Study: Taxpayer TARP money subsidizes biggest banks
A report released today by economist Dean Baker and the non-partisan Center for Economic and Policy Research finds that
"the government has essentially formalized the idea that major banks are “too big to fail” (TBTF)....In other words, the TBTF banks can borrow money at much lower rates than small banks whose cost of funds is determined based on their credit worthiness...."
“TBTF could amount to a substantial subsidy which should be a serious concern to policy makers,” Baker continued. “It implies nothing short of a redistribution of money from taxpayers to the very banks that were bailed out last year.”
The Energy and Commerce Committee will consider a data security bill, HR 2221, this morning. We joined other groups in a letter urging that its provisions preempting state laws be eliminated. Otherwise, it is a decent bill, but preemption is never a good idea.
Important Consumer agency hearing will likely focus on state laws
Chairman Barney Frank (D-MA) and his Financial Services committee hold their latest hearing (all witness testimony and live video link) on the Consumer Financial Protection Agency this morning. One of the key issues will be whether business-oriented conservative Democrats on the committee succeed in eviscerating the bill by winning an amendment to remove its provision restoring federal law as a floor not a ceiling, which would eliminate the last 10 years of aggressive preemption rulings by federal bank regulators and once again allow states to respond to problems quickly. As I told the Associated Press (via Albany Times-Union) yesterday: "That's the system we have now. That's the system that failed." As New York Bank Superintendent Richard Neiman (also a member of the Elizabeth Warren-led Congressional Oversight Panel on the TARP) said in a letter in today's Wall Street Journal:
national banks fueled the broader credit crisis through their origination, wholesale funding, investment, and securitization activities. But perhaps their most insidious contribution to the housing crisis involved dubious credit-card practices that drove many struggling consumers into unsustainable subprime mortgages for debt consolidation.
Neiman also pointed out that allowing the states to pass stronger laws doesn't mean they will, unless national standards turned out to be inadequate. We agree. And we like what White House press secretary Bob Gibbs said yesterday -- that Obama would consider a veto of the consumer agency bill if it isn't strong enough. Several of the witnesses today are members of the PIRG-backed Americans for Financial Reform.
About two-thirds of Americans object to online tracking by advertisers — and that number rises once they learn the different ways marketers are following their online movements, according to a new survey from professors at the University of Pennsylvania and the University of California, Berkeley.
You can see the news release, which links to the report, here. The study is also at SSRN. The study is by Professor Joe Turow at UPenn's Annenberg School of Communications, along with colleagues Chris Hoofnagle and Jennifer King at UC Berkeley School of Law (Boalt Hall) Technology Law Clinic. It is a very important report, because Congress and the FTC are considering various responses to the growing tracking, targeting and behavioral modification of consumers prevalent on the web. This summer, U.S. PIRG joined other groups in demanding significant baseline privacy protections on the web when we released a comprehensive Internet privacy reform platform. Also, you can watch a presentation by Professor Turow describing his recent book Niche Envy: Marketing Discrimination in the Digital Age, but apparently, only in IE Explorer?
Seventy-four law professors from across the country have sent Congressional leaders a joint letter urging enactment of a strong Consumer Financial Protection Agency that does not limit the efforts of state legislators and state attorneys general to protect their citizens. The effort was coordinated by Norm Silber of Hofstra and Jeff Sovern of St. Johns (Jeff's blog entry at Consumer Law and Policy blog.) The professors' news release. Here is their explanation of why the wrongheaded preemptive efforts of the current regulators should be reversed, as the Obama-backed proposal would accomplish:
In our view, whatever merit arguments in favor of preemption have are outweighed by the value of having states operate as laboratories, trying different approaches to lending problems, particularly in dealing with the relatively young problems of predatory lending. It is important that Congress not take a simplistic approach favoring only federal development of consumer protection laws in financial products and services; and that Congress not limit the role of the states to enforcement of state and federal law. State legislatures and courts need to be able to continue to develop consumer protection law. Many of the types of non-bank financial products that will be within the jurisdiction of the CFPA have been regulated up until now only by the states, and their good work should not be undermined. In addition, problems are much more likely to grow larger if they can be addressed only at the federal level and not also by states where they first appear.
