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

News Release | U.S. PIRG | Financial Reform

Groups Offer Consumer Tips After Target Data Breach

We joined other leading groups to issue consumer tips after the big retailer Target had 40 million credit and debit card numbers stolen. Our main message: Don't panic. Don't pay for over-priced credit monitoring. Do check your checking and credit card accounts regularly and get your free credit reports provided by law.

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News Release | U.S. PIRG | Financial Reform

Volcker Rule Finally Out, Will Require Vigilant Enforcement and Tough Judges

Regulators today released the final so-called Volcker rule designed to prevent Wall Street banks from placing the kinds of risky bets that helped magnify the 2008 mortgage market collapse into a spectacular failure of the financial system leading to trillions of dollars in lost retirement income and the loss of millions of jobs and millions of homes. [...] The final rule is stronger than the proposed rule and stronger than the rule that the banks wanted, reflecting the outpouring of support from citizens across the country, in favor of a robust Volcker rule. [...]

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News Release | U.S. PIRG | Consumer Protection, Financial Reform

CFPB Report Confirms 2009 Credit CARD Act Works to Protect Consumers

“Today’s CFPB report on the Credit CARD Act of 2009 confirms that the law has cleaned up the worst tricks and traps that riddled the credit card marketplace. Those traps saddled consumers with unfair penalty fees and high penalty interest rates, ultimately leading to massive and unsustainable credit card debt and even bankruptcies."

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News Release | U.S. PIRG | Financial Reform

Senate Moves Toward Confirmation of CFPB Director Cordray

Today’s expected confirmation of Richard Cordray to head the CFPB for a full term is good news for consumers, and for firms that want to play fair in the financial marketplace.

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Blog Post | Financial Reform

Banks, Not CFPB, Spy On Consumers | Ed Mierzwinski

As a Tuesday, July 16th Senate showdown vote on the confirmation of Richard Cordray to direct the CFPB approaches, consumer protection opponents continue to make stuff up, such as their latest false claim that its use of data equates it with the NSA. Actually, it's the banks, not the CFPB, spying on consumers.

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Media Hit | Financial Reform

JPMorgan Chase is sued in 2008 Bear Stearns mortgage case

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News Release | U.S. PIRG | Financial Reform

Senate Rolls Back Investor Protections

Statement of Edmund Mierzwinski, U.S. PIRG Consumer Program Director on Senate Passage of the JOBS Act (Excerpt) "Today, the Senate joined the House in passing the so-called JOBS Act, legislation that will roll back investor protections, leaving senior citizens and other small investors at the mercy of the next Enron collapse, the next Gordon Gecko and the next-generation boiler room operators using social media to pitch toxic investments."

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News Release | U.S. PIRG | Financial Reform

U.S. PIRG Applauds CFPB Proposal To Regulate Biggest Credit Bureaus

“Last summer over 10,000 PIRG members submitted comments to the Consumer Financial Protection Bureau (CFPB) urging strict regulation of credit bureaus and credit scoring firms. We applaud the CFPB for its proposal today to subject the nation’s largest credit bureaus and credit scoring firms to full scrutiny as “larger participants” (CFPB pdf) in the financial marketplace."

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News Release | U.S. PIRG | Financial Reform

Robo-Signing Settlement With Big Banks Is Important Step

Today's settlement by the U.S. and 49 state attorneys general with the 5 biggest mortgage servicers - the big banks Citibank, Bank of America, Wells Fargo and JP Morgan Chase, along with Ally Financial - is an important and enforceable first step toward holding the big banks accountable for not only wrecking the economy but using a variety of unfair foreclosure practices to ruin the lives of millions of Americans and, in many cases, taking their homes illegally.

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News Release | U.S. PIRG | Financial Reform

U.S. PIRG Applauds President For “Bold and Important” Recess Appointment of Richard Cordray To Head New Consumer Financial Protection Bureau (CFPB)

President Obama is taking a bold and important step to protect consumers from financial tricks and traps by announcing a recess appointment of his well-qualified nominee, Richard Cordray, to head the new Consumer Financial Protection Bureau.

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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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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

Latest financial follies: "Bizarre" FHFA raising mortgage costs; CNBC Closing Bell overdraft debate | Ed Mierzwinski

Latest follies: Professor Alan White explains the latest antics of the "bizarre" Federal Housing Finance Agency (FHFA)--its effort to punish states with successful foreclosure mediation programs by raising their mortgage costs. Meanwhile, I join Maria Bartiromo on CNBC's Closing Bell where I blame irresponsible bankers for an increase in overdraft fees.

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Blog Post | Financial Reform

Supposed settlement between merchants and credit card networks lurching toward collapse | Ed Mierzwinski

In July, news broke that merchants and the Visa and Mastercard payment networks had agreed to settle charges that "interchange" fees that the networks charged the merchants to accept credit and debit cards were unfair. Now, all the merchant associations involved have withdrawn from the deal because it wouldn't punish the banks, wouldn't reduce the fees that result in higher consumer prices and would bind merchants, including those not yet born, from any future lawsuits for unfair payment network practices.

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Blog Post | Financial Reform

CFPB says 1 in 5 credit scores sold to consumers have "meaningful" differences from scores lenders use | Ed Mierzwinski

The CFPB has confirmed what consumer advocates have been saying all along. Credit scores heavily marketed to consumers aren't the same as those used by lenders; at least 1 in 5 consumer scores have "meaningful" differences and that "score discrepancies may generate consumer harm." That's why we call them FAKO scores.

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