After the stock market crash of 1929 an inquiry was set up by the Senate Committee on Banking and Currency to find out the root causes. This inquiry was basically a farce (sound familiar) until one Ferdinand Pecora was put in charge.
Pecora was a former assistant district attorney for New York County and he pursued his job like a pit bull. Interestingly enough his work caused the president of National City Bank to resign out of embarrassment, National City Bank was the forerunner to today’s Citibank. Pecora’s work became known as the Pecora Commission and was essential in getting to the bottom of the causes of the Great Depression and ensuring they never happened again.
A similar commission was set up after the financial panic of 2008 called the Financial Crisis Inquiry Commission, it was headed by Phil Angelides. While some referred to it as the New Pecora Commission, it was nothing of the sort and in reality was closer to the three predecessors of Ferdinand Pecora – it was appeasement at its best.
Fast forward to 2013 and a new congress in which a new Senator from Massachusetts has taken office, Elizabeth Warren. If you are not familiar with Elizabeth Warren she has been one of the few people to stand up to Wall Street. Warren now holds a seat on the Senate Banking Committee and is widely feared on Wall Street. It hasn’t taken long and Warren has already come out swinging.
Warren has started with foreclosures and according to a Huffington Post article:
“In a letter to the Office of the Comptroller of the Currency and the Federal Reserve, Sen. Elizabeth Warren (D-Mass.) and Rep. Elijah Cummings (D-Md.) wrote that “additional transparency” was necessary to ensure the confidence necessary “to speed recovery in the housing markets.” They asked regulators to turn over the results of the performance reviews of the independent contractors hired to examine the loan files, as well as detailed information about the reviews’ preliminary results, to determine the extent of the harm to the 500,000 people who applied to the program.”
I know Warren is a Senator and Pecora wasn’t, but could this finally be the beginning of the Real New Pecora Commission – does Pecora’s spirit live on in Elizabeth Warren?
Stay tuned, we are about to find out.
Scott Dauenhauer, CFP, MSFP, AIF