Jon Bartholomew, consumer advocate at Oregon State PIRG (OSPIRG), has an op-ed Support broadband access here, across U.S. in the Statesman-Journal. In his op-ed, he promotes the goals of the PIRG-backed Media and Democracy's campaign's Public Interest Internet Agenda. Last week, U.S. PIRG advocate Amina Fazlullah was a featured panelist for the coalition at DC's One Web Day event in the U.S. House of Representatives. From Jon's op-ed:
Connecting our entire nation to the Internet at broadband speed is the key to economic development, improved health care and education, energy efficiency and a robust democracy and open government. A Public Interest Internet Agenda contains 34 specific policy recommendations that represent the common ground that exists among these varied constituencies, and this common ground is what the government must build upon to formulate a strategy to deliver universal access to broadband.
In case you missed the hullabaloo this week, today's Washington Post story Firm Aggressively Campaigned for Device reprises the sordid ReGen story-- here's a summary for those who missed it: two former high FDA and hill staffers go to work for medical device firm, facilitate massive campaign contributions to former Senate boss Bob Menendez (D-NJ) and three of his NJ delegation colleagues, use influence and access lubricated by said donations to meet with former FDA chief Andy Eschenbach, who rolls over and approves apparently worthless and possibly side-effect-riddled knee repair device previously rejected three times by his expert scientists. Post story says FDA report finds "ReGen executives had unusual access to von Eschenbach and that approval came after he met several times with members of the New Jersey congressional delegation."
Well, I don't actually know how unusual it is. You could probably change the names and agencies and decisions and find similar stories every day in Washington. Campaign money is corrosive and the revolving door hits taxpayers and consumers more than it hits the suits marching through it on their way between lucrative lobbying and government posts. I actually find the most interesting part of the story to be this coda:
Von Eschenbach, who now helps companies navigate FDA regulation at a consulting firm created last year by his former FDA chief of staff, was traveling Friday and unable to respond to questions, his assistant said.
I wonder if his firm makes campaign contributions or has unusual access?
I posted that last blog before it was done because I wanted to get the Consumer Financial Protection Agency link out there. I've skimmed the bill and no big surprises. It proposes a strongly independent consumer agency with broad authority to enforce federal consumer law, as a floor not a ceiling. The two other items I'd wanted to mention concern the important idea of a floor of protection:
On the important issue of why restoring state authority to enact and enforce stronger consumer laws is a critical reform in the CFPA and any federal proposal, our colleague Lauren Saunders of National Consumer Law Center has a new report Restoring the Role of States in Protecting Consumers is Vital to Financial Regulatory Reform. It refutes the widely-circulated misinformation from various industry apologists and coin-operated think tanks that Abe Lincoln took time out from prosecuting the Civil War to preempt pesky state attorneys general enforcing laws against unfair bank practices. Preemption is a much newer phenomenon, mostly occurring under Clinton's OCC chief Jerry Hawke and his successor, Bush's OCC chief John Dugan, in just the last fifteen years. Funny, those last fifteen years are the heyday of financial bubbles, regulatory ineptitude and capture, predatory lending and world economic collapse. The 1864 National Bank Act? That was actually passed to create a mechanism to raise money to buy bullets and guns and other war materials. Our OCCWatch campaign archival site.
Finally, U.S. PIRG recently joined Americans for Financial Reform, Public Citizen and other leading groups in a letter to President Obama urging him to tell the G-20 meeting to “advocate a global regulatory floor, and oppose any efforts to impose a ceiling” on re-regulation in the upcoming G-20 Summit. Our joint release; our joint letter.
Bank reform weekly blotter-CFPA discussion draft out
If you work on financial reform, you had a busy week-- keeping up was like drinking from a fire hose.
First, we've been responding to media reports -- some have vastly over-stated and in some cases gotten wrong what House Financial Services Chairman Barney Frank (D-MA) said in a memo to committee members on the Consumer Financial Protection Agency. While we still face a fierce fight to win passage of this important reform, especially to preserve its reversal of the last 10-15 years of misguided preemption efforts by bank-friendly federal regulators, sometimes a memo is just a memo. Today, Chairman Frank released an actual discussion draft in legislative language. More on that later. Coalition statement on the memo.
Angry at the credit card companies for using the long implementation period before the new Credit Card Act takes full effect to gouge and punish their customers, Chairman Frank and JEC Chairwoman Carolyn Maloney (D-NY) yesterday introduced PIRG-backed legislation to fire up the law's remaining new protections this December 1st instead of waiting until next February (most of it) and next August (part of it). My release on behalf of both U.S. PIRG and Americans for Financial Reform.
