President Obama Continues to Push Hard for Financial Reform

President Obama is making financial reform legislation a large priority. As you'll see below, he made it the topic of today's weekly radio address. He did the same on March 20.

Battle Over D.C. Soda Tax Heats Up

A couple weeks ago I blogged about a far-reaching school nutrition proposal expected to pass the District of Columbia Council and a controversial plan to pay for its implementation with a 1-cent-per-ounce tax on soda.  (The tax would be imposed on soda that contains sugar; diet soda would be exempt.)  Well ... the nutrition proposal has passed, but the soda industry is, as explained in today's Washington Post, mounting an expensive lobbying and media campaign against the soda tax.  The sponsor of the tax, D.C. Council Member Mary Cheh, worries that her colleagues will be intimidated: "It is hard to fight against a multimillion dollar PR effort from big soda. If people are not fully attuned and fully aware, they can get scared easily. I am worried my colleagues are not going to go beneath the surface."  According to the Post, Ellen Valentino, the executive vice president of the the Maryland-D.C.-Delaware Beverage Association, "denied Cheh's assertion that her organization is spending millions on the campaign. But Valentino added that the group plans to spend 'whatever it takes to get the message out.'" Mike Jacobson, head of the D.C.-based Center for Science in the Public Interest, supports the tax, noting that "[s]oda consumption in the District is fueling an expensive epidemic of diet-related diseases. A modest tax on this nutritionally worthless, disease-promoting product would give our seniors and children greater access to fresh fruits, vegetables and other health-promoting foods."

Media Coverage of the Battle Between Auto Dealers and the Military Over the CFPA

The Times story is here and the Washington Post's coverage here.

Senate Passes Amendment to Financial Reform Legislation to Require Audit of Federal Reserve

Yesterday, the Senate passed 96 to zip an amendment written by Independent Senator Bernie Sanders of Vermont (pictured to the right) to require an audit of the Federal Reserve.  Senator Sanders's website describes the amendment and its passage as follows:

In a major victory for transparency at the Federal Reserve, the Senate Tuesday passed an amendment by Sen. Bernie Sanders to audit the Fed and make the central bank reveal which banks received more than $2 trillion in emergency aid during the financial crisis. “The Fed can no longer operate in virtual secrecy,” said Sanders. Under his amendment, the Government Accountability Office would conduct a top-to-bottom audit of all emergency actions by the Fed since the start of the financial crisis in 2007. The non-partisan research arm of Congress specifically would be directed to investigate apparent conflicts of interest involving the Fed and CEOs of the largest financial institutions in the country. In addition to the audit, the Fed for the first time would have to reveal by Dec. 1, 2010, the identities of banks and other financial institutions that took more than $2 trillion in nearly zero-interest loans.

The text of the amendment is here.

Taxes Are High and Getting Higher, Right? Nope. Just the Opposite.

Tax policy generally affects consumers a lot, yet this blog has paid little attention to it. A USA Today analysis has found that the combined federal, state, and local tax bite recently hit its lowest point since the Truman Administration. Maybe that's because our leaders preferred to fund a large war without the citizens' consent or because we have neglected public investment in transportation, communications, and education. Here's an excerpt of the relevant USA article:

Federal, state and local taxes — including income, property, sales and other taxes — consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.

Houlihan Smith’s Phony Invocation of Trademark Law Fails to Keep Criticism off the Web

by Paul Alan Levy

It’s an old story, sad to say.  Bank waltzes into court, represented by a big firm, decrying damage to its interests and demanding immediate relief, but giving no notice to the other side, and walks out with TRO issued by a credulous local judge, no questions asked.  Happily, a recent case involving an investment bank that got a TRO against a message board host, in violation of section 230 immunity, has a happier ending, because the bank ended up before a federal judge who understood the technical details better than the bank’s own lawyers.

Houlihan Smith Faces Online Criticism

This case involves Houlihan Smith & Co., a Chicago-based investment bank that apparently drums up new business by cold-calling companies to offer its services.  As a telemarketer, it has earned its share of criticisms on 800Notes and Whocallsme, a pair of message boards that present themselves as reverse look-up telephone directories whose contents are supplied by its users.  According to the run of comments on 800Notes and whocallsme, Houlihan’s telemarketing calls are taken by the executive secretaries or administrative assistants of the target companies who screen calls for the chief executives, and the callers manage to offend a goodly number of them.  Some of the comments go beyond a discussion of the callers’ manners and discuss Houlihan’s business model, including such hyperbolic terms as “scam,” “lying,” and “ripping off.”   A few posters have even asserted that some Houlihan staff have criminal records.   Houlihan Smith itself, as well as Duane Morris, one of its law firms, have participated in the debate on the message board.   One Houlihan poster used the pseudonym “Gordon Gecko, Investment Banker” in criticizing the critics.

Mike Konczal on Why Preemption of State Consumer Law is a Bad Idea

Here. It's an excellent summary of the argument.

More on the Progress of the Financial Reform Legislation in the Senate

Here.

Remember to Check Out the Financial Reform Scorecard

The Senate continues to vote on amendments from all sides on the financial reform legislation. Learn about each amendment and how each Senator voted, as U.S. PIRG's excellent scorecard begins to fill out.

Consumer and Privacy Advocates Ask the FTC to Go After Facebook

The Electronic Privacy Information Center and more than a dozen other consumer and privacy advocacy groups have filed a complaint with the Federal Trade Commission alleging that Facebook regularly violates its users privacy rights by providing users' personal information to third parties. The complaint claims that Facebook is committing a variety of unfair and deceptive acts and practices in violation of section 5 of the Federal Trade Commission Act and asks the FTC to force Facebook to clean up its act. The complaint is available here. The first two paragraphs of the complaint summarize the allegations:

This complaint concerns material changes to privacy settings made by Facebook, the largest social network service in the United States, that adversely impact the users of the service. Facebook now discloses personal information to the public that Facebook users previously restricted. Facebook now discloses personal information to third parties that Facebook users previously did not make available. These changes violate user expectations, diminish user privacy, and contradict Facebook’s own representations. These business practices are Unfair and Deceptive Trade Practices, subject to review by the Federal Trade Commission (the “Commission”) under section 5 of the Federal Trade Commission Act. The following business practices are unfair and deceptive under Section 5 of the Federal Trade Commission Act: Facebook disclosed users’ personal information to Microsoft, Yelp, and Pandora without first obtaining users’ consent; Facebook disclosed users’ information—including details concerning employment history, education, location, hometown, film preferences, music preferences, and reading preferences—to which users previously restricted access; and Facebook disclosed information to the public even when users elect to make that information available to friends only.

U.S. PIRG's Consumer Blog discusses the complaint here.