Campaign News

New York's Department of Financial Services is seeking information from Goldman Sachs Group Inc., BNP Paribas SA, Canadian Imperial Bank of Commerce and Standard Chartered Plc on shell companies established through a law firm in Panama, Bloomberg News reported Wednesday. The investigation came after the Panama Papers leak about global banks using law firm Moasack Fonseca & Co. to set up anonymous shell companies. The data behind the leaks was made public this week by the International Consortium of Investigative Journalists.

The massive leak put a spotlight on the possible use of shell companies for tax evasion and other purposes. The White House's Office of Management and Budget accepted the final review of a FinCEN Treasury rule last month that would require banks to identify owners of shell companies.

Rick Aragon, AML compliance manager at LexisNexis Risk Solutions, said in an interview that the rule will increase compliance costs and complexity for banks. The new obligation for banks to identify and verify beneficial owners will affect system processes and could ultimately impact the risk profile of banks, he said.

"There's all sorts of different downstream processes that are going to be impacted by this," he said.

While offshore accounts are already considered high-risk, the publicity of the accounts will cause banks to re-evaluate whether or not they want to take on this type of business, he added.

The House Science, Space, and Technology's Oversight Subcommittee is investigating the FDIC's slowness to report data breaches that were later deemed as posing a major cybersercurity risk. The FDIC has reported seven security breaches since October 2015, all related to employees leaving the agency and downloading data on personal external devices. Lawrence Gross, chief information officer and chief privacy officer at the FDIC, testified at a May 12 hearing that the agency has taken steps to mitigate further breaches, but Rep. Barry Loudermilk, R-Ga., said he does not think the agency is taking the breaches seriously.

Democratic presidential candidate Hilary Clinton said she supports increasing diversity at the Federal Reserve and removing bankers from the board of directors, The Washington Post reported Thursday. Her comments were made in response to a letter from 127 legislators, including Elizabeth Warren and Bernie Sanders, asking Chair Janet Yellen to improve leadership diversity. "As the Board of Governors embarks on its search for regional bank directors to serve beginning in 2017, and as you consider future regional president vacancies, we urge you to engage in an inclusive process to consider candidates from a diverse set of backgrounds, including a greater number of African-Americans, Latinos, Asian Pacific Americans, women, and individuals from labor, consumer, and community organizations," the lawmakers wrote. The group cited a Center for Popular Democracy study that found 83% of Fed head office board members are white and three-fourths of regional bank directors are male.

Chatter:

The argument between JPMorgan Chase & Co. Chairman, President and CEO Jamie Dimon and Independent Community Bankers of America President Camden Fine heated up this week after Dimon called Fine a "jerk" on CNBC. Fine retorted that Dimon's language was that of a junior high-schooler.

Dimon's comments were made in response to statement Fine made April 9. "Just because Jamie Dimon says 'let's sing kumbaya' doesn't mean community banks are going to just line-up like a Greek chorus," Fine said in response to an op-ed Dimon wrote, calling banks of all sizes to unite.

Legislation/regulation:

The Office of Financial Research outlined best practices for data collection by regulators, including the agencies composing the Financial Stability Oversight Council. Among common pitfalls it pointed out in regulatory data collection were a failure to use existing industry standards, missing or incomplete data requirements, inadequate instructions and preparation, and a lack of resources to support institutions reporting the data.

The OFR suggested more collaboration among data collectors and noted that regulators' collection processes should be designed to be comprehensive and attentive to detail while also having a foundation of simplicity.

The OFR also released a study in which it compared the reported credit standards in the Fed's senior loan officer opinion survey to Home Mortgage Disclosure Act data. It found that the survey results have "the expected relationships" with actual denial rates at banks and economic conditions such as delinquency rates and home prices in MSAs where credit tightening occurs.

The House Financial Services Committee could soon introduce a bill that would provide regulatory relief for community banks if they meet a certain capital threshold. Rep. Steve Stivers, R-Ohio, said in an interview Wednesday that the bill would also include a dual mandate for the Consumer Financial Protection Bureau to protect consumers and encourage access to credit.