More stuff after the jump.
As I've previously noted, this week Chase and BofA decided to dial down the intensity of their overdraft fee assault on their customers, in an effort to stave off important proposed legislation, now that Senate Banking Chairman Chris Dodd (D-CT) has joined Maloney as a champion. As Jeff Gelles of the Philly Inquirer notes, the failed bank Wachovia, now part of Wells Fargo, has piled on with some modest limits on the pillaging.
UPDATE Wednesday: The big banks Chase and Bank of America have responded to Dodd by announcing changes to their overdraft policies (Washington Post and New York Times). Obviously, the banks are hoping to block a law. Laws protect consumers better than press releases do, so we urge Senator Dodd to keep pushing for a law. A few quick notes--
A press release can be reversed, so we need a law to guarantee rights. Plus, there are over 6,000 other banks and credit unions-- most are also imposing unfair overdraft fees.
BofA says opt-in to overdraft "protection" for new customers only, just an opt-out for old-- that is unacceptable-- we need opt-in for all.
BofA says limit to 4 overdrafts/day-- that's not even close to what is needed as it is still imposing up to $140 fees/day (at $35/pop).
Chase says it will not re-order checks and debits to increase fee income, but will post them chronologically; that excellent step should have been matched by BofA but wasn't.
Original: Late last week, Senate Banking Chairman Chris Dodd (D-CT) announced that he planned to tackle unfair bank overdraft fees. It's a welcome move. We outlined the problem in testimony earlier this year in the House, where Rep. Carolyn Maloney (D-NY) has labored single-handedly on the issue, which pits big banks, small banks, and some credit unions against reform. Together, analysts predict that the industry will earn some $38 billion on the fees this year, which have grown dramatically on debit overdraft income, not bounced check income. The banks are truly addicted to fees.
Often, the bank knowingly allows small debit transactions that cause overdrafts.
Often, the bank changes the order of cleared checks and debits to maximize the number that cause overdrafts.
Sometimes, the bank imposes overdrafts on deposited, but "unavailable" funds, even for longterm customers.
As the Washington Post noted, House Chairman Barney Frank's (D-MA) view (shared by consumer advocates, including U.S. PIRG) is that establishing a Consumer Financial Protection Agency should be our first priority, beacuase it could regulate overdrafts (and other unfair practices) better than Congress could, but...
Frank said new [overdraft] rules clearly were necessary, but if Congress voted to create a new consumer protection agency, it could write the rules. If the banking industry succeeds in its opposition to the new agency, he said, he would favor a strong overdraft bill.
"Banks should understand that they can't have it both ways," Frank said. "If that should falter, then we will pass a tough overdraft bill."
Proponents of airline passenger rights reforms including U.S. Senator Barbara Boxer (D-CA) are expected to testify at a hearing today organized not by a committee, but by Flyersrights.org and the Business Travel Coalition. The groups are urging Congress to add guarantees that passengers will be treated like humans, not cattle, to an expected extension of the FAA Act that must pass by the end of this month (our most recent letter of support). Last night, Canadian musician Dave Carroll and his band Sons of Maxwell joined the advocacy groups and played their Internet hit "United Breaks Guitars," (video and sequel available at link) based on an apparent sordid episode of baggage-handler rage against the music. The event is open to the public from 9-12 today in Rayburn House Office Building Room 2200.
FCC proposes to protect Internet; Texas Senator says no.
Today new FCC chair Julius Genachowski made an important speech at Brookings in support of preserving Internet freedom or net neutrality. This FCC release describes the proposal. (Reuters via NY Times). The telco monopolists who didn't build the Internet but want to dominate it are already whining. Already, Senator Kay Bailey Hutchison (R-TX) has proposed an amendment to kill the idea. U.S. PIRG's Internet Freedom (net neutrality) pages.
The U.S. House has voted overwhelmingly (253-171, yea is the pro-student, public interest vote) to expand the federal direct student loan program (NY Times) and to eliminate reliance on heavily subsidized high-cost private student loans. Passage of this legislation, which is expected in the Senate, has been a longtime high priority for U.S. PIRG. Our release on passage. Our main student issues webpage.
