Category Archives: Corporate Personhood

House Approves $700B ‘Cash Cow for Weapons Companies’—But Single Payer ‘Too Expensive’

“What if we tell House Republicans and Democrats that North Korea wanted to close schools, take our healthcare away and pump CO2 into our air—we could suddenly, magically find $700 billion dollars for all of it.”

By Jake Johnson, staff writer for CommonDreams. Published 11-15-2017

“This is a massive cash cow for weapons companies, nothing more,” writes Alex Emmons of The Intercept. (Photo: mariordo59/Flickr/cc)

In a bipartisan show of support for endless war and out-of-control military spending, the House of Representatives on Tuesday overwhelmingly approved the nearly $700 billion National Defense Authorization Act of 2018 that aims to boost war outlays by $80 billion—an amount that critics noted would easily cover the costs of free public college tuition and other initiatives that are frequently dismissed as too expensive.

The final vote tally was 357-70, with 127 Democrats throwing their support behind the bill. Sixty-seven Democrats—including Reps. Barbara Lee of California, Keith Ellison of Minnesota, and John Conyers of Michigan—voted against the legislation. Continue reading

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‘There You Have It’: McConnell Says He ‘Misspoke’ When He Promised No Tax Hike on Middle Class

New York Times analysis published Friday found that millions of middle class families would see their taxes rise under GOP plan

By Jake Johnson, staff writer for CommonDreams. Published 11-10-2017

Following the release of a slew of analyses showing that the GOP tax plan would raise taxes on many middle class families—despite repeated promises to the contrary by the Trump administration and Republican lawmakers—Senate Majority Leader Mitch McConnell (R-Ky.) conceded in an interview with the New York Times Friday that he “misspoke” when he declared last week that “nobody in the middle class is going to get a tax increase.”

“I misspoke on that,” McConnell told Times reporter Sheryl Gay Stolberg‏. “You can’t guarantee that absolutely no one sees a tax increase, but what we are doing is targeting levels of income and looking at the average in those levels and the average will be tax relief for the average taxpayer in each of those segments.” Continue reading

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Lindsey Graham Latest Republican to Admit GOP Tax Plan Is All About Keeping ‘Financial Contributions’ of Donors Flowing

“Republicans are literally out here warning each other that their big donors will stop writing checks if they don’t do their bidding.”

By Jake Johnson, staff writer for CommonDreams. Published 11-9-2017

As Common Dreams reported Tuesday, Rep. Chris Collins (R-N.Y.) has made a similar remark, complaining that his donors are pressuring him to pass enormous tax cuts or “don’t ever call me again.” (Photo: Gage Skidmore/flickr/cc)

Sen. Lindsey Graham (R-S.C.) on Thursday became the latest Republican to admit the GOP is trying to ram through massive tax cuts for the rich to satisfy its wealthy donors, telling a journalist that if the party’s tax push fails, “the financial contributions will stop.”

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GOP ‘Propaganda’ Not Working: Only 13% Believe Tax Plan Will Help Middle Class

New survey also shows that 60 percent believe the Republican plan will “mainly favor” the rich

By Jake Johnson, staff writer for CommonDreams. Published 11-3-2017

Photo: YouTube

For months Republicans and President Donald Trump have worked to convince Americans that massive tax cuts for the top one percent and the largest corporations would somehow primarily benefit the working class, but a new Washington Post/ABC News poll published Friday finds that the public isn’t buying the GOP’s “propaganda.”

Despite House Speaker Paul Ryan’s (R-Wis.) insistence on Thursday that his party’s proposals are geared toward helping “the middle class families in this country who deserve a break,” only 17 percent of Americans believe the GOP tax plan “mainly favors” the middle class, while 60 percent believe their plan would primarily benefit the wealthiest. Continue reading

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Why we need to save the Consumer Financial Protection Bureau

This article was originally published in TheConversation.

Senator Elizabeth Warren has faced battles with Republicans since the CFPB was created. Image via YouTube screen shot.

