Describing it as a policy of “too big to jail,” Oregon Senator Jeff Merkley is blasting the U.S. Department of Justice for offering “deferred prosecutions” to large financial institutions, in particular a deal struck last week with banking giant HSBC.

Last Tuesday, the Justice Department entered into a deferred prosecution agreement with HSBC related to more than $800 million in narcotics proceeds that drug traffickers laundered through the bank's Mexican and American affiliates, as well as over $600 million in transactions that violated U.S. sanctions against Cuba, Iran, Libya, Sudan, and Burma. As part of the settlement, HSBC agreed to a $1.9 billion fine.

In a letter to Attorney General Eric Holder, Merkley criticized the government's use of deferred prosecution agreements when confronted with charges brought against financial institutions like HSBC, Standard Chartered Bank, and ING Group. He has demanded an full explanation of why these agreements are used so frequently in lieu of criminal prosecutions.

“Four years after the financial crisis, the Department appears to have firmly set the precedent that no bank, bank employee, or bank executive can be prosecuted even for serious criminal actions if that bank is a large, systemically important financial institution,” he wrote. “The best way for a guilty party to avoid jail time may be to ensure that [they are] employed by a globally significant bank. The Department's deferred prosecution agreements may offer something in the way of promises of future compliance, but they look sorely lacking in justice and accountability. “

Merkley cited, as evidence, a comment by Assistant Attorney General Lanny Breuer. In deciding not to prosecute, the Department considered the “collateral consequences” of its decision on the financial system, Breuer said, adding: “If you prosecute one of the largest banks in the world, do you risk that people will lose jobs, other financial institutions and other parties will leave the bank, and there will be some kind of event in the world economy?”

“Refusing to prosecute on the grounds of financial stability is troubling from the perspective of ending ‘too big to fail,'" Merkley wrote. "The Dodd-Frank  Act, which declared some institutions to be systemically important financial institutions subject to tougher regulation, did not declare that those institutions would be exempt from criminal prosecution."