New Golden Throne award to bank lobbyist: The Center for Media and Democracy (PRWatch) has awarded its first Golden Throne Award to Ed Yingling, chief American Bankers Association lobbyist. "The award invokes fond memories of the $1.2 million bathroom renovation ordered by Merrill's CEO, John Thain, shortly before the firm lost $27 billion and collapsed into the arms of Bank of America (BofA)." CMD says:
"From his days as a cub lobbyist fighting to rid the nation of caps on interest rates, Glass-Steagall and other proven consumer protections to his recent yeoman's effort to keep bank fees unregulated and kill off the Consumer Financial Protection Agency, Edward Yingling has consistently been a true advocate for the American Bankster."
Let's not give corporations even more Constitutional rights-- they are not people
Over more than a century of jurisprudence, the courts have unwisely granted more and more Constitutional rights to corporations (background). Usually these expanded rights come at the expense of the rights of natural people. And most of the time, corporations take on the rights, but reject any responsibilities. U.S. PIRG serves as a friend of the court (our amicus brief) in Citizens United vs. FEC, the case re-heard (transcript) in an extraordinary September oral argument last week by the Supreme Court and which, in the worst of all worlds, would lead to allowing unlimited direct corporate expenditures in campaigns. You've seen professional soccer players and NASCAR drivers covered in corporate logos -- do you want your Senators dressed that way, also? Do you want corporations dumping millions of dollars of profits -- maybe from failing to clean up pollution or predatory lending -- directly into elections and further diluting the impact of your own and your neighbor's smaller contributions? Find out more about our democracy campaigns and take action by writing a letter-to-the-editor.
"Bank customer service" should become the new Webster's definition of oxymoron. The business model has morphed from "what can we do to help you?" to "How can we hurt you today?" Well, Ann Minch got tired of Bank of America's responses to her legitimate complaints about having her credit card rate jacked, so she's gone Hollywood. She stars in a new self-produced Youtube video that's generating a lot of buzz on the net -- 96,000 views as of Monday, says Arthur Delaney over at Huffington Post. The effort should help point out the need for a Consumer Financial Protection Agency. A CFPA would boldly go where no bank regulator has gone before -- to the aid of the consumer. That's why all the banks, and even the shrill U.S. Chamber, are mounting deceptive, misleading lobby campaigns to kill the proposal. Chairman Barney Frank (D-MA) of the House Financial Services Committee has announced additional hearings and a markup schedule for the CFPA and other reform bills. My previous CFPA blog.
I am joining several experts on a panel at a free public event (RSVP requested) Friday morning at the New America Foundation. It's called Shining a Light on “Shadow” Banking:
As Congress reconvenes and the effort to overhaul the financial regulatory system resumes, how do the financial services needs of underbanked consumers fit into the broader policy discussion?
Treasury's Peggy Twohig is the keynote. In this case, shadow refers to what is also called the "fringe banking" or "alternative financial system." (Sometimes "shadow" can refer to unregulated sectors such as derivatives or hedge funds.)
The FTC has announced a series of privacy workshops "to explore the privacy challenges posed by the vast array of 21st century technology and business practices that collect and use consumer data." The first is 7 December.
Finally, the FTC recently finalized its action against auto warranty scam robocallers Transcontinental. I hope these are the guys who've been calling my cell, and if they do it again in violation of this order, maybe they'll end up in a cell.
U.S. PIRG statement on first anniversary of financial meltdown
FOR IMMEDIATE RELEASE
U.S. PIRG: Congress Saved Wall Street, Time to Save the Rest of Us
Statement of U.S. PIRG Consumer Program Director Ed Mierzwinski on Anniversary of Financial Meltdown
“One year ago this week, after Lehman Brothers failed, the Bush administration and Congress began massive taxpayer-backed efforts to save Wall Street. Hundreds of billions of dollars later, taxpayers have saved Wall Street but Congress hasn’t changed Wall Street’s regulation or culture to prevent future meltdowns.
“Put simply, that means Congress hasn’t saved the rest of us.
“While Wall Street bankers still pay themselves massive bonuses even when they fail, and while consumers still face unfair financial practices, Congress has dithered under a withering lobbying campaign from the big banks who claim that it wasn’t their fault and that reform isn’t necessary. It’s time for Congress to reject business as usual and enact real financial reform, starting with passage of the Consumer Financial Protection Agency.”
