If that's the profile of their worst 20% of customers, why are they in so much trouble? MORE:

According to the most recent Fed G-19 statistical release, the average APR for customers who don't pay interest is 11.93%; for those who pay interest, 13.64%. Either way my new rate of a minimum of 17.99% is outrageous, even if I don't carry a balance (so I don't pay finance charges).

It may be more likely that I have been re-priced due to the "science" of behavioral scoring: I may live in a zip code or shop in stores where a lot of their other customers are deadbeats. Since I live in the burbs of our nation's capitol, this is troubling-- meaning the country is likely being run by deadbeats. But actually, according to the Fed's dynamic maps of credit card delinquency rates, I live in an area with very low delinquencies.

Maybe their supercomputers are programmed wrong. Probably the same computer that calculated their risk exposure from derivatives and currency default swaps. How's that going for ya? They've blown a gasket (legacy computers may have gaskets, who knows) and yellow lights are flashing on consoles that my shopping and card use profile has changed. Instead of my normal profile of marching through malls looking for dangerous toys, which is about the only time I visit one, perhaps I have a new updated profile in Citibank's South Dakota citadel. I guess Citibank's supercomputers have run an analysis predicting that I'm gearing up for a mall shopping binge tomorrow on Black Friday.

More likely, it means Citigroup is in worse trouble than even the front pages tell us. Despite the extremely favorable terms of the new Citigroup bailout, maybe it just isn't enough and they need me to kick in, too. (The Economist's View blog skewers the terms of the Citi bailout granted by Treasury Secretary Hank Paulson and the Fed.)

And if you are wondering when I would work in turkey and football, I thought we'd close with baseball. Last year Citi bought the naming rights for the new Shea Stadium (also built on the backs of taxpayers). Now that Citi has its own special taxpayer bailout, two New York City Councilmembers have proposed to re-name the new home of the Mets from Citi Field to Citi/Taxpayer Field:

Mr. Oddo quipped: “Not naming the field after Jackie Robinson in the first place: mindless. Tom Seaver stepping onto the new mound for the first time: timeless. Actually acknowledging the contributions of the hardworking taxpayer: priceless.”

Yesterday, U.S. PIRG Public Health Advocate Liz Hitchcock in DC, joined by PIRGs around the country, released (AP story) the 23rd annual PIRG Trouble In Toyland report. We were joined by numerous Representatives and state Attorneys General around the country, including the 2008 Consumer Product Safety Improvement Act's lead sponsor Rep. Bobby Rush (IL) and and key co-sponsor and fellow conference committee member Rep. Jan Schakowsky (IL) in Chicago. Both expressed outrage that the CPSC had issued a midnight regulation delaying the new law's ban on toxic phthalates in toys indefinitely, in defiance of Congressional intent. Chairman Rush has vowed a hearing at the earliest opportunity; Rep. Schakowsky joined fellow conferee Rep. Henry Waxman (CA) along with Senator Dianne Feinstein (CA) and Rep. Diane DeGette (CO) in a strong letter to the CPSC. Feinstein is chief sponsor of the phthalate ban; Sen. Barbara Boxer (also a conferee on the new law) had already sent her own letter blasting the action. According to our EPA-certified lab tests for the report, the "Silly Fish Squirters" pictured are made up of nearly one-half toxic phthalate chemicals by weight. Whenever the law's ban on sale of phthalate-laden toys takes effect, and we expect the CPSC's action will be reversed and that date will be 10 February 2009, toys will be limited to 0.1% maximum weight of each of six phthalates. More from the new report:

“While the Consumer Product Safety Improvement Act is a major step forward, many of its protections don’t take effect until 2009, so it’s still ‘buyer beware’ for this shopping season,” said U.S. PIRG Public Health Advocate Liz Hitchcock. “Worse, last week the CPSC told companies that they could keep selling toys with toxic phthalate chemicals until they ran out of them, despite the law’s clear prohibition against selling them after Feb. 10.”

According to the most recent data from the Consumer Product Safety Commission (CPSC), toy-related injuries sent more than 80,000 children under the age of five to emergency rooms in 2007. Eighteen children died from toy-related injuries that year.

