New York (CNN Business) Senator Elizabeth Warren believes the regulatory system is rigged in favor of "big, rich banks."

The Massachusetts Democrat slammed the Federal Reserve on Tuesday for a "backroom" bank merger review process that never results in acquisitions getting blocked.

"Your approval process in itself appears to be a rubber stamp. Everything is happening behind closed doors," Warren told Fed chief Jerome Powell during a Senate hearing.

Warren, a presidential candidate, took issue with a practice the banks use to privately discuss potential deals with Fed staff members — and then quietly withdraw merger applications if there's opposition. The public, on the other hand, only gets to weigh in after the merger is announced.

"You and the banks get together in the back room and grease the wheels before the merger is announced," Warren said.

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