Trouble With Vatican Bank Mirrors Woes in U.S.

Lawmakers in the U.S. and Europe are calling for reforms of the financial system.

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Now that the smoke has cleared—figuratively and literally—in Vatican City, one of the many issues facing the new head of the Catholic Church is pressure to clean up the Vatican's finances.

On the one side are those seeking greater transparency. On the other are those seeking to preserve the status quo and continue to operate under a blanket of secrecy.

The Vatican Bank and America's banks have much in common—both have lost their way, and now efforts are underway to rein them in.

The Vatican Bank was created in the 1940s to finance efforts to root out Communism in Eastern Bloc countries. Today, it's said that the bank helps the Vatican operate in places such as Cuba. A noble beginning to be sure, but in recent years there have been allegations of money laundering and the disappearance of millions of dollars.

[READ: 10 Things You Didn't Know About Pope Francis]

The scandal and controversy that has recently marred the Vatican Bank has parallels to the scourge of lawlessness some critics say rules Wall Street institutions.

This week, the Department of Justice found that the five banks that agreed to a $25 billion settlement to resolve fraudulent foreclosure claims attempted to hinder an investigation into their practices.

It's exactly this type of behavior several lawmakers, including Sen. Elizabeth Warren, hope to combat with tougher action against wayward banks.

"What does it take, how many billions of dollars do you have to launder from drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution," Warren, D-Mass., asked during a recent Banking Committee hearing.

[FLASHBACK: Do Most Catholic Bishops Support Obama?]

Over the years both the Vatican Bank and banks in the U.S. have lost their way. Now, finally, the people are saying enough.

In Italy, all eyes will be on Pope Francis to see if he is willing to pull off the veil of secrecy surrounding that financial institution and clean up the corruption, while in the U.S. it will be up to our lawmakers to decide whether, as U.S. Attorney Eric Holder recently declared: "Banks in America are too big to fail," or if they have what it takes to clean up the banking industry.

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  • Real estate attorney Roy Oppenheim left Wall Street for Main Street, founding Oppenheim Law with his wife in 1989 in Fort Lauderdale, Fla. He is vice president of Weston Title and creator of the South Florida Law Blog, named the best business and technology blog by the South Florida Sun-Sentinel. Follow Roy on Twitter at@OpLaw or like Oppenheim Law on Facebook.