The PIRG study is not intended to be comprehensive-- we go to just a few stores to show how easy it is to find hazards. Just because a toy is not on our list doesn't mean it is safe. Toygivers should download our"Tips for Toy Safety."

Arthur Bryant, executive director of the public interest law firm Public Justice, has a good editorial America's access to justice at risk in today's Trenton (NJ) Times. It's about the myriad threats to access to justice posed by a three-pronged attack by corporate lobbyists:

They are using many tactics, but three are critical -- federal preemption, mandatory arbitration, and class action bans. If these three succeed, most Americans can kiss many of their rights goodbye.

If you are still wondering how badly lack of enforcement and deregulation were critical factors leading to the financial meltdown, check out Binyamin Appelbaum and Ellen Nakashima's story Banking Regulator Played Advocate Over Enforcer-- Agency Let Lenders Grow Out of Control, Then Fail in today's Washington Post. The story explains how the the obscure Office of Thrift Supervision (OTS), an arm of Treasury that "regulates" savings-and-loans, didn't just fall asleep on the job, but actively aided and abetted deregulation. All the banks that have failed so far this year, from Countrywide and IndyMac on down, were OTS-"supervised."

When Countrywide Financial felt pressured by federal agencies charged with overseeing it, executives at the giant mortgage lender simply switched regulators in the spring of 2007. The benefits were clear: Countrywide's new regulator, the Office of Thrift Supervision, promised more flexible oversight of issues related to the bank's mortgage lending.

Today, Citigroup, once the nation’s largest and mightiest financial institution, has been brought to its knees by more than $65 billion in losses, write-downs for troubled assets and charges to account for future losses. [...] Citigroup’s woes are emblematic of the haphazard management and rush to riches that enveloped all of Wall Street. All across the banking business, easy profits and a booming housing market led many prominent financiers to overlook the dangers they courted.

Taxpayers, hold on to your wallets.

Anny Shin reports in today's Washington Post that the CPSC says that Some Toys With Banned Plastics Will Stay on Market. We don't think so. The story is based on a letter opinion to industry lawyers from Consumer Product Safety Commission general counsel Cheryl Falvey who says essentially that because consumer product safety standards have previously been interpreted to apply only to products manufactured after a ban date, that it's ok to keep selling inventory stocks of toys laden with toxic phthalates after the February 2009 ban on toxic phthalate chemicals kicks in. Funny thing is that Falvey's letter ignores and does not even discuss the bold-face underlined words in Section 108 of the new statute that says:

Beginning on the date that is 180 days after the date of enactment of this Act, it shall be unlawful for any person to manufacture for sale, offer for sale, distribute in commerce, or import into the United States any children's toy or child care article that contains concentrations of more than 0.1 percent of di-(2-ethylhexyl) phthalate (DEHP), dibutyl phthalate (DBP), or benzyl butyl phthalate (BBP).

Former New York Attorney General Eliot Spitzer, who took on unsavory Wall Street practices while federal regulators weren't watching out for small investors, has a Washington Post op-ed How to Ground The Street with some interesting ideas. Meanwhile, over at the New York Times, Eric Lipton and Steve LaBaton report on former Senator Phil Gramm: Deregulator Looks Back, Unswayed.

In two recent interviews, Mr. Gramm described the current turmoil as “an incredible trauma,” but said he was proud of his record. He blamed others for the crisis [...]

The papers are reporting that executives at former investment bank Goldman Sachs will not ask for or take bonuses this year. Goldman is now a financial services holding company under the wing of the Federal Reserve. My only question, dear readers, is this: How big a bonus are you supposed to get when your profits are down 70% through three quarters and it looks like a loss for the fourth? The good news here is maybe some of the other former Wall Street masters of the universe will do the same. To mix a few sensory metaphors, though, most of these guys are tone-deaf; meanwhile, the optics of excessive executive compensation in the current financial crisis just aren't that good (Washington Post: Growing Sense Of Outrage Over Executive Pay).

