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House Energy and Commerce to consider consumer agency tomorrow
By Ed Mierzwinski - 10/28/2009 Energy and Commerce Committee Chairman Henry Waxman (D-CA) has announced a markup vote on the Consumer Financial Protection Agency for Thursday at 10 am. The committee has not released a base text or proposed amendments yet. E&C has the right to consider FTC-related matters and matters related to governance of the new agency. Industry opponents are seeking members to offer amendments to weaken both the CFPA and FTC's authority to conduct rulemakings and -- of course -- to preempt stronger state laws.
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Credit scoring models may deny consumers who take advantage of legal rights
By Ed Mierzwinski - 10/26/2009 We're asking Congress and the FTC to investigate reports first broken by Evan Hendricks and his Privacy Times newsletter that, as professor Brian Wolfman notes in his Public Citizen Law and Policy blog entry, "the fact that a consumer has disputed her credit report can undermine her ability to get a home loan, even when the consumer was correct in the dispute."
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Dodd: Freeze credit card rate increases now!
By Ed Mierzwinski - 10/26/2009 From Senator Chris Dodd, chairman of the Senate Banking Committee:
Today Senate Banking Committee Chairman Chris Dodd (D-CT) will introduce a bill to immediately freeze credit card interest rates, fees and finance charges on existing balances. The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act enacted in May prevents arbitrary interest rate, fee and finance charge increases on a customer’s existing balance. Unfortunately, credit card companies have been jacking up rates in a last ditch effort to squeeze customers before all of the bill’s provisions can take effect.
Dodd's action follows passage last Thursday by the House Financial Services committee of legislation that would implement all remaining sections of the CARD Act on December 1, instead of next year. We support the strongest versions of both bills; we urge that the House bill's unfortunate loopholes in its new timetable that may allow some smaller predatory lenders to avoid the new deadline be eliminated from any final law.
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Professor: Wall Street pay not a problem. Hunh?
By Ed Mierzwinski - 10/24/2009 Sunday's Washington Post will feature a column 5 myths about Wall Street pay days by Professor Roy Smith. Key line:
Myth #1: The Wall Street bonus culture led to the financial crisis. There is absolutely no evidence to support this.
Well, that is certainly a contrarian view; we and others emphatically reject it. The prevailing view, which we subscribe to, is that Wall Street pay socializes risk and privatizes reward in a "heads I win, tails I also win, but you lose" game that played a critical role in the collapse; that pay and bonus structures are wrongly based on short-term rewards, not long-term performance; and that board compensation committees have violated their fiduciary duties to shareholders by rubber-stamping every executive's bonuses, at every firm, regardless of performance, as if they were all from Lake Wobegon, "where all the women are strong, all the men are good-looking, and all the children are above average." For some others' views, mostly since Goldman's record bonuses, the Fed incentives rules and the Obama pay czar's proposal were announced in the last few weeks, here's a start:
  • Fed chief Ben Bernanke: "Compensation practices at some banking organizations have led to misaligned incentives and excessive risk-taking, contributing to bank losses and financial instability." Fed's new pay and bonus proposal.
  • Elizabeth Warren "“speechless” over the record bonuses being handed out by Wall Street firms."
  • Warren Buffett: "Wall Street pay needs a "downside" when profits deteriorate because of reckless bets."
  • U.S. Senator Chuck Grassley (R-IA) "These guys ought to come to Main Street, Iowa, and see how the real world lives."
  • Pay czar Kenneth Feinberg on his proposed new limits for pay at the TARP banks in the LATimes: "The taxpayers are in deep with these seven companies," he said, "and one of my primary obligations is to see to it that the taxpayers' dollars are returned to the U.S. Treasury."
  • AFL-CIO blog quoting its pension and corporate governance expert Dan Pedrotty: "Feinberg has created a model for how corporations should address compensation. Rather than larding CEOs with cash, their compensation is tied now with restricted stocks. That is, if the company does well, so does the CEO. That’s called “incentive.”"And as Americans for Financial Security points out, the notion that these are completely publicly-accountable firms already is false. Shareholders need greater rights, including a "say on pay:"
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    • More from Paris Accord II, the film and video workshop
    By Ed Mierzwinski - 10/24/2009 media1aa.jpgThe Paris Accord II conference linking creators of content with consumers continues with a workshop today on film, video and art. Here is a long-distance Flip video snap of media futurist Gerd Leonhard presenting. Other panelists listed here on the agenda. Previous blog on yesterday's action at the event. Participants twitter at #tacd. Excerpt from the working draft of the Paris Accord document regarding film, video and art:
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    Ed Mierzwinski
    U.S. PIRG Consumer Program Director
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