- # # # # -
Judge rejects Merrill/BofA settlement as "contrivance"
U.S. District Judge Jed Rakoff today rejected Bank of America's $33 million settlement with the SEC over $3.6 billion in Merrill Lynch bonuses that were not disclosed to investors before the firms merged last December. According to the New York Times and Courthouse News Service and other sources, Rakoff said that BofA "materially lied" and that the settlement was "pointless," a "contrivance" and “does not comport with the most elementary notions of justice and morality.”"
Tuesday is "anniversary" of meltdown--Lehman collapse day
Update: This should be posted at Financialstability.gov soon, but the Wall Street Journal has a link to the latest regulatory reform report. Also, the NY Times has a great editorial urging financial reform now.
Original post: Tuesday marks the day last year that Lehman Brothers failed and was not bailed out. Following its failure, Treasury Secretary Paulson, Fed chairman Bernanke and Tim Geithner, then New York Fed head, huddled with the remaining Wall Street titans over long September weekends to bail out the rest of Wall Street. What about the rest of us?
Well, since then, while the massive taxpayer and Fed infusions of cash have apparently staunched the economy's bleeding although not re-started it, not much has changed to prevent another financial crisis. Wall Street bankers living under the taxpayer TARP continue to pay themselves massive bonuses while Congress dithers under a withering assault from the bank lobby that claims it wasn't their fault -- it was some other guys who did it.
On Monday, President Obama speaks on the urgent need for financial reform at historic Federal Hall, which happens to be on Wall Street. We'll see if Congress listens. We're expecting critical votes on the Consumer Financial Protection Agency and other reforms soon. Opposing the CFPA has the shrill attention of the entire business community, simply because it will work to reduce risk and to hold them accountable. The system we've had in place did not work. It needs to change.
"Here’s a novel thought. Instead of creating more regulations to try to prevent this kind of mess from recurring, why not figure out how to hold regulators accountable when they perform as poorly as they did in recent years?"
Unlike the current regulatory system, which has failed because it was too close to the banks themselves, the CFPA will be accountable both to the Congress and the taxpayer. It is time for Congress to stop playing games with taxpayer and consumer wallets and enact real reforms. We look forward to the President's speech.
Law professor John Pottow, a Credit Slips blogger, has a nice Detroit Free Press op-ed explaining that the proposed Consumer Financial Protection Agency (CFPA) will help small banks. He issues a sharp criticism of the big-bank friendly American Bankers Association for its claims that the agency will hurt small banks:
Simple economics suggests the CFPA would actually help small banks, for at least two reasons. First, regulatory compliance costs are largely fixed. Big issuers do indeed have an advantage with fixed costs, as they can spread the costs over more borrowers. But the plain vanilla rule would lower fixed regulatory costs by providing one-time, simple-template approval for products underwritten by the CFPA. Smaller issuers should rejoice in this reduction of fixed costs as it chips away at the current advantages the regulatory structure accords large lenders. Second, and more important, plain vanilla products will achieve a transparency long overdue in the financial products market.
Well, another national bank has collapsed. Corus Bank will cost the taxpayer-backed FDIC insurance fund $1.7 billion or so. The OCC -- the obscure but powerful supposed regulator of national banks -- which has routinely claimed that national banks have done no wrong and done no harm to the economy (it was some other guys), says this about Corus:
The OCC acted after finding that the bank had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices. The OCC also found that the bank incurred losses that depleted its capital, the bank is critically undercapitalized, and there is no reasonable prospect that the bank will become adequately capitalized without Federal assistance.
According to press reports (NY Times), this bank bet the farm on condos in Florida and lost. How did the OCC let a bank bet all its eggs in the Florida condo basket? Wasn't there any swampland available? Yet another embarrassment for the OCC. And yet another reason we need real financial reform, now.
Latest military contractor scandal is all over the news
Recently, the non-profit Project on Government Oversight (pogo.org) broke the story of the latest military contractor scandal-- the ArmorGroup (a Wackenhut subsidiary) scandal in Kabul involving grotesque hazing rituals for new embassy guards (warning -- the naked pool party photos available at POGO are graphic and X-rated). But as a recent POGO statement points out, the real issue is the weak response that the State Department has made to the recurring and continuing violations of the contract. The New York Times has a followup-- Company Kept Kabul Security Contract Despite Record:
In fact, the deficiencies became so severe that they threatened the security of the compound, the documents show, and State Department officials withheld payments to ArmorGroup as a way to compel it to comply with the terms of its agreement. On a few occasions, government officials warned the company that if it did not correct the most egregious problems it would lose the five-year, $189 million deal.