We've written before on what is worse than a consumer pet peeve. Thousands of consumers are injured seriously enough to go to the emergency room each year trying to open nasty hard plastic "clamshell" packaging intended to deter shoplifters. In today's New York Times, Brad Stone and Matt Richtel report on the possible end to "wrap rage" in their story Latest Marvel: Packages That Open Without a Saw.

House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid have named their 3 picks for a 5 member Congressional Oversight Panel required by the Wall Street bailout law enacted this fall. We have worked often with Harvard Law Professor Elizabeth Warren on consumer bankruptcy and credit card issues and also with AFL-CIO General Counsel Damon Silvers on investor protection and shareholder rights issues. Richard H. Neiman, Superintendent of Banks in New York, has given outstanding testimony and advice to the Congress on mortgage reform, regulatory restructuring and the need to preserve stronger state consumer laws. We also anticipate that next year the Congress will give serious consideration to Professor Warren's PIRG-backed proposal to establish a Consumer Credit Safety Commission. It would be modeled after the CPSC, with authority to recall or ban dangerous financial products, just as CPSC can recall or ban dangerous toys.

Register now for the free conference on Patents, Copyrights and Knowledge Governance: the next four years, to be held on January 12-13th, 2009 in Washington, DC. The conference is sponsored by the PIRG-backed Transatlantic Consumers Dialogue (TACD). Among the speakers will be two Nobel Prize-winning economists, Joseph Stiglitz and Eric Maskin.

UPDATE: New York Times story confirming Citi will jack rates. "The move appears to backpedal from a commitment that Citigroup executives made to Congress in early 2007 when they tried to fend off greater regulation by promising not to raise rates until an account expires."

Today's Wall Street Journal story Citi to Cut More Jobs, Raise Rates on Its Plastic (pd. subs. req'd) confirms rumors that Citibank plans to jack the rates (re-price) of good credit card customers for what appears to be no reason except the economy:

"The industry has recently experienced an unprecedented market cycle with severe funding dislocation and significant consumer credit deterioration driven by the mortgage crisis and rising unemployment. In light of these unprecedented developments and others, Citi will be repricing a group of customers in our Citi-branded consumer credit-card business in the U.S. to appropriately manage these risks," said John Carey, chief administrative officer of the credit-card unit.

Citi will consider increasing a customer’s interest rate only on the basis of his or her behavior with us -- when the customer fails to pay on time, goes over the credit limit, or bounces a checks.

We've joined a number of public interest, civil rights and housing organizations in support of a petition for appellate review of the decision in Cuomo v. Clearinghouse Association and OCC. In previous decisions, the court held that even in circumstances where the federal Office of the Comptroller of the Currency (OCC) recognized that national banks still had to comply with state fair housing and consumer laws, that only it (the OCC), not state attorneys general or bank supervisors, could enforce those state laws.

The 2004 decision by the Office of the Comptroller of the Currency to displace states’ longstanding enforcement power with respect to state consumer protection and anti-discrimination laws severely disrupts states’ traditional law enforcement regimes. It directly contravenes this Court’s precedents and turns a fundamental principle of federalism on its head. The notion that valid and binding state laws may be enforced only by the national government is both perplexing and contrary to principles of federalism embedded within the Constitution.

This law review article by bank law scholar Professor Arthur Wilmarth explains some of the wrong-headed analysis by the lower court in one of the two predecessor decisions leading to this petition, OCC v. Spitzer (New York's attorney general previous to Andrew Cuomo).

In his story U.S. Shifts Focus in Credit Bailout to the Consumer on Treasury Secretary Paulson's announcement that the government was shifting its bailout strategy to promote credit card and other consumer lending, Edmund Andrews of the New York Times points out that (1) "Fed officials appeared to be taken aback" [at the public announcement], (2) "taxpayers would be indirectly liable for the entire volume of lending" and (3) [the] "arrangement would bear a similarity to exactly the highly leveraged, and eventually disastrous, special-investment vehicles that banks like Citigroup created in countless numbers to hold, among other things, securities backed by subprime mortgages."

