About Caroline Ristaino

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Trump’s War On Regulations: A War on Public Health, Free Markets, and American Consumers

On June 5, the Coalition for Sensible Safeguards, an alliance of more than 160 public advocacy groups that is chaired by Public Citizen, hosted “The War on Regulation: Good for Corporations, Bad for the Public” symposium. The event, which featured Senator Elizabeth Warren (D-Mass.) and Maryland Attorney General Brian Frosh as keynote speakers, laid out the current deregulatory frenzy: how the Trump administration is carrying it out, and how it threatens the safety and wellbeing of everyday Americans.

In his opening remarks, Public Citizen President Robert Weissman highlighted three themes that would emerge from the symposium. First, the White House has justified deregulation by “systematically suppressing evidence” and employing “constructs that are untrue.” Second, corporate, not ideological, interests are driving deregulation. And finally, regulatory processes are often discussed in abstract terms but their consequences play out in the lives of everyday people.

“What’s the difference between basic safety for toasters and housing mortgages?” Sen. Warren asked in her keynote address. In the 1970s, leaving a piece of toast to cook too long could light your home on fire. Before the federal government required safety regulations for toaster ovens, toasters had a one in five probability of bursting into flames. In 2007, mortgages were as likely as 1970s toasters to cost a family their home. And in 2007, there was no government agency to stop the sale of exploding mortgages.

Following the 2008 economic crash, Warren founded the Consumer Financial Protection Bureau (CFPB)—a federal agency to protect Americans from implosive mortgages (among other risky investments) in the same way that the government has protected consumers from highly-flammable toasters. Today, the Trump administration is dismantling the rules that, in Warren’s words, “empower people to live, work, and do business freely and safely.” This war on regulation, she argued, “is a war on public health, a war on public safety, a war on truly free American markets, a war on American workers, a war on American consumers.”

Corruption has made this deregulatory frenzy possible. The appointment of Scott Pruitt, a former coal industry lawyer, to Environmental Protection Agency chief is only one example of how Trump has put the foxes in charge of the henhouse. Meanwhile, Republican congresspersons, beholden to corporate lobbyists, have peddled the false narrative that regulations restrict freedoms and prevent businesses from succeeding. Warren asserted that the opposite is true. In fact, regulations create more freedom and safety by “allowing us to get what we’re promised, keeping thieves out of our pockets, and leveling the playing field for everyone competing for our business.”

Knowledge is power, but not enough people know about this threat to public protections. So, please share this guide released in conjunction with the event that outlines all of the ways that the Trump administration is at attacking government regulations. With enough voices weighing in, we will ultimately win the war against regulations, and protect the government’s power to safeguard the people.

Edited by: Sophia Autor

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Reflecting on an Internship with Public Citizen

For the past ten weeks I have been living in Washington, DC and working as an intern at Public Citizen. I applied to my school’s “Spring Term in DC” program after starting to go stir-crazy on a 2200-person campus and thinking that, as a political science major, it might be a good idea to spend some time in the nation’s capital to see if it was a place where I might want to live and work in the future. My interest in domestic policy and desire to learn about nonprofit government work drew me to Public Citizen. So, at the the beginning of April I packed my newly-purchased blazer and came down to DC.

Getting off the metro on the first day of my internship and seeing that the Capitol building was mere minutes away from my office was surreal. Reading the news or talking about politics in my classes in upstate New York can often create a sense of removal from the fact that there are real people in Washington, DC making the decisions about which the rest of us read and talk endlessly. Now, with Public Citizen’s Congress Watch department, I would be researching and writing about people who were hard at work just a few feet away from me. Being so close to the political action made me appreciate the sheer volume of work that happens in this city each and every day.

My experience as an intern at Public Citizen has been extremely rewarding. Speaking to anyone in the office, I have been so impressed by how knowledgeable and passionate they are about their respective areas of work. More than anything, this has been an incredible learning experience for me. Each week I wrote a blog post and I was often presented with topics about which I initially knew only the basic facts. Doing extensive research not only gave me the authority needed to write an informative blog, but gave me a clearer overall picture of the many issues being juggled by the government on any given day. I felt as though I learned something completely new each week and being around my coworkers inspired me to work hard in becoming as well-informed as they are.

Being a part of this organization also gave me a heightened appreciation of the need to fight on behalf of consumers and the ways in which we can be successful at doing that. I participated in a rally outside of a gas station to blame Trump for high gas prices and helped with drafts of letters to the editor that members of Public Citizen could send to their local papers. At the same time, I was surrounded by people doing research to craft in-depth reports that would make new knowledge available to the public. This convergence of professional and grassroots work was inspiring to see. Even as I learned about the challenges we are facing in the government every day, I also saw my coworkers and motivated citizens working hard to make their voices heard. Public Citizen and its members have given me confidence that there will always be someone willing to fight on behalf of the American people.