Republicans in Congress and the White House have been very blunt about their desire to gut the Consumer Financial Protection Bureau – and the threats to it are mounting.

The agency was launched in 2011 in the aftermath of the financial crisis as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The goal was to protect consumers from deceptive or misleading practices in the financial industry.

At the moment, Republicans seem focused on blocking CFPB rules they don’t like, such as one that would have prevented the use of arbitration clauses in financial contracts, making it easier for people to band together to sue banks for wrongdoing. Separately, the Trump administration has been heavily critical of the CFPB, and its director is said to be considering leaving before his term expires next July, which would allow the president to pick his replacement.

So what would you miss if the agency suddenly disappeared or got gutted?

In short, a lot. We base this conclusion on the work the three of us have done in recent decades. One of us (Sovern) has been writing about consumer law for more than 30 years, while the other two of us direct a legal clinic that represents elderly consumers. We’ve seen the worst of what financial companies can do, and we’ve also witnessed how the CFPB has begun to reverse the tide.

John Stumpf, far left, lost his job as CEO of Wells Fargo as a result of the scandal over fraudulent accounts. Reuters/Gary Cameron

Life before CFPB

If you are one of the more than 29 million consumers who have collectively received nearly US$12 billion back from misbehaving financial institutions because of the CFPB’s efforts, you already know its value. But even if you are not, you have probably benefited from the bureau’s existence.

Before Congress created the bureau, there was no federal agency that made consumer financial protection its sole mission. Rather, consumer protection was rolled into the missions of a bunch of different agencies. And, as we saw during the financial crisis, regulators often gave it a back seat.

Congress, for example, gave the Federal Reserve the power to bar unfair and deceptive mortgage lending in 1994. Yet the central bank considered consumer protection a backwater and didn’t use that power until 2008 – too late to prevent the Great Recession. Congress took it away two years later when it passed Dodd-Frank.

The Office of the Comptroller of the Currency regulates banks but was so preoccupied with ensuring lenders were safe that it failed to protect consumers from their predatory subprime mortgages – so much so that it prevented states from doing so too. And now President Trump has put a former bank lawyer in charge of it. The Federal Trade Commission, which is tasked with fighting deceptive business practices, lacked the power to prevent such dangerous lending.

This meant consumer protection on financial matters fell through the cracks.

Wells Fargo’s recent fraud scandal is a case in point. In the early 2000s, Wells Fargo employees began opening fake accounts in clients’ names without permission, leading in some cases to lower credit scores and a variety of fees. The bank ultimately opened millions of fraudulent bank and credit card accounts before the scheme came to an end last year.

But as early as 2010, before the CFPB was set up, regulators at the OCC were increasingly aware of what was happening at Wells Fargo thanks to hundreds of whistleblower complaints. The OCC even confronted the bank, yet failed to take any action despite many red flags, according to an internal audit.

It wasn’t until the Los Angeles city attorney and the CFPB became involved years later that Wells Fargo took forceful action to stop the fraud. The regulators fined Wells Fargo a total of $185 million and forced it to refund fees it had charged customers and hire an independent consultant to review its procedures.

More importantly, they sent a clear message to other financial institutions: Cheat consumers and you will face the consequences.

Consumer Financial Protection Bureau Director Richard Cordray testifies on Capitol Hill in 2013. AP Photo/Manuel Balce Ceneta

Protecting consumers

Since its inception, the bureau has acted repeatedly to stop financial institutions from harming consumers.

It blocked debt collector attorneys from suing consumers based on false information. It discovered systemic problems with consumer credit reports and forced companies to correct errors. It compelled credit card companies to refund illegal fees. It protected borrowers from unlawful student loan servicing practices. It made lenders repay consumers they discriminated against. It recovered money for veterans who complained of abusive financial practices.

When the bureau began publishing consumer complaints on its website, companies that might previously have ignored negative feedback paid attention. Financial institutions have responded to complaints to the CFPB more than 700,000 times, often by providing a remedy to the consumers.