Paulson's spin is that the new program will directly help consumers. His old plan was supposed to help consumers, too, but that plan to buy bad assets only helped institutions, because they took the taxpayer money and ran. They didn't follow through and lend with the new money as they were supposed to. The money in the new plan is still going to banks but supposedly can only be used to help promote, leverage and securitize new lending. We'll see how Plan B goes, if it is actually implemented, since it appears that the Fed may not yet be fully on board. Meanwhile, Paulson still has no plans to help consumers, such as those in foreclosure, directly.

As Congressional, regulatory and judicial threats to the right of states to enact stronger state laws to protect consumer health and safety continue to mount, the National Conference of State Legislatures is compiling its anti-preemption resources on a page.

There is a free symposium from 9am-2pm tomorrow Friday at American University Law School. The symposium is called Dangerous Products: From Lead Toys to Tainted Drugs, A Discussion for Consumer Protection Professionals and the Media. It's co-sponsored with the American Association for Justice and is in Room 603 of the AU Law School, 4801 Massachusetts Avenue, NW - Washington, DC 20016 -- 202-274-4000. Here is the agenda. Among the highlights-- two professors will discuss new papers: The Social Costs of Dangerous Products: An Empirical Investigation, by Prof. Sidney Shapiro of Wake Forest School of Law, and Unavailable and Unaccountable: A Free Ride for Foreign Manufacturers of Defective Goods, by Prof. Andrew F. Popper of American University Washington College of Law.

House Financial Services Committee Chairman Barney Frank (D-MA) continues his legitimate skepticism at Treasury Secretary Henry Paulson's bailout strategy (Paulson release today), which pointedly does not involve helping the homeowners who are losing their homes through foreclosure: A good summary of Barney's view comes from a quote from the Australian Radio show AM:

BARNEY FRANK: As long as you have the foreclosure cascade, as long as you have mortgage-based securities decreasing in value so rapidly, you do not get out of the problem we are in.

The Center for American Progress Action Fund and the New Democracy Project have released a joint book with recommendations for the new administration. The book Change for America has several sections available online here. Among these is the chapter CPSC: Safety First written by Pamela Gilbert, who was executive director of the agency under President Bill Clinton; Pamela is a longtime public interest attorney who has also worked both at U.S. PIRG and Public Citizen. From her report summary:

The Consumer Product Safety Commission over the past eight years was run by political appointees who let the agency languish, promulgating few new regulations, announcing few new programs, and rolling back existing rules.

The most important thing that the new president must do to restore confidence in the safety of consumer products is to appoint a chair of the CPSC who has a proven commitment to consumer safety—not industry preferences. He or she should quickly address the shortage of experienced staff and low staff morale, follow through on congressionally mandated improvements to the agency’s authorities and testing laboratory, and establish new partnerships to enable it to do more with its limited resources. CPSC must also address new challenges, including the meteoric rise in imports of unsafe consumer products and any hazards associated with new technologies, such as nanotechnology.

Scholars at the Center for Progressive Reform (release) have issued White Paper #806: Protecting Public Health and the Environment by the Stroke of a Presidential Pen: Seven Executive Orders for the President’s First 100 Days. The Orders address (excerpted from the release):

1. Climate Change. Require all federal agencies to measure, report, and reduce their carbon footprints.

2. Climate Change. Direct all federal agencies to consider the climate change-related implications of their actions as part of their obligations under the National Environmental Protection Act.

3. Protecting Children from Toxics. Require all federal agencies to develop plans implementing an affirmative agenda to protect children from toxics, to account for the unique attributes of children when conducting risk assessments, and to stop discounting prospective benefits for children and future generations when conducting cost-benefit analyses.

4. Environmental Justice. Clarify key terminology for understanding environmental justice issues and require all federal agencies to conduct meaningful analyses of the environmental justice impacts of their actions, undertake steps to ameliorate environmental injustices, and commit to carrying out an affirmative environmental agenda.