Of course, being in Washington also gave me opportunities that would not have been possible in other cities. Having lived in Massachusetts my whole life, I was very excited to be part of a consumer lobbyist group that met with Representatives Richard Neal, Joe Kennedy, and Jim McGovern, and to sit in the second row as Senator Elizabeth Warren delivered a powerful speech about the importance of regulations. Not only did I get to brag to my politically-minded friends and send some cool pictures to my parents, but I got a chance to speak to and hear from the members of government who affect my hometown the most. These were experiences I never could have had sitting in a classroom.

When I applied to come to DC and when I interviewed for this internship, I said that I wanted to learn about what working in politics could mean outside of running for office or working on the Hill. Being in the city and interning at Public Citizen have shown me just how much political involvement exists outside those two realms and how crucial that involvement is. While I may not have figured out a definite career trajectory for when I graduate in a couple of years, this experience has given me the drive to be a vocal advocate for causes about which I am passionate. It is easy to feel overwhelmed by everything going on in our country, but my time here has inspired me to continue educating myself and working to create meaningful change within the government. I hope that in the future I will be able to return to DC and have as positive an experience as the one I have had in these ten short weeks.

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Undoing Financial Regulations Piece by Piece

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Five agencies have now voted to approve proposed changes to the Volcker Rule, a part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposed changes would shift some supervision away from regulators and towards banks. In a time when Trump’s political appointees are doing their best to reverse financial safeguards and aid big banks, slackening the power of regulators is a step in the wrong direction.

The Volcker Rule was enacted in response to the 2008 financial crisis and prohibits proprietary trading, a practice in which banks use depositors’ money to trade for the profit of the bank, rather than for the benefit of consumers or for the purposes of hedging other bets. This type of risky trading contributed to the financial crisis and, because the government guarantees repayment on deposits even if the bank fails, taxpayers were forced to subsidize this behavior. Under the current Volcker Rule, banks must prove to regulators that all trading positions are held in order to support customers or hedge other investments.

The newly proposed, scaled-back version of the Volcker Rule would give much more power of oversight to the banks themselves. Among the changes proposed is a shift that would mean that banks no longer bear the legal burden of proving that a trade is acceptable. Instead, it is regulators that will have to prove that a trade is not allowable. In addition, the current rule assumes that any trades held for fewer than 60 days are proprietary trades. The newly proposed rule does away with this assumption. Banks would also be divided into three categories under the proposed rule, based on the value of their trading assets and liabilities. Banks with trading assets and liabilities exceeding $10 billion would be subject to the strictest regulations, while banks with under $1 billion in assets and liabilities would be presumed compliant.

Wall Street has frequently complained that the Volcker Rule is too hard to comply with and argues it is harmful to the proper functioning of financial markets. The proposed changes are therefore said to create more clarity and leeway for banks in complying with the rule, though given the record profits of banks, it’s clear they have not been suffering. In reality, the proposed Volcker Rule changes are part of a wider effort to tear down the consumer financial safeguards that were put into place through the Dodd-Frank law. Though the proposed new version of the Volcker Rule maintains restrictions on proprietary trading and does not leave this banking activity unregulated, when viewed in the context of other deregulatory measures under the Trump administration, the proposed rule helps to leave the banking industry vulnerable to another disaster.

If the Volcker Rule is so difficult for banks to comply with, as they argue, our nation’s leaders should reinstate Glass-Steagall’s solid wall between commercial and investment banking. Trump has said that he is in favor of a return to the Glass-Steagall law, which provided a complete prohibition on investing with depositors’ funds, and was repealed in 1999.

Despite Trump and the Republican Party’s support for Glass-Steagall, we have not seen Congress or the Administration move in this direction. Instead, Trump has continually given key positions to industry insiders who are willing to work in support of big banks. This favorable climate in Washington has, in turn, emboldened banks to push for a deregulatory agenda, such as the current push to weaken the Volcker Rule.

Rather than giving more leeway to banks to gamble with taxpayer-insured deposits, there should be increased enforcement of the Volcker Rule as it currently stands. And, as mentioned, the ultimate solution would be to reinstate a modernized Glass-Steagall to supersede the more limited prohibition provided through the Volcker Rule.

Fed regulatory chief Randal Quarles has said, “I view this proposal as an important milestone in comprehensive Volcker Rule reform, but not the completion of our work.” This statement makes it seem likely that there will be future proposals which have the potential to go further in deregulating risky trading by big banks. The original Volcker Rule proposal was developed jointly by multiple agencies, all of which have now approved the proposed changes to weaken it. The proposal must still go through a public comment period, meaning that the changes will not be enacted right away.

