Archive for the ‘Consumer Protection’ Category

Meet Mr. Ticker. He’s the hypothetical rogue banker described in Washington’s newly proposed rule to reform Wall Street pay.

Six federal agencies charged with overseeing Wall Street — from credit unions to mega-banks — are proposing rules to implement Section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This section charges them to write rules that prevent “excessive” pay packages that lead to “inappropriate risk-taking.”

The proposed rule spans 280 pages, most of which consists of explanation of the rule. The actual rule is about 20 of these pages. In an effort to communicate in “plain English,” the agencies describe hypothetical bankers Ms. Ledger (who’s honest) and Mr. Ticker (who’s not).

In the inevitably prudish lexicon of the banking agencies, “Mr. Ticker is a significant risk-taker who is the senior manager of a trader and a trading desk that engaged in inappropriate risk-taking in calendar year 2021, which was discovered on March 1, 2024. The activity of the trader, and several other members of the same trading desk, resulted in an enforcement proceeding against ABC and the imposition of a significant fine.”

Restated, Mr. Ticker and his team manipulated markets, and successfully hid it from the board for three years.

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Corporate crime shouldn’t pay. And company executives certainly shouldn’t be given bonuses when their company commits one of the most outrageous environmental crimes in memory.

But that’s exactly what Volkswagen executives are seeking.

News reports say executives at VW – the company reeling from the emissions-cheating scandal – are refusing to forego scheduled bonuses.

Volkswagen has admitted to installing software designed to evade emissions rules. The company deliberately deceived consumers and regulators, consciously poisoning the air with gases that cause respiratory illness and exacerbate climate change.

The fallout from the scandal, executives say, threatens the company’s very existence – yet those same executives want to collect bonuses!

It’s as if the executives at the shipping company that owned the Titantic demanded bonuses a few months after the ocean liner went down.

The decision to award the bonuses will not be formally published until April 28, so there’s still time for VW to get some sense.

Robert Weissman is the president of Public Citizen

Public Citizen and Americans for Financial Reform have collected more than 21,000 signatures from people in agreement: Students deserve their day in court if universities are ripping them off — and the Department of Education should not facilitate predatory colleges by giving them federal funding.

Click to view individual petitions and signers:

Public Citizen (10,277 signers)
Americans for Financial Reform (11,145 signers)

Three weeks ago, Public Citizen formally petitioned the Department of Education to consider a rule to withhold federal Title IV funding from colleges and universities that bury forced arbitration clauses in students’ enrollment contracts. Our press release can be found here .

These arbitration clauses, usually buried in the fine print of an enrollment contract, bar students from seeking justice in court if the students feel their schools do not live up to their end of the deal. For-profit colleges have been using these clauses to ensure students can’t hold the colleges accountable in court, but are instead subjected to a private arbitration process that favors large corporations and their lawyers.

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Last week, some members of the House Financial Services Committee lavished praise on a piece of legislation they said would “restore due process rights to all Americans.”

“All the bill says is that if somebody wants their day in court, they should have their day in court,” the bill’s sponsor, Rep. Scott Garrett (R-N.J.), explained, adding that “preserving the rights of Americans to defend themselves in a fair and impartial trial…is one of the most fundamental rights, and it is enshrined in our Constitution.”

Representative Jeb Hensarling (R-Texas), Chair of the committee, championed the measure as well. “Every American deserves to be treated with due process,” Rep. Hensarling declared. “They ought to have the opportunity to have a trial by jury. They ought to be able to engage in full discovery. They ought to be subject to the rules of evidence.”

A listener might have thought these legislators were standing up against forced arbitration – “rip-off clauses” that big companies bury in the fine print of contracts to prevent people from suing them, even if they have broken the law.

Astoundingly and unfortunately, the legislators were actually moving in the opposite direction. They were extolling HR 3798, the so-called “Due Process Restoration Act,” which would extend special legal protections to Wall Street banks and other financial firms charged with violating federal securities law by the Securities and Exchange Commission (SEC).

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Privatization is the age-old right-wing response to imagined problems.

But if a public function like preventing plane crashes is transferred to corporations, the result could mean tragedy.

A threat to our wallets and flight safety, the air traffic control privatization effort currently underway in Congress is another move by right-wing lawmakers to deliver a favor for corporate interests while ignoring the consequences for consumers.

This week, Public Citizen joined with our partners in the Americans Against Air Traffic Privatization coalition to deliver more than 130,000 petition signatures to members of Congress demanding that air traffic control stay under federal government purview and not be spun off to a new corporatized entity.

The air traffic control system is neither broken nor bankrupt, and the only uncertainty in its running is the confusion instigated by Congress around Federal Aviation Administration (FAA) funding reauthorizations. The solution to the funding issue is not to privatize air traffic control but to give the FAA the stability it deserves.

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