But the contract was renewed anyway.
In May, the President signed PIRG-backed legislation on weapons acquisition reforms. In 2008, additional PIRG-backed legislation was enacted to prevent military contractors from using offshore tax dodges to avoid paying Medicare and Social Security to their employees. Obviously, more needs to be done to hold these firms accountable to taxpayers.
U.S. Chamber has anti-consumer protection agency website
As I noted a few days ago, the U.S. Chamber has launched a multi-million dollar campaign against the proposed Consumer Financial Protection Agency. I took a quick look at its stuff. The website is Stop the CFPA. Its print ad claims that your local butcher will be the the primary regulatory target of the "government bureaucracy with sweeping authority."
Who knew? Your local butcher's activities are such a threat to an economy in ruins due to corporate malfeasance and regulator incompetence that President Obama has launched a campaign to wrap him in red tape?
This is simply a case of the U.S. Chamber raising money by running a classic misdirection con -- hoping people will worry about their butcher and forget about AIG, Wall Street titans and their million dollar payoffs for failing and then hiding under the taxpayer TARP, Angelo Mozilo and Countrywide, Bernie Madoff, greedy credit card companies pillaging the pockets of good customers, and the rest of the rubble of our economy.
Nice try, guys, but a non-starter. Gotta love their fact sheet lede, though: "The U.S. Chamber Supports Stronger Consumer Protection. The Consumer Financial Protection Agency (CFPA), however, is bad for consumers and bad for the economy."
We've joined other leading groups in a news release on Senator Chris Dodd's (D-CT) announcement today that he will remain as chairman of Senate Banking. Excerpt:
"The continuity of his leadership and his commitment to protecting consumers will be critical to expediting passage of strong reforms this year."
Full release after the jump.
Center for Responsible Lending
Consumer Action
Consumer Federation of America
Consumers Union
National Association of Consumer Advocates
National Consumer Law Center (on behalf of its low-income clients)
U.S. PIRG
For Immediate Release, Wednesday, 9 September 2009
Joint statement of consumer groups on
announcement by Chairman Dodd
“Consumer groups look forward to working with Chairman Chris Dodd and the entire Senate Banking Committee on enacting comprehensive financial reform that includes a strong Consumer Financial Protection Agency. Chairman Dodd’s leadership was critical in the passage of landmark credit card reforms earlier this year. The continuity of his leadership and his commitment to protecting consumers will be critical to expediting passage of strong reforms this year.”
We've joined Consumers Union and the National Consumer Law Center in a letter urging Chase to reconsider its punitive practice of more than doubling credit card minimum payments of some customers who borrowed money in good faith on their credit cards, and now have had the rules changed in the middle of the game. Consumers Union attorney Lauren Bowne's blog entry is here.
NYTimes: Front page story on debit card overdrafts
Reflecting continuing public interest in the growing bank dependency on overdraft charges, especially from debit transactions at point-of-sale, the New York Times has a front page story today by Andrew Martin and Ron Lieber-- Overspending on Debit Cards Is a Boon for Banks.
"Although regulators have warned of abuses since at least 2001, they have done little to curb the explosive growth of overdraft fees. But as a consumer outcry grows, the practice is under attack, and regulators plan to introduce new protections before year’s end. The proposals do not seek to ban overdraft fees altogether. Rather, regulators and lawmakers say they hope to curb abuses and make the fees more fair."
This previous blog links to my recent testimony in support of strong reform legislation proposed by U.S. Rep. Carolyn Maloney (D-NY). The regulator proposals are not up to the task, as you might expect.
