Archive for the ‘Financial Reform’ 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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By Sonia Gill

Smart and effective consumer protection is preconditioned on the availability of data and information. For this reason, Public Citizen – and numerous leading consumer and privacy groups – strongly support robust and purposeful data collection and analysis by the Consumer Financial Protection Bureau (CFPB).

The CFPB’s consumer financial data collection practices allow it to monitor emerging market trends and business practices that are harmful to consumers and to respond in an effective and proportional manner – in other words, to fulfill the pro-consumer mission created for the agency by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Not all are on board. Despite being the only federal agency dedicated to protecting the average American consumer from the abusive and unfair business practices of the financial industry, the House Financial Services Subcommittee on Oversight and Investigations dedicated its last hearing of 2015 to attacking the CFPB for purported consumer privacy risks associated with the CFPB’s collection and analysis of consumer data. In yet another attempt to discredit the work of the CFPB, the subcommittee dusted off time-tested, paranoia-inducing talking points and catapulted a series of accusations at the CFPB ranging from the fantastical – likening the CFPB to an NSA-style spy agency, secretly collecting personal information from unsuspecting Americans – to the conceivable, such as potential cyberattacks against the CFPB that might result in data breaches.

While this last concern is at least a plausible one, the reality is that political opponents of the CFPB are looking for ways to  stifle the agency to protect their friends on Wall Street (friends who happen to donate generously to their reelection campaigns). These legislators are smart enough to understand the exceptional importance of data to enforce federal consumer financial law and inform the agency’s actions. By blocking access to information, they know they can cripple the CFPB’s ability to hold financial fraudsters accountable.

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By Yushen Wang

Postal Banking Petition Delivery

Congresswoman Eleanor Holmes Norton presents 150,000+ petitions signatures to a representative from the United States Postal Service on December 17

Earn, invest, save; these are the words that we frequently put before the word “money.” Some of us can do those things on our phones as easily as making a call, but that’s certainty not true for all Americans.

Nearly 28 percent of US households (or 68 million people) do not have access to affordable financial services. And even if they want, they have to pay far more (on average of $2,400 per household per year) to only have access to banking services. But, shouldn’t it be a right to be banked?

Politicians, economists, and the general public are craving a change to this unethical phenomenon, through a proven method: postal banking.

International or older people may be more familiar with this term. Postal banking, which allows anyone to do their banking — from bill payment to taking out small loans — at the same post office where they buy stamps, is not a new concept in this or other countries. In fact, it was used in the US from 1911 to 1966, and was so central to our banking system that it was seen as a precursor to the safety provided by federal deposit insurance.

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By Cameron Berube

In the wake of Citizens United, political spending in the 2016 elections already have reached dizzying heights. And since most companies refuse to disclose their political spending, it’s hard to know who’s backing who.

According to a new report from the Center for Political Activity (which benchmarks the political disclosure and accountability policies and practices of mutual funds), major mutual funds like Vanguard, which manages more retirement funds than any other firm in America, are doing next to nothing to encourage companies they hold large shares of to disclose how they use our money to influence policy.

So what are public companies doing with your money? Deregulating Wall Street? Gutting Medicare?

Nobody knows.

Americans are fed up with being drowned out by corporate interests. According to a 2015 poll, 88 percent of both Democratic and Republican primary voters agree that “the Securities and Exchange Commission should require corporations to disclose their political spending.”

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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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