5. Transparency in Government. Restore the presumption of disclosure under the Freedom of Information Act, limit the ability of agencies to avoid the transparency provisions of the Federal Advisory Committee Act, and introduce greater transparency into the regulatory review process conducted by the Office of Information and Regulatory Affairs.

6. Victims’ Right to Sue. Establish a strong presumption against federal agency preemption of more protective state health and environmental laws and institute a rigorous procedure for agencies to follow in order to overcome that presumption.

7. Public Lands. Establish the goal of ecological integrity as the baseline for making public land management decisions, revoke two Bush-era Executive Orders that improperly prioritized the goals of energy development over the statutory goals of sustainable land use, and broaden opportunities for public participation in land management decisions.

As Alan White points out over at the Consumer Law and Policy blog, yesterday's announcement of modest mortgage help from Fannie and Freddie won't help many people stay out of foreclosure at all. Worse, as the New York Times story White House Scales Back a Mortgage Relief Plan by Edmund Andrews describes, the tiny plan is nothing like the one that FDIC Chair Sheila Bair believes is needed and is prepared to roll out. Unfortunately, the bankers over at Treasury seem to want to help other bankers, not homeowners.

Shortly after Fannie Mae and Freddie Mac announced their new plan, Ms. Bair declared that it was inadequate and pointedly said that the government had spent hundreds of billions of dollars to bail out financial institutions like American International Group, the giant insurer. The plan “falls short of what is needed to achieve wide-scale modifications of distressed mortgages,” Ms. Bair said...

Banks claim that their use of tricky high fee schemes and penalty interest rates now imposed on many credit card holders on a hair-trigger basis is due to sophisticated risk models that show those consumers are going to go bad. Actually, there's another reason. The USA Today story Why banks are boosting credit card interest rates by Kathy Chu and Byron Acohido explains that the growth in securitization of credit card debt encourages banks to pile on higher fees and interest.

Here's why: When banks package and sell card debt, they pass along to investors some of the risk the debt will go bad. Yet, banks often get to pocket much of the profit from rate and fee increases on those accounts. Imposing higher fees on more accounts — without a comparable rise in risk — lets banks raise revenue and keep profits up, at customers' expense. Securitization has been a "major impetus" for banks to expand penalty fees and rates in recent years, says Adam Levitin, a Georgetown University law professor and card expert. Banks "have little to lose if they squeeze too hard (if consumers default), but a lot to gain if they can extract additional payments" from card users, he says.

Update: Gift card holders may be out of luck in retail bankruptcies in the LA Times explains that when companies file bankruptcy consumers lose the value of unused prepaid gift cards.

Original post: Over the last several years plastic payments, especially debit, have eclipsed cash and check transactions. Also, the Internet has provided a new portal for shopping and bill payments and has stimulated development of still more payment systems (Paypal, cell-phone payments, etc.). But the laws have not kept pace. So, the only way I will pay on the Internet is with a credit card. It's the safest way. You risk all the money in your bank account and more when you use check transfers or debit cards.

In addition, as banks added and increased fees without mercy or regulatory oversight, more and more consumers found themselves un-banked. Others found themselves on debt and fee treadmills. Meanwhile, check-cashers, payday lenders, rent-to-own stores and other high-cost lenders boomed as they were able to march through state legislatures enacting safe harbor laws that exempted their products from usury (interest rate ceilings) and other protections. Federal regulators and Congress ignored or even encouraged the trend.

The laws have not kept pace. The New York Times has some stories today on payment systems. First, the brief Social Currency by Rob Walker discusses prepaid debit cards. These cards (marketed by hip-hop stars and others) have fees, but do not always link to bank accounts. Debit cards in general are not as well protected as credit cards; debit cards not associated with bank accounts are less well-protected than bank account debit cards, and of course, do not come with the possible savings benefits of bank accounts (if you can afford the fees, you can save). Along with the Consumers Union, the Consumer Federation of America, the Center for Responsible Lending and others, we have long called for comprehensive reform of the payments system. It should be high on the agenda of the new Congress. Here are some resources.

That ought to be enough to get Congressional oversight committees off to a start on reform.

