Illustration for article titled Obama Weighs In on Occupy Wall Street

President Obama again pushed for his jobs bill during a news conference on Thursday, challenging lawmakers who vote against it to explain that decision to American voters. But reporters wanted to know what the president had to say to people who are out of work, foreclosed on or barely above water — particularly those who have been demonstrating for three weeks now at the Occupy Wall Street protests.


"I think it expresses the frustrations that the American people feel — that we had the biggest financial crisis since the Great Depression, huge collateral damage all throughout the country, all across Main Street, and yet you're still seeing some of the same folks who acted irresponsibly trying to fight efforts to crack down on abusive practices that got us into this problem in the first place," he said from the White House East Room. "So yes, I think people are frustrated, and the protesters are giving voice to a more broad-based frustration about how our financial system works."

He continued that he's been trying to enact the financial regulatory reforms that passed in 2010 — holding banks and other financial firms accountable for risky activities, and requiring servicers to provide consumers with clear, easy-to-understand information on what they're purchasing, all supervised by a Consumer Financial Protection Bureau — but said that Republicans have held up its progress. Take, for example, Thursday's vote by Republicans on the Senate Banking Committee against the nomination of Richard Cordray as head of that financial-oversight bureau.


"Republicans have threatened not to confirm him not because of anything he's done but because they want to roll back the whole notion of having a consumer watchdog," Obama continued. "You've got Republican presidential candidates whose main economic policy proposals are 'We'll get rid of the financial reforms that are designed to prevent the abuses that got us into this mess in the first place.'

"That does not make sense to the American people. They are frustrated by it. And they will continue to be frustrated by it until they get a sense that everybody is playing by the same set of rules, and that you're rewarded for responsibility and doing the right thing, as opposed to gaming the system."

Why No Wall Street Prosecutions?

Despite Obama's touting of his attempts at regulatory might, Jake Tapper of ABC News pushed the president to explain the fact that his administration hasn't prosecuted any Wall Street executives who didn't play by the rules. This is where the president's good talk on financial regulation scaled back a bit.


"One of the biggest problems about the collapse of Lehman's and the subsequent financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn't necessarily illegal; it was just immoral or inappropriate or reckless," he said. "That's exactly why we needed to pass Dodd-Frank, to prohibit some of these practices."

And what about the practices that were illegal?

"The president can't go around saying, 'Prosecute somebody,' " Obama hedged. "But as a general principle, if somebody is engaged in fraudulent actions, they need to be prosecuted. If they violated laws on the books, they need to be prosecuted. And that's the attorney general's job, and I know that Attorney General Holder, U.S. attorneys all across the country, they take that job very seriously."


A Fair-Housing Advocate Responds

Obama's response, particularly on subprime lending not being "necessarily illegal," sounded oddly feeble. After all, this summer a Federal Reserve investigation into Wells Fargo alone found that more than 10,000 borrowers were inappropriately pushed into subprime mortgages or had loan documents falsified by bank personnel. Although the Federal Reserve crafted an $85 million settlement — and two lawsuits by the cities of Memphis, Tenn., and Baltimore have accused the bank of steering African Americans toward the predatory loans — so far the Justice Department has not pursued prosecutions.


"There's a degree to which the president's right in saying that some of the practices that proliferated weren't against any laws that existed at the time," Debby Goldberg, special project director for the National Fair Housing Alliance, told The Root. "At the same time, however, we're seeing there may be evidence that some of these practices did violate the fair lending laws. That's the kind of thing that we feel needs to be of high priority in terms of investigation and prosecution where violations are found."

Furthermore, Goldberg noted, even though the president said that his administration takes this seriously, he's had ample time to do more. "It's been a while," she said. "I think this administration has been more aggressive and more open to investigating these problems than the previous administration, but we have yet to see any real remedies come out for homeowners. That needs to happen urgently because every day that goes by means that more people are losing their homes."


Cynthia Gordy is The Root's Washington reporter.

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