Taking action

Following the compromise of consumer data from credit reporting bureau Equifax, Senator Elizabeth Warren (D-MA) and Senator Brian Schatz (D-HI) have introduced the Freedom From Equifax Exploitation (FFEE) Act.

This act aims to give consumers more rights more control over how credit agencies use their data.

The bill

The bill is available here, but here is a few of the bill’s highlights:

• Create a uniform, federal process for obtaining and lifting a credit freeze.
• Preventing credit reporting agencies from profiting off the use of consumer information for the duration of a credit freeze;
• Strengthening the fraud alert protection from 90 days to a one year, with a year renewable.
• In ID theft cases, a 7 year fraud alert is created.
• Require any credit reporting agency who charged a fee to freeze credit in response to the data breach to refund those fees,
• Allow for an additional free credit report (consumers already get one under the Fair Credit Reporting Act through annualcreditreport.com)

Freezing credit

The most important feature here is the removal of any fee to freeze your credit. Currently, agencies like Equifax charge nominal fees to freeze credit (anywhere from 3-10) dollars. If this bill passes – not only will that service be free, but it will restrict the way credit agencies use that information while the freeze is active.

The idea behind making this free also keeps credit companies, whom many believe are responsible for the security of credit information, from profiting off information breaches. Given that many financial advisors have advised those impacted to freeze their credit, this would be a benefit to consumers.

It is important to note here that Equifax has suspended the fees to freeze credit for the next month.

A credit freeze restricts access to your credit report. Simply put, it requires the credit agency to contact you first to ensure it was you who applied for credit, thus making it harder for you to apply for credit. You would need to unfreeze your account to apply for new credit. You must also freeze credit with each bureau, which can lead to some expenses as you must pay anytime to lift a freeze.

Remember: a credit freeze doesn’t impact current accounts or your credit score. If you apply for credit often, or open new accounts often, then a credit freeze may not be for you.

Lots of names

The bill has several original co-sponsors, including Senators Sanders, Franken, and Blumenthal. Companies like the National Consumer Law Center, Americans for Financial Reform, CREDO, and the Consumer Federation of America all have also endorsed the bill.

#CreditFreeze

We interrupt this regularly scheduled program

Huge news on the domestic policy front – per a Twitter announcement, President Trump’s two business advisory councils – the Strategic and Policy Forum and the Manufacturing Jobs Initiative – have been disbanded.

The sequence of events has been fast and difficult to follow, but here’s how things went down.

See ya later

On Monday, Kenneth C. Frazier, the CEO of pharmaceutical giant Merck, resigned from the Manufacturing Jobs Initiative in protest at President Trump’s comments on the recent violence in Charlottesville. By the evening of the same day, Brian Krzanich of Intel and Kevin Planck of Under Armour had done the same. They were quickly followed by Thea Lee and Richard Trumka of the AFL-CIO, Scott Paul of the Alliance of American Manufacturing, Denise Morrison of Campbell Soup and Inge Thulin of 3M.

This morning, in response to the sudden exodus, Stephen Schwartzman, chief executive of the Blackstone Group and longtime Trump business and political ally, led a conference call of the remaining council members this morning to debate how to proceed.

By the end, all members had resigned.

In short, President Trump is not disbanding his advisory councils in the sense of (no “The Apprentice” jokes, please) firing their members. The members already quit. The President’s Tweet simply announced that had taken place, and that, as it states he “disbanded” the now-vacant groups, there are presumably no plans in the near future to replace them.

Bold move

This is a surprising move from the President. Historically the role of business advisory councils has been to keep an open communication pipeline between the President and the American business community, something this president has consistently identified as a priority. President Trump has always positioned himself as passionately pro-business, particularly concerned with global competitiveness and the loss of jobs and revenue in American manufacturing.

The Strategic and Policy Forum and the Manufacturing Jobs Initiative were founded specifically to address those issues.

The business community in particular had expected the President to draw heavily on their advice.

On the other hand, that advice has repeatedly conflicted with the President’s other policies. Well before Charlottesville, the Strategic and Policy Forum had seen high-profile resignations: Bob Iger of Disney and Elon Musk of Tesla (who served on, and resigned from, both the SPF and the Manufacturing Jobs Initiative) resigned over the President’s withdrawal from the Paris Climate Accord, and ex-CEO of Uber Travis Kalanick departed over restrictions on immigration from the Middle East.

New directions

President Trump’s elimination of his business advisory councils clearly indicates a new direction in the relationship between the White House and the American business community.

What that direction will be, and what consequences it will have for the economy, remain to be seen.

#ByeByeBusiness

Same story, different day

Big banks have won again, as they and other financial institutions continue to restrict consumer rights all in the name of “choice.” Well, choice for the companies that is.

The GOP controlled House just voted to introduce a Congressional Review Act Resolution that if passed by the Senate, will make it harder for consumers to have their day in court.

Bump the consumers, right?

The Resolution would overturn rules from the Consumer Financial Protection Bureau (CFPB) aimed at protecting consumer rights and keep financial institutions – like banks, credit card companies, and loan services – in check.

The rules center on the forced arbitration clause that is hidden among many contracts.

This clause allows consumers and companies the chance to settle issues behind closed doors without going through the legal system. That doesn’t sound too harsh at first glance, right? Well, of course there are a few caveats that allow the pendulum to swing in favor of financial companies.

Like the fact that there are no public records of these arbitrations, even if the company was found at fault.

Also, that consumers can choose between arbitration and the court system unless the company wants arbitration, then the choice is gone. Most importantly, forced arbitration severely limits class action lawsuits, which results in a lot less individual suits.

Wall Street wins again

Many bank-backed House representatives argued that class action lawsuits only result in a miniscule payout for consumers.

This may be true, but it is a smaller amount for a lot more people.

This means the company pays a larger amount to more mistreated consumers overall. House Democrats, none of which voted in favor of the Resolution, feel that this is another way for Wall Street to benefit from their ties to lawmakers. Without a chance to go to court, consumers are deprived of their rights simply by signing a contract.

There’s still hope

Consumers still have a chance if the Resolution is rejected by Congress. It will be more of a debate, since it would only take two opposing votes from the GOP side to reject it. Hopefully they will consider who the CFPB rules protect.

No consumers have raised issues to repeal them. It is a wish from the financial companies they have affected, and unfortunately their wish just may come true.

#RestrictingRights