Our allies at the Consumer Federation of America have released a survey (PDF) finding that the public strongly supports the proposed Consumer Financial Protection Agency. More after the jump:
A year after the Lehman Brothers bankruptcy froze credit markets and sent the stock market into a nosedive, consumers overwhelmingly want government action to increase consumer protections for financial products and services, according to a new national poll released today by the Consumer Federation of America (CFA). In a country where skepticism about the role of government is high, more than half of those polled (57 percent) support the creation of a new federal agency to protect consumers who purchase banking and other financial products and services. Those most adversely affected by many unfair and deceptive financial practices -- young adults under 35 years (70 percent), African-Americans (79 percent), Hispanic-Americans (70 percent), and low-income persons (69 percent) -- expressed the strongest support for a new consumer protection agency.
Along with other groups, we joined the Electronic Privacy Information Center (EPIC) today as it released a Privacy Report Card for the Obama administration. Our own statement gave the administration an A for its introduction of proposed Consumer Financial Protection Agency legislation that returns federal law to a floor not a ceiling. Excerpt from my statement:
“In the long run, one of the most important privacy actions taken by the Obama administration may be one that hardly mentions privacy, if at all. The Obama proposal to establish a Consumer Financial Protection Agency takes the giant step of proposing that federal consumer banking law return to its roots as a floor or a minimum standard of protection, not a ceiling, reinstating the long-eviscerated rights of the states to enact stronger consumer banking and credit laws. If we can defend this proposal against the phalanx of corporate lobbyists against it, it is a game-changer."
Today, Public Citizen formally announced that Robert Weissman is its new president. You can watch the video or read more at Citizen.org. Rob is a longtime public interest colleague who has been head of several Essential Action projects and is perhaps most well-known as editor of the Multinational Monitor. He replaces longtime president Joan Claybrook, who is retiring.
U.S. Chamber cares about your local butcher, right
The U.S. Chamber of Commerce has decided to claim your "local butcher" will be put out of business by the presumably ham-handed, mad-cow led proposed Consumer Financial Protection Agency. According to today's Wall Street Journal story by Brody Mullins, the Chamber has launched a two million dollar ad campaign against the agency. The Journal notes that "there won't be any mention of banks or Wall Street or insurance companies," just of your local butcher, whose apparent informal credit arrangements with customers will be the primary enforcement target of the latest mis-guided Washington bureaucracy.
Wait, aren't banks, Wall Street and insurance companies the guys whose greed butchered the economy? Sounds like the Chamber's putting together a hatchet job. You don't have to make this stuff up, it writes itself. Only in Washington.
"It has now become clear that abrogating sound state laws, particularly regarding consumer protection, created an opportunity for regulatory arbitrage that frankly resulted in a 'race-to-the-bottom' mentality," Bair wrote in the September issue of Financial Stability Review, a French central bank publication.
"The on-campus credit card gantlet, characterized by free pizzas and T-shirts for every completed application, is enjoying its last hurrah before a new federal law kicks in next year."
In February, PIRG-backed youth marketing requirements of the Credit CARD Act take effect, requiring that card companies verify that 18-21 year olds have either an ability to pay or a co-signer, limiting them from handing out so-called free gifts in on-campus card marketing and requiring disclosure of the details of contracts to market cards to students. More at our truthaboutcredit.org site.
Sorry for the blank space for a few days: I've been in the northeastern U.S. but in a large forested area apparently abandoned by my very large wireless telecom provider formerly known as Ma Bell.
Last week, U.S. PIRG Media and Telecommunications Reform Attorney Amina Fazlullah joined nine other advocates in a news event demanding baseline privacy protections against widespread behavioral tracking and targeting on the Internet. Our joint release including links to materials. USA Today blog.
On Wednesday, I will join many of the same groups in a news event (advisory) to discuss Congressional and administration efforts to either enhance or diminish both on- and offline privacy. I fully expect that in every battle over privacy we will face an ugly fight over whether or not the states -- the absolute longtime privacy superstars -- can continue to lead the way, or whether the demands of corporate interests for weak, preemptive federal laws will prevail.
You know where we stand. So long as federal laws are strong enough, there is no need for the states to act, and they will not. That's not rational. But if federal laws fail to do the job, we need the states as first responders-- their rights to act should never be taken off the board. That's not rational. But it serves corporate privacy invaders well.
Proponents of airline passenger rights reforms including U.S. Senator 
Over more than a century of jurisprudence, the courts have unwisely granted more and more Constitutional rights to 
As I 
The U.S. Chamber of Commerce has decided to claim your "local butcher" will be put out of business by the presumably ham-handed, mad-cow led proposed Consumer Financial Protection Agency. According to today's