Archive for the ‘Congress’ Category

During last week’s Republican debate on FOX Business, an ad paid for by the American Action Network (AAN) depicted Consumer Financial Protection Bureau (CFPB) workers robotically denying personal loans to needy individuals.

AAN paid $500,000 to run the ad seven times during the debate, attacking the agency and its champions – Senator Elizabeth Warren and CFPB Director Richard Cordray.

The ad’s dismal, Soviet-inspired concept sets the scene for misleading accusations of injustice against consumers. Warren and Cordray are portrayed on red banners as dictators while the assembly line rubber-stamps personal loan denials – a far cry from the work the CFPB actually does, such as providing ways for ripped-off consumers to hold banks accountable and reining in “payday” lenders that prey on military families.

However, beyond its sham portrayal of the bureau’s work, the ad is a symptom of a bigger problem: A concerted push to stop or delay the successful work of the agency that has returned over $11 billion dollars to harmed consumers. The real worry about the ad should be with the huge sums of money being funneled into the larger effort to thwart the agency.

A timely example of these efforts to block the CFPB’s work are right-wing lawmakers’ concurrent attempts to insert riders—or unrelated policy proposals—into the federal spending bills in order to weaken consumer financial protections issued by the CFPB, as well as undermine the structure and set-up of the Bureau.

By attacking the agency created to look out for consumer interests in the financial market, these corporate players are in-effect attacking consumers themselves.

So why is the CFPB under attack?

Follow the money. Two American Action Network board members lobby on behalf of Navient, a student loan provider currently under investigation by the CFPB (and several other regulatory authorities) for allegedly overcharging and mistreating borrowers. And another board member lobbies on behalf of both student loan and payday lending clients, practices also under examination by the CFPB. This lobbying seems to be paying off.

Policy riders that would cripple the CFPB’s ability to do its job are leaching through the appropriations process, piggybacking on budget bills. Here’s what the anti-CFPB and anti-financial reform riders would do:

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Securities and Exchange Commission Chair Mary Jo White will face questions from the House financial services committee on Wednesday, November 18, 2015. An Obama appointee, she’s nevertheless drawn sharp criticism from Democrats as well as Republicans. Public Citizen also challenges her stewardship. Here are questions we hope committee members will ask. We also take the liberty of proposing an ideal answer, and then the answer that we expect.

Banker pay: Dangerous pay structures helped cause the Wall Street bubble that burst in 2008. Congress approved a law requiring you to reform those structures and set a deadline: May 2011. When will you propose a good rule?

Ideal answer: There’s no excuse for taking more than five years on this. We’ve completed more complicated rules (including multi-agency rules) in less time. I’ve directed my staff to bring a proposal before commission vote by December.

Expected answer: This is a multi-agency rule that requires a great deal of cooperation. I assure you, we are working diligently. But I can’t give you any date because these are all difficult issues.

Political spending: More than 1.2 million investors have petitioned the SEC to draft rules requiring firms to disclose all their political spending. What is the timeline for moving forward on the rulemaking?

Ideal answer: While this is a political hot potato, shareholders deserve to know where corporations spend their money, especially if it involves public policy which could have a reputational impact on their invested monies.

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On November 12, 1999, 16 years ago today, a longtime banking safety law known as the Glass-Steagall Act was effectively repealed when President Bill Clinton signed the Gramm-Leach-Bliley Act. The original Glass-Steagall law was passed in 1933 in response to the Wall Street crash of 1929 which led to the Great Depression. Its purpose was to build a wall between commercial and investment banking in order to prevent banks from using taxpayer-backed deposits to make risky investments. Much of the repeal came from regulatory decisions dating from the 1980s, but the 1999 law completed the task.

In the decades following Glass-Steagall, the nation enjoyed relative financial tranquility. Within a half-decade after the repeal of Glass-Steagall, Wall Street recklessness caused a crash that left a $12+ trillion hole in the economy.

The need to revive the “Safety Glass” separation between commercial and investment banking has been in the news quite a bit recently — for good reason. The nation’s biggest banks are bigger than ever and the risk of a financial meltdown and government bailouts to banks considered to be “too big to fail” is still all too present.

U.S. Senators Elizabeth Warren (D-Mass.) and John McCain (R-Ariz.) reintroduced their bipartisan “21st Century Glass-Steagall Act” legislation in July and bipartisan companion legislation was introduced in the House as well.

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By Luana Wang

If you’ve been following the IRS rulemaking on 501(c)(4) social welfare nonprofit political activity (and really, who hasn’t?), then you know that IRS Commissioner John Koskinen’s latest testimony in front of the Senate Finance Committee was one for the ages. Ranked among his previous thirty-something testimonies in front of legislative bodies, it rates somewhere above the time Commissioner Koskinen had to explain that the IRS actually does read the tax returns you send in.

Two years ago, the IRS announced a notice of proposed rulemaking which would clarify the rules on political activity for social welfare organizations under section 501(c)(4) of the tax code. Although the proposed rule was a step forward from the confusing “facts and circumstances” standard currently being used, the IRS withdrew the proposed rule for further revision after it received much criticism from both sides of the aisle.

This time, Commissioner Koskinen’s testimony contained hope for a new rulemaking, and a peek into the IRS’s evaluation of the more than 160,000 comments that the previous rulemaking received. Before we examine that evaluation, let’s also take a quick moment to recognize the comments that didn’t make it into the IRS Commissioner’s summary, and the beleaguered IRS officials who had to read each and every one of them anyway. Many of the comments submitted to the IRS were thoughtful, sincere, and legitimate criticisms of the proposed rule, from commenters across the political spectrum. However, some comments seemed to have little to do with the proposed rule, or really, anything at all.

Here are some highlights:

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It’s that time of year again — Washington has turned its focus to the threat of national default and how to fund the government. This year’s cocktail has had the additional flavors of a contested U.S. House Speaker’s race and a presidential race to spice things up, and has resulted in an actual budgetary framework for the first time in several years.

The problem now is that members of Congress are attempting to add deal sweeteners for corporate lobbyists into the final budgetary mixture. These so-called “policy riders” are legislative provisions addressing extraneous policy issues that have little or nothing to do with funding our government. They get slipped into must-pass funding bills because lawmakers hope the public won’t notice their bitter taste. These riders are generally ideological measures that the public opposes and the president would veto as standalone legislation.

Most of the attention has focused on one particularly heinous poison pill — the effort to defund Planned Parenthood — which would threaten healthcare for millions of women. Congressional Republicans have threatened to shut down the government to force us to swallow this one. But there are hundreds of other toxic ideological riders that have been added to the budget. These riders would block efforts to stop Wall Street abuses, ensure safe and healthy food and products, provide clean air and water, keep workplaces safe, prevent consumer rip-offs and corporate wrongdoing, and ensure continued access to vital healthcare services across the board.

One example is a rider that would prohibit the U.S. Department of Labor from finalizing or enforcing a rule that would ensure Americans get sound financial advice on their retirement savings. Another rider would block the U.S. Occupational Safety and Health Administration from finalizing a rule to protect workers from toxic silica dust; this rule has been more than a decade in the making about would save 700 lives a year.

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