Reining in Wall Street

STANDING UP AGAINST THE BIG BANKS AND WALL STREET—For more than 20 years, Consumer Program Director Ed Mierzwinski has helped us stand up against big banks and credit card companies.

A PRO-CONSUMER FISCAL FUTURE

Consumers shouldn't have to worry that their financial institutions are ripping them off, or using tricks and schemes to squeeze money out of them.

Yet for years, federal bank regulators ignored numerous warnings of increasingly predatory mortgage practices, credit card tricks, and unfair overdraft policies used by the big Wall Street banks. They also ignored warnings of risky securities being packaged and sold to investors. In the wake of the resulting financial crisis, U.S. PIRG fought for and successfully urged passage of a strong 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

Since winning federal Wall Street reform, we've worked to defend those reforms from the industry's attempts to defang, defund or delay them. In particular, since it began work in July 2011, we've had to defend the Consumer Financial Protection Bureau (CFPB), the first federal financial agency with just one job: protecting consumers. However, it took another two-year fight against the opponents of the CFPB to convince the Senate to confirm Bureau's director, Richard Cordray, to a full five-year term. The Senate finally confirmed Cordray in July 2012, eliminating any uncertainty over the CFPB's authority over credit bureaus, payday lenders and other non-bank firms.

The CFPB - in many ways the centerpiece of the broader 2010 Wall Street reforms - has already succeeded in protecting consumers, from students and soldiers to seniors and homeowners. Among the CFPB's successes have been its new regulation of the mortgage markets, its creation of a publicly-available consumer complaint database, and its investigations of the big credit bureaus. The CFPB has also made banks and credit card companies return nearly half a billion dollars to consumers who were treated unfairly.

Yet consumers, taxpayers and investors still face big risks in the financial marketplace. Big banks are allowed to make risky bets with our money, many financial institutions are still finding ways to unfairly squeeze money out of their customers, and financial industry practices still pose risks to the financial system. So in addition to defending the CFPB, we are working to protect investors, taxpayers and the financial system itself:

  • We're supporting a requirement called the Volcker Rule which would prevent big banks from using their “own” money, which includes depositor funds, to place risky bets.
  • We're urging the Commodity Futures Trading Commission not to allow the big banks to hide their reckless financial bets offshore the way that AIG and JP Morgan's London Whale did.
  • We're backing Securities and Exchange Commission rules to require that all public companies, including banks, publish the ratio of compensation between their CEO and their middle-level employees.

In short, we're building a financial regulatory system that guarantees that consumers and taxpayers are protected from predatory practices. And we're fighting to give consumers a seat at the table when it comes to oversight of the nation's financial system.

Issue updates

Media Hit | Financial Reform

Washington Post: Can’t fix error in your credit report? Call Consumer Financial Protection Bureau

"A much-cited study by the National Association of State Public Interest Research Groups found that almost 79 percent of all credit reports had some type of error."

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Blog Post | Financial Reform

Tips for fixing credit report errors yourself (don't ever use a credit repair doctor) | Ed Mierzwinski

Fox Business reporter Kelly Dilworth has a detailed "how-to" called "10 surefire steps to get errors off your credit reports." Don't go to a credit repair doctor, don't read a bunch of wacky advice on self-help websites, don't do any of that, Do what she says.

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Blog Post | Financial Reform

Consumers want "Do not track" privacy right but powerful firms fight back | Ed Mierzwinski

A new study shows that web surfers want an easy-to-use Do-Not-Track right to stop online tracking and collection of information about their web choices. But a powerful coalition of web advertisers and web publishers is fighting back, here and abroad, and it claims that such targeted advertising is what makes the Internet "free."