Besides protecting consumers, however, Congress had a second motive in creating the bureau: to help prevent the kind of mortgage lending that helped cause the Great Recession.

To that end, the bureau has adopted rules that help consumers to understand their mortgages – something that often wasn’t possible under the previously misleading mortgage disclosures. It also issued regulations to prevent consumers from taking out mortgages that they couldn’t repay. And after borrowers take out a mortgage, CFPB servicing rules establish the procedures servicers must follow when communicating with borrowers, correcting errors, providing information and dealing with loan modification requests.

Two of us have personal experience with one of the bureau’s new mortgage rules, which powerfully illustrates the value of the CFPB.

In 2014, Alice, a client of our law school clinic, was struggling to pay the mortgage on her home – which she had refinanced a few years earlier – after a stroke forced her into retirement. Our clinic helped her apply for a modification of her loan.

But within weeks, instead of acknowledging Alice’s application, the loan servicer summoned her to court to begin foreclosure proceedings in violation of CFPB servicing rules. Fortunately, our clinic was able to rely on those rules in getting the foreclosure action dismissed. Alice got her loan modified and remains in her home.

Demonstrators tried to draw attention to the subprime mortgage crisis back in early 2008. AP Photo/Matt Rourke

Protecting the vulnerable

This reveals how the bureau is particularly important to protect vulnerable consumers, like the elderly, who are frequently targeted by fraudsters and predatory lenders because of their cognitive and other impairments and because they often have accumulated substantial assets. The CFPB is the only federal agency with an office specifically dedicated to protecting the financial well-being of older adults.

The bureau has brought cases against companies that attempted to take advantage of seniors by, for example, misrepresenting the interest rates on pension advance loans or deceptive advertising. In 2015 alone, consumer complaints to the CFPB brought relief to more than 600 older Americans just through debt collection problems.

The bureau has also worked to prevent financial abuse of the elderly, estimated to cost seniors as much as $36 billion annually. The CFPB has educated financial institutionsnursing facilities and others about recognizing and stopping elder financial abuse and exploitation.

Consumer protection in peril

Given Alice’s ill health, the consequences for her might have been disastrous if she had been thrown out of her home. But now she – and all of us – face the loss of the CFPB’s aid.

The CFPB is under attack from Republican members of Congress who believe more in lifting bank regulations than in protecting consumers. Some members have proposed eliminating the agency altogether.

The House of Representatives has passed a bill that would cripple the CFPB by, for example, taking away the power it used to fine Wells Fargo for opening illegal accounts and concealing its complaint database from public view. In other words, it would force the bureau to sit idly by as financial institutions lie to consumers. Even if the bureau survives, it may be less protective of consumers when its current director, Richard Cordray, leaves. His term expires next summer, and he may step down even sooner. Then we might see a former banker or bank lawyer put in charge, just as has happened at the Treasury Department and comptroller’s office.

Nearly every American has or will have a loan or bank account, a prepaid card, credit card, a credit report or some combination of those, and so has dealings with a financial institution policed by the CFPB. But few of us read the fine print governing these things or can understand it when we do. That gives the companies that write these agreements the ability to draft them to suit their own interests at the expense of consumers.

Similarly, we do not always know when a financial institution takes advantage of us, just as Wells Fargo customers did not always know that it had opened unauthorized accounts that lowered their credit scores.

Consumers need protection from misbehaving companies. If the bureau is eliminated, significantly weakened or starts protecting banks rather than consumers, all consumers will suffer.

This is an updated version of an article originally published on July 10, 2017.

About the Authors:

Disclosure statement

Along with three co-authors, Jeff Sovern received a $29,510 grant from the American Association for Justice Robert L. Habush Endowment and by a grant from the St. John’s University School of Law Hugh L. Carey Center for Dispute Resolution in 2014 to study arbitration. It resulted in an article. Along with Professor Kate Walton, he received a grant from the National Conference of Bankruptcy Judges Endowment for Education to study debt collection, resulting in another article. He is a member of the National Association of Consumer Advocates.