The creation of Federal Deposit Insurance Corporation to protect bank customers’ deposits went hand-in-hand with a prohibition on gambling with those same deposits. It’s time to go back to that clearer, simpler rule. We need a government focused on protecting taxpayers from future bailouts rather than on opening the door to Wall Street banks to reengage in the sorts of risky activities that make another financial crisis more likely.

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A Good Plan for a Better Deal

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On May 21, congressional Democrats unveiled a new plan entitled “A Better Deal for Our Democracy: Fixing Our Broken Political System and Returning to a Government Of, By and For the People.” With focuses on voting rights and access, campaign finance, and ending pay-to-play politics, this plan has the potential to begin cleaning up the corruption that is, unfortunately, deeply embedded in current American politics.

The plan is very much in line with reforms that we at Public Citizen and millions of other advocates for transparent, ethical government across America have been calling for decades, including amidst the flurry of ethical violations of the current administration. As Lisa Gilbert, vice president of legislative affairs at Public Citizen has said, “If this package passes, cronyism, corruption and far too much special interest money in our system will no longer be the norm.”

While many of the failings in our democracy predate the Trump administration, this president’s brazen disregard for government ethics has energized public interest in democracy reform. After almost a year and a half of the administration, the Democrats are seizing on this wave of energy by naming what we’ve seen so far as the “most corrupt administration in modern times.” And, it is true that corruption has seemed to be the name of the game in Washington recently. Acting Director of the Consumer Financial Protection Bureau, Mick Mulvaney, has openly admitted that his former congressional office operated on a pay-to-play policy. Trump’s personal lawyer, Michael Cohen, was revealed to have ties to Fortune 500 companies, a Russian oligarch, and the Ukrainian government. It is becoming clearer all the time that many Trump administration insiders have secretive, unethical, and potentially illegal financial ties to corporate entities. That money has no place in politics, and Democrats are showing that they are ready to take aggressive steps to correct this.

The first step to purging corruption from Washington is to ensure that our leaders are chosen by the people, which is why voter reform is one of the key pillars of the Democrats’ new plan. This includes measures such as automatic voter registration and redistricting reform to end gerrymandering. The 2016 election yielded low voter turnout and low trust in the electoral system, not to mention the added concern of foreign meddling in American elections. Still, voting remains the foundation of the American democracy and the people’s voices need to be represented by selecting their elected leaders. The proposed voting reforms will help to strengthen this cornerstone of democracy and restore trust in the electoral system.

In addition to strengthening the process for putting people in office, the Democrats are proposing to tighten regulations on officials once they hold positions, both in the legislative and executive branches, and on both sides of the aisle. With regards to the executive branch, Democrats have honed in on Trump’s campaign promise to “drain the swamp” and his complete failure to do so when appointing members of his Cabinet, who exhibit unprecedented conflicts of interest. For both members of the cabinet and members of Congress, Democrats are proposing to tighten rules around lobbying and to make campaign finance more transparent. Clamping down on the ability of corporations to buy influence helps shift the government back into the hands of the people.

The plan also addresses the conflicts of interest that have resulted from revolving door issues, particularly under the Trump administration. Public Citizen found in March that more than 75 Trump administration lawyers had previously represented companies with business before the government or had previously worked in a field that they now oversee, creating a great deal of revolving door concerns. A proposal within the new plan would help combat this issue by prohibiting former lobbyists from taking on cabinet positions that would give them oversight of industries in which they were previously employed. This restriction would ensure that cabinet members are working for the good of the American people, not the good of those who put money in their pockets.

One concrete way in which the plan proposes to do this is by strengthening the Office of Government Ethics (OGE). As of now, the OGE has the ability to identify violations of ethics laws pertaining to conflicts of interest within the executive branch, but it does not have the ability to enforce compliance. Legislation under this new plan would give the agency that power of enforcement. With American citizens losing trust in individual elected and appointed officials, the strengthening of government oversight agencies is more important than ever. The new legislation will, as Public Citizen’s Craig Holman said, “put an ethics cop back on the beat” and therefore restore faith in an ethical government.

The issues of corruption and corporate money in politics date back to long before Trump took control of the White House. The Citizens United v. FEC case was decided in 2010, and the unsavory role of corporate influence on our democracy dates can be traced to long before that. Understanding how damaging that Supreme Court case has been, allowing untold amounts of secret money to flood our elections, it was especially heartening to see that the Democrat’s plan also included a call for an amendment to overturn Citizens United, something that Public Citizen’s Democracy Is For People campaign has been working hard to achieve for many years .

“The Better Deal for Our Democracy” plan gives us reasons to be optimistic that change might be coming in the near future, It is long past time for the country’s democracy to be rescued and for the American people to be able to place their trust in their government once again.

