As I do from time to time, I recently went online to catch up on what gives at Public Citizen, the Washington-based consumer-rights advocacy group established by Ralph Nader in 1971. It is currently headed by Robert Weissman, a star Harvard Law School graduate and public interest attorney at the Centre for Responsive Law. Weissman is also the editor of Multinational Monitor, a magazine that tracks corporate actions around the world. This is his latest report which, I reckon, probably echoes worldwide. – The Editor
“From 2002 to 2008, the five biggest US banks – Bank of America, Citigroup, Goldman Sachs, J P Morgan and Morgan Stanley – collectively raked in profits at an average rate of over $25 billion a year. Then they nearly destroyed the global economy, only for us to be told about banks being ‘too big to be allowed to fail’ – a scam if ever there was one. We fought hard to win landmark Wall Street reform laws. And we worked with Elizabeth Warren to get the Consumer Financial Protection Bureau up and running.
Meanwhile, those same Big Banks resisted every step of the way. And they spent millions upon millions on an army of lobbyists. And they spent millions upon millions more – fully exploiting the Supreme Court’s Citizens United abominable judgment – backing political candidates who would do their bidding. And they haven’t gone a single day without whining about commonsense safeguards intended to keep their clearly dangerous greed in check. So you may be just the slightest bit surprised and/or irked by this: From 2009 to 2014, the collective profits of those same Wall Street titans averaged almost $42bn a year – 66% more than before the crash they caused.
I am sick of these gargantuan corporations – along with their entitled, grotesquely wealthy CEOs and their bought-and-sold political puppets – fighting even modest attempts by We the People to protect ourselves as they just take more and more and more from us. What follows are some of the ways Public Citizen is working to reduce Wall Street’s power and to protect everyday consumers from rip-offs big and small.
Breaking up the Big Banks: If a corporation is ‘too big to fail,’ it is too big, full stop. Public Citizen worked on a bill recently introduced that would break up banks deemed systemically important by global authorities. We are also among the leading voices for shareholder resolutions to break up the largest banks – including a widely reported resolution initiated by our financial policy expert, Bartlett Naylor, to explore breaking up Bank of America.
Public Citizen will continue working with champions in Congress, including Senator Elizabeth Warren, to restore rules originally put in place after the Great Depression that require federally insured banks to separate their high-risk financial gambling from ordinary banking services used by everyday folks like you and me.
Ending the charade of ‘too big to jail’: The Big Banks have essentially been granted immunity despite widespread, repeated and devastating criminal behaviour. Thanks to Public Citizen’s work, during congressional confirmation hearings for Attorney General Loretta Lynch, she was questioned about the ‘deferred’ prosecution agreement Lynch provided to mega-bank HSBC for money laundering. The Department of Justice may at last be stepping away from deals that let Big Banks escape criminal prosecution in exchange for promises not to break the law in the future.
Controlling executive pay: Astronomical Wall Street salaries have driven up CEO pay across the economy, establishing a culture where outlandish executive compensation is the norm. This contributes to the staggering wealth inequality that plagues our nation. And it incentivises risky, shortsighted behaviour. Public Citizen led the charge for the Securities and Exchange Commission to issue rules requiring corporations to disclose CEO pay relative to that of median employees – which the agency finally did in August.
Jamming the revolving door: It’s epidemic: Wall Street executives get bonuses for moving to low-paid jobs in government agencies that are supposed to oversee the Big Banks, while federal regulators are wooed by lucrative job offers to leave public service and go to work on Wall Street.
Public Citizen is promoting the recently introduced Financial Services Conflict of Interest Act that would prevent new agency officials from taking official actions that directly benefit former employers and prohibit Wall Street firms from offering ‘golden parachutes’ to executives who take government positions.
Implementing consumer protections: The banks have tried to kill or cripple the Consumer Financial Protection Bureau from Day One. One particularly critical fight is over insidious provisions in contracts for numerous financial products that prevent consumers from joining together in class actions – in effect giving banks a licence to steal by making it virtually impossible for consumers to obtain compensation for small-dollar rip-offs.
We are proud to be pushing back against Wall Street’s greed.”
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