Ann L. Goldweber is affiliated with NACA as a member.

Gina M. Calabrese is affiliated with the National Association of Consumer Advocates, New Yorkers for Responsible Lending, and the Association of the Bar of the City of New York (former chair, Committee on the Civil Court).

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‘Death Sentence for Local Media’: Warnings as FCC Pushes Change to Benefit Right-Wing Media Giant

Free press advocates say rule changes are “massive handout” to broadcaster Sinclair that would have far-reaching and negative impacts in communities nationwide

By Jessica Corbett, staff writer for CommonDreams. Published 10-26-2017

Federal Communications Chairmain Ajit Pai continues to push through rollbacks that critics warn will enable major media companies to have an outsize influence on public opinion and fail to serve local communities. (Photo: USDA/Flickr/cc)

In a series of moves this week that have alarmed free speech advocates and critics of media consolidation, the Federal Communications Commissions (FCC) voted to abolish a rule requiring radio and television broadcasters to maintain studios near the communities they serve, and FCC chairman Ajit Pai announced further plans to end certain media ownership rules.

The policy shifts are expected to significantly benefit the right-wing Sinclair Broadcast Group—whose reported close ties to Pai have raised concerns as the federal government reviews Sinclair’s proposed $3.9 billion merger with Tribune Media, which would expand the broadcaster’s reach to 72 percent of the country. Continue reading

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VP Mike Pence Swings into Senate to Deliver ‘Wet-Kiss-to-Wall-Street’ Tie Breaker

“No wonder Americans think the system is rigged against them,” says Senator Elizabeth Warren. “It is.”

By Jon Queally, staff writer for CommonDreams. Published 10-25-2017

Vice President Mike Pence presiding over the Senate on Capitol Hill in Washington, Tuesday, Feb. 7, 2017, during the Senate’s vote on Education Secretary-designate Betsy DeVos. On Tuesday night, Pence returned to the chamber again to a break another tie. This time it was to make sure it’s easier in the future for financial service companies and other Wall Street darlies to make it easier to rip-off consumers. (Photo: Senate Television)

Just in time to do the bidding of the “rich and powerful,” as one Democratic Senator put it, Vice President Mike Pence was summoned to the Senate chamber on Tuesday night where he cast the tie-breaking vote in order to scrap a federal rule designed to protect consumers from so-called “rip-off clauses” used by Wall Street and other corporations.

While in the end it was two Republicans, Sens. Lindsey Graham of South Carolina and John Kennedy of Louisiana, who joined with Democrats and the Senate’s two Independents in voting against the resolution, Pence broke the 50-50 tie in order to scrap the rule. Continue reading

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Stiffing US Taxpayers on ‘Grand Scale,’ Fortune 500 Holding $2.6 Trillion Offshore

“As Congress considers proposals to institute a near zero percent tax rate on profits booked offshore by multinational corporations, the findings in this report should give policymakers pause.”

Written by Jake Johnson, staff writer for CommonDreams. Published 10-17-2017.

“Congress created the loopholes in our tax code that allow offshore tax avoidance and force ordinary Americans to make up the difference,” the new study observes. (Photo: Michael Fleshman/Flickr/cc)

As President Donald Trump and the Republican-controlled Congress intensify their push for massive corporate tax cuts that critics have said would encourage businesses to offshore profits and jobs, a new report published Tuesday by U.S. PIRG and the Institute on Taxation and Economic Policy (ITEP) found that 73 percent of companies on the Fortune 500 list are already taking advantage of overseas tax havens—costing the United States $752 billion in federal tax revenue last year alone.

The new study discovered that, in total, America’s most profitable corporations in 2016 had $2.6 trillion stashed overseas in over 9,000 subsidiaries in various locations, including notorious tax havens like Bermuda and the Cayman Islands.

