June 26, 2019

Harris, Porter Announce Bill to Empower State AG Enforcement of Banks

WASHINGTON, D.C. – U.S. Senator Kamala D. Harris (D-CA) and Congresswoman Katie Porter (D-CA-45) on Wednesday announced the Accountability for Wall Street Executives Act of 2019, legislation that will allow state attorneys general and other state law enforcement to issue subpoenas during the course of investigations regarding compliance with state law by national banks.

“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,” said Senator Harris. “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.”

“No bank should be Too Big to Jail,” Congresswoman Porter said. “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.”

Joining Senator Harris and Congresswoman Porter on the bicameral bill are Senators Hirono (D-HI), Feinstein (D-CA), Gillibrand (D-NY), Merkley (D-OR), Blumenthal (D-CT), and Warren (D-MA).

The Accountability for Wall Street Executives Act would:

  • Clarify that state attorneys general have visitorial authority to conduct oversight of federally-chartered national banks by to issue subpoenas to inspect bank records and interview bank executives.
  • Repair language in the National Bank Act that the Supreme Court interpreted as limiting the visitorial powers of state law enforcers when addressing compliance with state law by national banks.
  • Upon request, permit subpoenas for suspected violations of real estate lending laws; requiring specific information pertaining to loans, services, and products offered from the bank in question. With this subpoena power, genuine law enforcement becomes possible.
  • Ensure there will always be at least two “cops on the block” to ensure federally-chartered banks are complying with state financial protection laws and avoiding the kinds of risky bets that would contribute to another financial crisis like the mortgage scandal that caused the Great Recession.

The Accountability for Wall Street Executives Act has received support from Public Citizen, the Center for Responsible Lending, the Democratic Attorneys General Association (DAGA), and the National Consumer Law Center (on behalf of its low income clients). 

As Attorney General of California, Senator Harris created a Mortgage Fraud Strike Force within the California Department of Justice to investigate and prosecute misconduct at all stages of the mortgage process and in February 2012, she secured an unprecedented settlement with the nation’s five largest banks, securing $20 billion in financial relief for California homeowners flattened by the foreclosure crisis. Harris also sponsored the California Homeowner Bill of Rights, a package of laws instituting permanent mortgage-related reforms.

For full bill text, click here.

For further background on the bill, click here.