The Treasury Department wants to work with Congress to pass legislation overseeing and providing protection for borrowers in the marketplace lending industry. In a white paper reviewing the industry, the Treasury stated that to ensure market soundness prudent loan underwriting, securitization transaction pricing, and robust governance and disclosures are necessary. The paper also recommended that online lenders should promote a transparent marketplace for borrowers and investors, ensure safe and affordable credit through partnerships, and support robust and effective oversight.

By Moriah Costa

Source

Newsy spoke with Anand Subramanian, the associate director of PolicyLink. Together with the Center for Popular Democracy, PolicyLink published a report with recommendations on how communities can improve the way their local police force operates.

Collect more data:

"Police departments need to collect data that's broken down by race, by gender, etc., on who they're stopping, why they're stopping them, whether they were searched, whether there was consent for the search and whether any contraband was found," Subramanian said. "By collecting and publishing that data, communities can really assess whether there are racial disparities or not."

Ban biased policing:

"Every police department should have a policy prohibiting racial profiling and prohibiting biased policing. It allows departments to hold officers accountable if they've been found to engage in biased policing."

Get independent oversight:

"A lot of communities are advocating for policies that institute an independent body that has oversight over the department's policies — an audit function to make sure that the department is complying with its policies, that the policies are up to par and that the department is actually holding its officers accountable for misconduct."

Decriminalize low-level offenses:

"Another area that community advocates may want to look at is decriminalizing certain laws in their community. A lot of times, specific laws tend to be applied in a biased way. One good example of that are so-called status laws like loitering or spitting. But what you find in those communities, if those laws are ever applied, they're only applied in communities of color or vastly disproportionately in communities of color."

Don't fine people for being poor:

"Communities should really take a look at whether there are laws on the books that make it illegal for someone to not pay a fine. So we saw this in Ferguson where the DOJ went to investigate, and what they found was that the city government was really run on the backs of poor people. You may not even know that people are sitting in jail for being too poor to pay a traffic fine, for instance. And so we really urge communities to identify those laws and really advocate for their communities to change those laws."

Enforce the Fourth Amendment:

"A lot of times, police officers will ask someone they stopped whether they consent to a search. What we're finding is that a lot of times what is seen as consent may not actually be true consent. It may be that they don't want to give consent, but they feel scared or frightened, so they give consent under duress. In any case where someone being stopped by a police officer has a right, that right should be expressly shared by the police officer."

Editor's note: Anand Subramanian's interview has been condensed for length

By KATE GRUMKE

Source

03.16.2016

Today, the FOMC announced that it will not be raising interest rates this month, which is a good thing. But at the same time, via its dot plot, the committee showed consensus in favor of raising interest rates during 2016. Today’s projections threaten employment and salaries for working families, particular from Black and Latino communities, and will bring real harm if they come to pass. Last week, low-income people of color across the country took the unprecedented step of flyering outside their regional Fed banks before the regional presidents traveled to DC for the FOMC meeting, urging them to “Connect the Dots” and not predict rate hikes in 2016 on their dot plots.

Dushaw Hockett, executive director of SPACEs, a community-based organization in Washington, DC that is part of the Fed Up Coalition, released the following statement in response to the FOMC announcement:

“Over the past seven years, the Fed has repeatedly over-estimated the health of the economy and over-estimated the likelihood of rate hikes – and that has only served to make the recovery weaker.[1] This month’s dot plot prediction is more of the same: once again the Fed is ignoring the real signs of weakness in the economy, particularly for Black and Latino communities, who haven’t had a recovery at all.

“The Fed needs to connect the dots with reality: involuntary part-time work is still almost double pre-recession levels, labor force participation rates are still low, Black unemployment is more than double white unemployment and Latino unemployment and underemployment is still at crisis levels, and wage growth is almost non-existent. A dot plot that ignores these realities actually slows down the economy by tightening credit markets. Recent data shows that there is plenty of room for the economy to grow. Rather than slowing down progress, the Fed should do all it can to facilitate growth in 2016 and beyond.”