Clark Gascoigne, deputy director of the Financial Accountability and Corporate Transparency (FACT) Coalition, cautioned in a statement on Tuesday that the Trump-GOP tax proposals would, if passed, make this bad situation even worse.

“As Congress considers proposals to institute a near zero percent tax rate on profits booked offshore by multinational corporations, the findings in this report should give policymakers pause,” Gascoigne said. “The study shows that today’s flawed tax system allows for gaming on a grand scale.”

The PIRG-ITEP analysis makes clear that corporate tax avoidance is both an unnecessary problem—”Congress created the loopholes in our tax code that allow offshore tax avoidance and force ordinary Americans to make up the difference”—and a pervasive one.

At least 366 of the 500 companies on Fortune’s list “operate one or more subsidiaries in tax haven countries.” Furthermore, “30 companies with the most money officially booked offshore for tax purposes collectively operate 2,213 tax haven subsidiaries.”

But the report also highlights the fact that there are several “particularly egregious examples”:

  • Apple, which “holds at least $246 billion offshore, a sum greater than any other company’s offshore cash pile,” would owe $76.7 billion in U.S. taxes if this profit was not overseas;
  • Citigroup, which stashes $47 billion overseas, would owe $13.1 billion in U.S taxes; and
  • Nike, which holds $12.2 billion offshore, would owe $4.1 billion in U.S. taxes.

Richard Phillips, a senior policy analyst at ITEP, argued that in the face of these numbers, Congress should be looking to close loopholes that allow businesses to offshore profits on an enormous scale, not open them even further, as Trump and the GOP have proposed.

“Lawmakers shouldn’t be discussing how to sweeten the pot and give corporations a huge tax break that amounts to a huge financial reward for engaging in bad corporate behavior,” Phillips said.

The PIRG-ITEP analysis outlined several steps that could be undertaken by lawmakers in the place of their attempts to slash taxes, gut the safety net, and further incentivize offshoring.

“To end tax haven abuse, Congress should end incentives for companies to shift profits offshore, close the most egregious offshore loopholes, strengthen tax enforcement, and increase transparency,” the study concluded.

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In First, Two Major Cities Sue Big Oil for Climate Crimes

San Francisco and Oakland charge that fossil fuel companies “stole a page from the Big Tobacco playbook” with misleading campaigns and should pay for damage from rising seas

By Jessica Corbett, staff writer for Common Dreams. Published 9-21-2017

The Embarcadero at high tide. Photo: Heidi Nutters/flickr

Environmentalists are celebrating two new lawsuits filed by the cities of Oakland and San Francisco, California, in attempts to hold some of the world’s largest oil companies to account for fueling climate change.

“It’s time to hold these climate deadbeats accountable,” said Greenpeace’s climate liability campaigner Naomi Ages, after the suits were announced this week. Continue reading

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Instead of Protecting the Earth, EPA Agents Now Forced to Serve as Pruitt Bodyguards

Unsurprisingly, the number of environmental crime cases has declined rapidly since Pruitt took charge

By Jake Johnson, staff writer for Common Dreams. Published 9-20-2017

Pruitt’s 24/7, 18-member security detail “demands triple the manpower of his predecessors” and is forcing “officials to rotate in special agents from around the country who otherwise would be investigating environmental crimes,” the Washington Post reported. (Photo: Gage Skidmore/Flickr/cc)

Thanks to a hiring freeze, budget cuts, and the exorbitant travel needs of Trump’s cabinet, Environmental Protection Agency (EPA) agents are being forced to ditch climate crime investigations in order to serve as personal bodyguards for EPA administrator Scott Pruitt, resulting in what one critic called an “evaporation of criminal enforcement.”

The EPA head has traditionally had one of the smallest security details among cabinet members,” the Washington Post reported on Tuesday. But Pruitt’s expansive security team—which cost taxpayers over $830,000 in his first three months as EPA chief—has shattered all precedent. Continue reading

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