The NYT Magazine also has a much longer feature Check Cashers, Redeemed by Douglas McGray of the New America Foundation that points out some of the problems with the unregulated new businesses but also points out that the banks are partly to blame:

“If they’re properly regulated and scrutinized, there’s nothing wrong with check cashing as a concept and there’s nothing wrong with payday loans as a concept,” Robert L. Gnaizda, general counsel for the Greenlining Institute, a California nonprofit focused on financial services and civil rights, told me. “And there’s nothing automatically good about free checking accounts if you have multiple fees whenever you make the most minor mistake.”

Dana Hedgpeth explains in today's Washington Post story Wall Street Decamps to K Street for Work on Bailout that Wall Street's (and DC's K St) firms -- many of whom probably advised on now-collapsed deals -- are now re-making themselves as a solution to the financial meltdown:

The financial crisis team at one District law firm -- Akin Gump Strauss Hauer & Feld -- sends out almost daily e-mails and holds conference calls and helps with online seminars offering advice to troubled companies that have come under congressional investigation, including Countrywide, Moody's and American International Group. A recent online discussion was titled: "Who's Going to Court, Who's Going to Jail?: Civil and Criminal Law Enforcement in the Wake of Financial Crisis."

"It is, in their view, more of a deal than an intrusion and Nason bristles at the idea that the program "nationalizes" the participating banks."

In today's New York Times, metro columnist Jim Dwyer questions the wisdom of the over $1 billion dollars of taxpayer funds and subsidies that New York City has dumped into the new Yankee and Met stadiums. From his column For Sports Teams, Mayors Play Ball at the City’s Expense:

But these are appetizers before the true banquet: The subsidies for the construction of new stadiums and garages that come in hard cash, in the loss of public parkland and in forgone taxes. Earlier this week, The New York Times reported that the state and the city would cover at least $659 million in costs related to new stadiums for the Yankees and the Mets. The teams will receive an additional $480 million in tax breaks of one kind or another.

The premise of these sports stadium investments, public officials say, is that economic development benefits will roll into the city over the decades — $40 million over 40 years in the Bronx, for instance. Perhaps this will happen. Or maybe it is a hallucination that is even flimsier than the assumptions that drove Wall Street to sink trillions into financial instruments that no one actually understood but all the right people agreed were worth tons of money.

Our allies at Public Citizen Global Trade Watch have a new report on the impact of the election results on trade: Fair Trade Gets an Upgrade. That site also includes other materials including a video archive of trade-related political ads. From PC GTW:

From the presidency to both chambers of Congress and from the traditionally "free trade" Florida to Colorado and New York to New Mexico, successful candidates in 2008 election races ran on a platform of fundamental overhaul of U.S. trade and globalization policies including a growing number of Republicans, with a net increase in Congress of at least 30 fair trade supporters...

The Arkansas Supreme Court has ruled that the state's Check Casher's law -- which has enabled quadruple-digit APR payday lending -- violates the State Constitution's 17% usury ceiling. Article in Arkansas Business. Link to the decision. In a separate decision, the court also today rejected the lenders' plea that a payday lending class action case be shipped off to lender-friendly arbitration.

Also on Tuesday, Californians approved by 52-48 the CALPIRG-backed Proposition 1A to promote the development of high speed rail. Most other large spending proposals were sent to defeat by voters (AP via San Diego Tribune). From statement of CALPIRG consumer advocate Emily Rusch:

We saw gas prices hover well above $4 a gallon in California all summer. California has three of the top five most congested regions in the country, costing commuters billions in time and money. Continued oil dependence puts our environment, our economy, and national security at risk.

High-speed rail will allow Californians to travel from the Bay Area to Los Angeles in two and a half hours, without the hassle of the airport. High speed rail is predicted to take up to 92 million drivers off the road annually and attract 18 million travelers who would otherwise fly. In doing so, high speed rail would eliminate the need for construction of 2,970 additional highway miles and 91 airport gates.

UPDATE: Our 31 Oct 2008 coalition letter to FCC. We sent a similar to Congress.

