we really want to help the community banks ... let's start by holding big bank executives accountable for committing fraud like we do with small bank executives," Warren said, drawing applause from Buhrmaster, the community bank representative.
CORRECTION: Due to an editing error, a previous version of this story stated incorrectly that Warren had put her question to Buhrmaster.
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