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 | Consumer Protection, Financial Reform

CFPB Ends Kickbacks by Mortgage Insurers

U.S. PIRG applauds CFPB’s enforcement action, including over $15 million in total penalties, against four mortgage insurers to end the practice of giving kickbacks to mortgage companies to get their business.

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Blog Post | Financial Reform

Do better Facebook friends mean a better credit score? | Ed Mierzwinski

"Big Data" has created a new front in the war on privacy. Should a prospective employer be able to "friend" you or use your Facebook password to vet you?  When, if ever, should colleges, employers and lenders be able to look at your Facebook or other social network pages to see if your friends make you a better bet to enroll, hire or grant a loan to than someone with loser friends?

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Blog Post | Financial Reform

Free Cookies-Strings Attached | Ed Mierzwinski

The price consumers pay to access most online content is the tracking of their every click on the World Wide Web by data miners and ad networks. Consumer and privacy advocates are seeking to address such online tracking through Do-Not-Track regulation, which could be considered in the U.S. Senate Commerce Committee soon.

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

New FTC Study Points to Much-Needed Reforms for Credit Reporting Industry

Advocates from the National Consumer Law Center and U.S. PIRG lauded the findings of a Federal Trade Commission study made public today that confirms their own findings that credit reports are riddled with errors. The groups also urged the Senate to confirm a full-term director of the Consumer Financial Protection Bureau (CFPB) to eliminate any uncertainty over the CFPB’s supervisory authority to examine credit bureau operations and order reforms.

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News Release | U.S. PIRG | Financial Reform

U.S. PIRG Commends President for Renomination of Richard Cordray to Head CFPB

The CFPB is the nation's first financial regulator with only one job — to protect consumers in the marketplace. The Senate should reject demands by opponents of consumer protection to condition Cordray's approval on the gutting of the agency's authority or on the removal of its independent funding.

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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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Media Hit | Financial Reform

LA Times: Richard Cordray Appointment 'Turns Lights On' at Consumer Bureau

"Congress wanted the bureau to protect consumers no matter where they shopped for financial products," said Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group. "With a director, the public can now have confidence the consumer bureau is ready, willing and able to investigate their financial problems."

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News Release | U.S. PIRG Education Fund | Financial Reform

New Report Highlights Reasons for New Consumer Protections

The report outlines predatory financial practices that hurt consumers and led to the collapse the economy, costing us eight million jobs, millions of foreclosed homes and trillions of dollars in lost home and retirement values.

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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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Blog Post | Financial Reform

Financial follies update: Discover Card pays deceptive marketing penalty | Ed Mierzwinski

Discover Card has paid a $14 million civil penalty to the CFPB and FDIC, plus refunded over $200 million to ripped-off consumers, in the latest case involving useless, junk credit insurance and credit monitoring add-ons that consumers didn't buy, but pay for, to credit card bills. Read more for that and other weekend financial follies.

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Blog Post | Financial Reform

CFPB hearing today in House, expect more attacks | Ed Mierzwinski

As Richard Cordray, director of the Consumer Financial Protection Bureau, prepares to testify this morning in the House, committee leaders have released statements showing they're not so much interested in oversight. They;ve already made up their minds that an agency with only one job, protecting consumers, is a bad idea.

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Blog Post | Financial Reform

It happened 4 years ago this weekend, and Congress has already forgotten | Ed Mierzwinski

Four years ago, on September 14-15, 2008, the Lehman Brothers investment bank declared bankruptcy while Bank of America acquired another foundering investment bank, Merrill Lynch -- major events that froze the financial markets and led in a few days to a $700 billion bailout of the financial system. Just four years later, some in the Congress have forgotten that real people and the economy are still suffering from the financial collapse, as it steps up Wall Street-backed efforts to prevent regulators from protecting the public.

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Blog Post | Financial Reform

Bank lobby launches dark money group to kill reform and other Friday Follies | Ed Mierzwinski

(UPDATED) The American Bankers Association's latest effort to kill financial reform is to raise millions of dollars through a new dark money group (like a secret SuperPAC) disguised as a social welfare organization but designed to elect Senators who agree with their Bizarro-World narrative that the financial collapse of 2008 was not their fault.  Meanwhile, read more Friday Financial Follies, because in Washington, we don't have to make this stuff up.

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