# # #

www.populardemocracy.org  

The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda.   www.whatrecovery.com Fed Up is a coalition of community organizations and labor unions across the country, campaigning for the Federal Reserve to adopt pro-worker policies for the rest of us. The Fed can keep interest rates low, give the economy a fair chance to recover, and prioritize full employment and rising wages.    

Press Contact: Anita Jain, ajain@populardemocracy.org, 347-636-9761  

[1] See Ylan Mui, The economy never seems to be as good as the Fed thinks it will be, Washington Post (Sept. 15, 2015) and Narayana Kocherlakota, Dovish Actions Require Dovish Talk (To Be Effective), Blog Post (Feb. 4, 2016).

NY Daily News - December 2, 2013, by Phyllis Furman - Coalition urges city to change its relationship with banks as a way to address income inequality.

Wall Street has put the squeeze on the city to the tune of $1 billion, a report due out Tuesday claims.

As much as $723 million worth of unnecessary fees and bad deals, coupled with $300 million in bank subsidies should be rejiggered, says a study from a new left-leaning coalition called New Day, New York Coalition.

"New York City could be saving $1 billion annually just by changing the way it does business with Wall Street," one of the report's authors, Connie Razza, director of strategic research initiatives at the Center for Popular Democracy, told the Daily News.

The study, dubbed "Leveraging New York's Financial Power to Combat Inequality," kicks off a week of events organized by the group, culminating in a rally set for Thursday at Foley Square.

The coalition, whose members include veterans of Occupy Wall Street, labor unions such as 1199SEIU, and faith organizations, says its goal is to "draw attention to the ways Wall Street and big corporations continue to siphon resources away from average New Yorkers and point toward solutions that would help reduce inequality and build economic fairness."

Mirroring a key campaign theme of Mayor-elect Bill de Blasio, the report notes the huge disparity between the city's haves and have-nots, with the 1% controlling a whopping 40% of the city's income.

The city and its pension funds have tremendous leverage that can be used to bridge the gap, the study says: $350 billion that travels through the financial system.

"We should be using that leverage to demand a different relationship" with Wall Street, Razza said.

Among the key findings: the city, its pension funds and the MTA pay $563 million in Wall Street fees each year.

Rather than pay out megabucks to Wall Street big shots, the city should set up an in-house group to manage its pension assets and bond offerings, the report recommends.

That suggestion comes on the heels of a recent city report that showed fees paid by New York City pension funds surged by 28% to $472.5 million in the year ended June 30.

The idea of bringing the management of the city's money in-house isn't new.

New York's former chief investment officer, Larry Schloss, recommended just that before he recently stepped down. A number of public pension funds in Canada, including Ontario's $126 billion teachers' pension fund, have already moved in that direction.

But achieving that goal here is a long shot, said Leo Kolivakis, publisher of Pension Pulse Blog.

"Attracting and retaining qualified managers to manage money in-house is a huge challenge," Kolivakis told the News.

Patrick Muncie, a spokesman for Mayor Bloomberg, noted the financial services industry's crucial contributions to the local economy.

"The financial services sector is a critical driver of New York City's economy, providing more than 400,000 jobs and generating $3 billion in tax revenue last year alone," he said.

A spokesman for outgoing New York City Comptroller John Liu said the report encapsulates many of the comptroller's efforts, including "better and more cost-effective in-house management of pension assets."

The report "effectively and succinctly aggregates the real underlying issues of deepening inequality," Liu said in a statement.

Reps for de Blasio and incoming New York City Comptroller Scott Stringer, declined to comment.

Other recommendations of the report include holding banks to firm commitments to improve the community in exchange for the $300 million a year they receive in subsidies.

pfurman@nydailynews.com

What they want:

*Renegotiate financial deals to save up to $725 million each year

*Hold banks to commitments in exchange for $300 million in subsidies

*Banks should write down underwater mortgages to keep 86,000 families in their homes