Consumer Law & Policy Blog

Senate Banking Committee to Vote on Kraninger Thursday to Head CFPB--Or Not

by Jeff Sovern

Here is a report by Kate Berry in the American Banker (behind paywall). A vote for her would be a vote for someone without experience in or any demonstrated knowledge of consumer law and for someone who professes to value transparency but who was not transparent during her confirmation hearings. 

UPDATE:  Evan Weinberger of Bloomberg/BNA says it "[l]ooks like it's getting delayed until they come back from recess."

The self-driving truck industry

I thought our readers might be interested in this article by Peter Holley, which does a short survey of the state of the self-driving truck industry. While explaining that Uber is getting out of the self-driving business for now, the article suggests that we can expect seeing driverless trucks pretty soon. One company is planning to make driverless deliveries by the end of this year. Another already has driven "an automated truck across the country without a driver, completing a 2,400-mile journey from California to Florida." 

Who gains from indexing capital gains to inflation and by how much?

As most of you likely know, Trump's Treasury Department has floated the idea of indexing capital gains to inflation, thereby reducing the tax due from owners of stocks and other investments when they sell those investments at a gain. (The administration has even suggested that this change could be done administratively, without congressional approval.) As this article by Christopher Ingraham explains, "[t]he change would allow investors to account for inflation in calculating how much they’ve profited off an investment, a change that would typically reduce the total amount of taxable profit." Ingraham refers to this Wharton school study showing that this change in law would overwhelming benefit the top 1/10th of 1% of U.S. earners (whose annual income would, on average, rise by 1%), while adding $102 billion to the deficit over the next ten years. Check out the table below, which shows, among other things, that that those in the top .1% in adjusted gross income would receive over 63% of the tax cut. On the other end of the spectrum, the lowest 80% of all earners would get just 1% of the tax cut.

Distributional effects of indexing capital gains to inflation, 2018

AGI percentile	Share of tax cut received	Percent change in after tax income	Share of federal tax burden
			Current law	Tax cut
0-20	0.0%	0.00%	0.2%	0.2%
20-40	0.0%	0.00%	0.9%	0.9%
40-60	0.1%	0.00%	5.8%	5.8%
60-80	0.9%	0.00%	16.5%	16.6%
80-90	1.5%	0.01%	15.9%	16.0%
90-95	2.5%	0.02%	13.0%	13.0%
95-99	8.9%	0.07%	19.1%	19.1%
99-99.9	23.0%	0.30%	15.0%	14.9%
99.9-100	63.1%	0.98%	13.6%	13.5%

 

"Consumer agency hated by Trump and GOP lawmakers has the backing of most Americans"

That's the name of this LA Times article by David Lazurus, which explains that Americans of all political stripes support a strong Consumer Financial Protection Bureau. A survey conducted for Americans for Financial Reform and the Center for Responsible Lending shows "that an overwhelming majority of Americans — at least 80% — are concerned about the Trump administration’s recent efforts to curb oversight of banks and payday lenders, and the possible shutdown of a database of consumer complaints." Lazarus notes that 

Significantly, the survey shows that support for the CFPB cuts across party lines, with majorities of Republicans and Democrats saying strong enforcement of financial rules affects them personally. Asked how important it is to regulate financial services and products, a staggering 91% say it’s important, including 69% who say it’s very important.That’s a sentiment shared by 85% of Republicans and 96% of Democrats.