If you think of the television spectrum, and you probably don't much, you've probably wondered: what's in between the assigned TV channels? The short answer is white space. Think of it as median strips between highway lanes. While some of that space is needed to avoid interference, some of it can be allocated to other beneficial uses. On Tuesday, the FCC approved a proposal backed by U.S. PIRG and a variety of public interest groups, and by Microsoft and Google. The decision will help bring broadband Internet access to more communities and, because the FCC order allows unlicensed uses, it will spur yet another round of technological innovation on the Internet. From a statement by our coalition partners at Free Press:

Nearly every market in the United States has available white spaces; in some communities, more than three-quarters of the broadcast spectrum is unused. Today's FCC vote allows innovators to develop new technologies that will bring Internet service to millions of Americans in under-served communities.

Today’s decision is consequential to our nation’s future because wireless broadband has the potential to improve our economy and quality of life in even the remotest areas. One of the best options for promoting broadband and competition across the country, particularly in rural areas, is maximizing the potential of spectrum-based services. Because we are a nation of innovators and entrepreneurs, the Commission’s decision to open fallow spectrum to new uses will give our country an opportunity to reclaim its place as a world leader in broadband deployment.

Google has announced on its blog that it will no longer pursue a controversial and PIRG-opposed web advertising partnership with Yahoo. From Google:

However, after four months of review, including discussions of various possible changes to the agreement, it's clear that government regulators and some advertisers continue to have concerns about the agreement. Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn't have been in the long-term interests of Google or our users, so we have decided to end the agreement.

Kudos to the faith, consumer, civil rights, credit union and other organizations that joined together to win important predatory lending victories in Ohio and Arizona Tuesday. In both states, voters resoundingly rejected multi-million dollar astro-turf campaigns by out-of-state payday lenders to overturn state laws strictly regulating their previously mostly-unregulated triple-digit APR predatory payday loans. Don't let the door hit you on your way out, guys.

In Arizona, voters defeated Prop. 200 on a 60-40 vote (Arizona Star story and editorial). Defeat of Prop. 200 means an existing permissive law will likely sunset (or expire) as planned in July 2010 as we think the lenders have now exhausted both the legislature's and the public's patience in that state. Website of the Arizona PIRG-backed No On 200 coalition with their cute loan shark video take-off of the old SNL classic "land shark" pieces.

In Ohio, voters approved Issue 5 on a 64-36 vote, implementing new bi-partisan legislation strictly regulating payday loans (Cleveland Plain Dealer editorial). The Ohio PIRG-backed Yes On Issue 5 has some nice videos also.

Boring ballot question policy sidebar: Of course, except for certain spending laws in some states, legislative laws do not usually need to be approved by voters to take effect. In Ohio, the lenders were allowed to put the question on the ballot asking for a "No vote" against the new law. They cleverly reversed the typical wording "Yes, pass our proposal," to "No, defeat their proposal" in an unsuccessful effort to confuse voters. In ballot questions, when a voter doesn't care, or isn't sure, he or she is more likely to vote No, all other things being equal. Well, the lenders wrote their ballot question backwards, but the voters voted straighforwardly against predatory triple-digit loan sharking. Our previous blog.

In today's New York Times Magazine, Gardiner Harris explains in a detailed story that the once gold-standard U.S. FDA has a growing "Safety Gap". He argues that the FDA is under-funded, that it hasn't kept up with the globalization of commerce, and that it cannot protect us from dangerous products, especially those from China:

But are the Chinese factories safe? Who knows? [...] China has in recent years exported poisonous toothpaste, deadly dog food, toys made with lead paint and tainted fish. In one infamous example this spring, Chinese manufacturers substituted a cheap fake for the dried pig intestines used to make the drug heparin, which is given to dialysis and surgery patients to prevent blood clotting. [...] The F.D.A. regulates more than $1 trillion worth of consumer goods, which amounts to about 25 cents of every consumer dollar spent in this country. This includes $466 billion in food sales, $275 billion in drugs, $60 billion in cosmetics and $18 billion in vitamin supplements.[...] Even the F.D.A.’s staunchest defenders now acknowledge that something is terribly wrong.