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Media Hit | Financial Reform

JPMorgan Chase is sued in 2008 Bear Stearns mortgage case

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Blog Post | Financial Reform

CFPB, FDIC, Fed and OCC slap AmEx Credit Card for numerous violations | Ed Mierzwinski

(UPDATED) Four federal financial regulators have announced an order for at least $85 million in restitution and $27.5 million in penalties alleging a variety of violations of equal credit opportunity, debt collection and credit reporting laws by the American Express credit card. From the CFPB: "at every stage of the consumer experience, from marketing to enrollment to payment to debt collection, American Express violated consumer protection laws."

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Blog Post | Financial Reform

CFPB to announce mortgage servicing rules and other consumer news of the week | Ed Mierzwinski

(Update: phottos added.) Today, U.S. PIRG will be an invited guest as the Consumer Financial Protection Bureau proposes new mortgage servicing rules to prevent, among other things, a recurrence of the robo-signing scandal. Among the other important news items of the week, in case you missed it, Ohio has made it harder for aggrieved consumers to obtain redress when ripped off.

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Blog Post | Financial Reform

Corporate crime update: Phone companies stop cramming, but banks still run amok | Ed Mierzwinski

The industry trade paper American Banker is reporting  that "Bank of America Sold Card Debts to Collectors Despite Faulty Records" in 2009 and 2010. Good to know. It confirms previous consumer group studies that had documented that big banks were forcing consumers to arbitrate and pay "debts" that may not have been owed (some were due to identity theft or sloppy records). However, in the latest fallout from a U.S. Senate Commerce committee investigation of unauthorized third-party billing on phone bills (cramming), Chairman Jay Rockefeller has announced that ATT has joined other big telcos in finally promising to drop the tawdry practice of "cramming," which is a technical term meaning "making big bucks by allowing fly-by-night firms selling useless junky products consumers don't want and didn't buy to use phone bills as cash registers."

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Blog Post | Financial Reform

FTC releases major report recommending privacy reforms | Ed Mierzwinski

The U.S. Federal Trade Commission (FTC) today released a major report on consumer privacy. From FTC -- "In the report, “Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers,” the FTC also recommends that Congress consider enacting general privacy legislation, data security and breach notification legislation, and data broker legislation."

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Blog Post | Financial Reform

Investor rights on chopping block in U.S. Senate (updated) | Ed Mierzwinski

(See updates (click Keep Reading): Today, the U.S. Senate will consider the House-passed "JOBS" Act, which weakens investor protections -- many passed after the Internet bubble burst and Enron's follow-on bankruptcy destroyed jobs and retirement savings. Its supporters claim the bill to make it easier for small companies to navigate SEC rules and  thereby promote small company growth (which theoretically creates, you guessed it, jobs), has already been thoroughly vetted. Yet, the bill is opposed by some of the Senate's most thoughtful investor champions and opposed by U.S. PIRG and numerous consumer and investor organizations. We support a substitute to be offered by Senators Jack Reed (RI), Mary Landrieu (LA) and Carl Levin (MI) because it protects investors. But if the substitute fails to get 60 votes, the JOBS Act will be non-amendable under an ill-advised special fast-track system set up to speed it through.

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Blog Post | Financial Reform

Senate Wants to Pass Dangerous Just Open Bucket Shops Act (so-called Jobs Act) | Ed Mierzwinski

You may not remember any pre-2008 scandals -- dot.com bubble?; Enron scandal? --  since they are so yesterday's news. Don't worry. The House and Senate don't remember, either. If the Senate has its way with quick passage of the misnamed already-House-passed Jobs Act, -- better named by the New York Times columnist Gail Collins as the "Just Open Bucket Shops Act" -- conflicted analysts will make stuff up again, government watchdogs like the SEC and PCAOB will be chained, and small and novice investors will be looking at "crowd-funded websites" from good guys and bad guys, too, including often-fraudulent Chinese IPOs. Things are so bad that the Senate's leading investor champions aren't even sure they can get enough votes to modify the proposal -- let alone block it -- even with a compromise alternative (letter from PIRG-backed AFR/CFA). Only in Washington.

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