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On Consumer Lobby Day, Public Citizen Partners With Citizen Advocates to Press Congress for Consumer Protections

Last week on May 9, more than 110 consumer advocates from 36 states around the nation gathered on Capitol Hill for the second annual Consumer Lobby Day coordinated by Public Citizen, Consumer Federation of America, Americans for Financial Reform, Consumer Action, Consumers Union, The Institute for College Access & Success, National Association of Consumer Advocates, National Consumer Law Center, National Consumers League, and U.S. PIRG.

On lobby Day, consumer advocates from around the nation, including several Public Citizen members and supporters, met with staff of the Senators and Representatives from their states to urge them to support consumer protections in Congress and to oppose any rolling back of existing financial reforms. The goal of the event was to ensure that consumer voices from across the country were heard loud and clear in Washington to help counteract the outsized influence of bank lobbyists that swarm Capitol Hill.

The two-day event kicked off at the Thurgood Marshall Center Trust where advocates learned from experts in the field and former and current staffers for Hill offices and administrative agencies about best practices in lobbying elected representatives and the importance of lawmakers hearing directly from their constituents. One of the major themes that was woven through all of the panels was the importance of personal storytelling and forming real-life connections to otherwise obscure policy issues. While facts and figures about consumer protection are useful, it is the stories of real constituents who have suffered from financial issues due to bank wrongdoing, predatory lending, or harmful debt collection activities that really drive our officials to make change.

The community advocates teamed up with national representatives from the organizations co-sponsoring the event to plan their individual state-based approaches for the lobby meetings and to help incorporate the tips they’d learned from the lobbying pros. The advocates wrapped up their evening with a meaningful discussion of the history of the consumer movement and what lessons consumers should be taking from past movements to create favorable change today.

The group of state advocates reconvened on May 9 in the Kennedy Caucus Room of the Russell Senate Office Building. There, they were joined by Senator Sherrod Brown of Ohio and Senator Catherine Cortez Masto of Nevada who spoke about their own commitments to consumer protections. Both Senators emphasized their strong connections to their constituents back home, reaffirming the points that had been made at the training session about the importance of hearing personal stories. Senator Brown is a Ranking Member of the Committee on Banking, Housing, and Urban Affairs, a committee on which Senator Cortez Masto also serves. As such, they have both fought for consumer protections and against the current deregulatory tactics of the Consumer Financial Protection Bureau (CFPB) under acting director Mick Mulvaney. Armed with the support of these two Senators, the state-based teams of advocates set out around the Capitol for their meetings.

There were three main subject areas on which advocates focused in their meetings:

  1. Preserving the CFPB’s payday lending rule: The advocates spoke out about the harms of predatory lending and the importance of the CFPB rule that requires lenders to assess whether a borrower is able to repay a short-term loan before the loan is granted. Although this seems like a commonsense rule, it has been under attack in Congress. Luckily, thanks to the work of the advocates to defend the rule, we held off a vote to overturn the payday rule and the timeline for possible overturn of the rule expired this week.
  2. Maintaining a strong and independent CFPB: Advocates stressed to their senators and representatives how much having a strong and independent CFPB does to protect constituents and expressed their discontent with the temporary acting director, Mick Mulvaney. The appointment of a permanent CFPB Director who is committed to the mandate of the Bureau was one of the requests made by advocates as well as preserving its single-director structure and independent source of funding from the Federal Reserve. Advocates also stressed the need for the CFPB to keep its database of consumer complaints against companies public and transparent.
  3. Opposing anti-consumer measures like S. 2155, nicknamed the “Bank Lobbyist Act,” which would undermine existing financial reforms put in place through the Dodd-Frank Act: Advocates spoke to the dangers of causing another crash and subsequent taxpayer bailout since communities across the country are still suffering from the 2008 crash and its aftermath. Other threats were also highlighted, such as attempts to gut protections from students at for-profit colleges that don’t deliver quality education and lead to defaulted loans; to weaken Fair Debt Collection Practices Act protections; to remove banks from CFPB oversight, and other current attempts to roll back consumer financial protections.

With more than 200 meetings taking place on the Hill in one day, the message that consumers want stronger, not weaker financial protections was heard all through the halls of Congress. While substantive change can be slow in coming, nothing puts the feet of our elected officials to the fire better than hearing directly from the constituents they represent.

Now more than ever, with consumer protections under attack from all sides, it is of the utmost importance for all Americans to step up their activism. The impressive turnout and success of Consumer Lobby Day was a strong step forward in the fight to protect consumer rights, both within Washington and across the country, but to really win these fights we need YOU to get involved! For example, the House will vote on the Bank Lobbyist Act in just a few days. Take the time to call your representative and urge them to vote against the Dodd-Frank rollback and ask them to tweet about their opposition to the bill using #BankLobbyistAct.

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