The day after PBS’ Frontline aired a devastating documentary slamming Lanny Breuer for failing to prosecute Wall Street banks and executives for crimes that led to the financial collapse, reports began circulating that he will resign as head of the Justice Department’s criminal division. For both housing and financial reform advocates, Breuer’s resignation couldn't come soon enough. Alongside departing Treasury Secretary Timothy Geithner, Breuer had come to symbolize the Obama Administration’s deference to the systemically important or “too big to fail” banks and its persistent inability to hold them to account, effectively designating them “too big to jail” as well.
Instead, the Justice Department, Treasury, and key regulatory and enforcement agencies like the Securities and Exchange Commission (SEC) and the Office of the Controller of the Currency (OCC) have consistently thwarted the enforcement of laws and implementation of policies favoring destitute homeowners and borrowers in deference to Wall Street, drawing fire not only from advocates but from former regulators and enforcers like Sheila Bair, Neil Barofsky and Eliot Spitzer.
Current reports of President Obama’s appointment of former prosecutor Mary Jo White to head the SEC are describing it as the strongest signal to date that he intends to crack down on Wall Street. But the time for sending signals is over; it’s time for action. With Breuer and Geithner on their way out, new leadership in place at the OCC and a tough appointee in line at the top of the SEC, the President may finally have the opportunity to get things right and fix what Wall Street broke. Will he seize it?