CPD IN THE NEWS

Andrew Levin, professor at Dartmouth College and former special adviser to former Federal Reserve Chair Ben Bernanke and then-Vice Chair Janet Yellen, released a proposal for reform of the Federal Reserve Board's governing structure in a press call sponsored by the Fed Up campaign. The proposal has a number of important features, but the main point is to make the Fed more accountable to democratically elected officials and to reduce the power of the banking industry in monetary policy.

Under its current structure, the banks largely control the 12 Federal Reserve district banks. This matters because the presidents of these banks are part of the Federal Reserve Board's Open Market Committee (FOMC) which determines monetary policy. At any point in time, five of 12 district bank presidents will be voting members of the FOMC, but all 12 take part in the discussion. The voting presidents will typically be outnumbered by the seven Federal Reserve Board governors, who are appointed by the president and approved by the Senate, although there have been just five sitting governors for the last two years, as the Senate has refused to consider President Obama's nominees.

There is no obvious reason why the banking industry should have special input into the country's monetary policy. This would be comparable to reserving seats on the Federal Communications Commission's board for the cable television industry. While there is no way to prevent an industry group from trying to influence a government regulatory body, in all other cases, they at least must do so from the outside. It is only the Fed where we allow the most directly affected industry group to actually have a direct voice in the policies determined by its regulatory agency.

This is an especially important issue because the Fed's policies are so central to the health of the economy. If the Fed's fears over inflation lead it to raise interest rates to slow the economy and reduce the rate of job creation, there is little that Congress will be able to do to counteract the Fed's actions. For example, if the Fed wants to prevent the unemployment rate from getting below 4.5 percent unemployment, there will be little that Congress and the president can do to get unemployment lower. In that case, the Fed may have needlessly be keeping millions of people out work — disproportionately affecting minorities and less-educated workers — because of a possibly mistaken view of the economy's limits. Furthermore, by deliberately weakening the labor market, the Fed will be keeping tens of millions of workers from having the bargaining power they need to secure wage gains.

While governors who are appointed by democratically elected officials are likely to recognize the importance of reducing unemployment and balance it against the risk of inflation, the district bank presidents are likely to be less concerned about unemployment. It is worth noting that all the dissenting votes calling for more a hawkish stance since the start of the Great Recession have been cast by bank presidents. It is likely that the need to maintain the support of the bank presidents on the FOMC has prevented the Fed from being more aggressive in trying to stimulate the economy and reduce unemployment.

It would be good to see the presidential candidates address the proposal put forward by Levin and the Fed Up campaign. There are very few areas of government that are more important in people's daily lives than the Fed's monetary policy. It literally determines how many people will hold jobs and has a huge effect on workers' wages.

While it would not be appropriate for the president or other politicians to try to micromanage monetary policy, they certainly should be setting its general course. This is analogous to the relationship with the Food and Drug Administration (FDA). No one expects Congress or the president to decide which drugs get approved; however, if the FDA were to allow two years to pass in which it approved no new drugs, it would be entirely appropriate for Congress and the president to question its conduct. The same would apply if the FDA were found to regularly approve drugs that turned out to be harmful.

In the case of the Fed, it is appropriate for the presidential candidates to be telling voters what sort of people they would appoint to the Fed. It is also appropriate for them to comment on its governance structure, which can only be changed by an Act of Congress, which would have to be signed by the president.

Baker is co-director of the Center for Economic and Policy Research (CEPR).

By Dean Baker, contributor

Source

Pressure mounted on Wells Fargo & Co. Friday following its fake-accounts scandal, as the bank faced new calls to allow affected customers to file lawsuits and for the board of directors to rescind the pay of a key senior executive.

The demands came just one day after Chief Executive John Stumpf resigned from a Federal Reserve advisory panel.

Senators had pushed for Stumpf not to be reappointed, saying it was inappropriate for someone who presided over improper sales tactics to be giving advice to an agency involved with bank regulation.

Stumpf has been under intense fire since the bank this month agreed to pay $185 million to settle investigations by Los Angeles City Atty. Mike Feuer, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency into an aggressive sales culture that led bank employees to open as many as 2 million accounts that customers didn’t authorize.

The Justice Department is investigating possible criminal charges, and some senators have called for a Labor Department investigation into whether the bank failed to pay employees overtime when they worked late nights and weekend to meet sales quotas.

A group of Senate Democrats continued to attack Wells Fargo on Friday, publicly calling on Stumpf to stop enforcing mandatory arbitration clauses in the agreements for customer accounts that were not authorized.

Sen. Sherrod Brown (D-Ohio) had pressed Stumpf on the matter at a Senate Banking, Housing and Urban Affairs Committee hearing Tuesday, arguing that it was unfair not to allow those customers the ability to file lawsuits against the bank.

Stumpf said at the time that he would have to “talk to my legal team.”

Brown said Friday that he and his colleagues want relief for bank customers and more answers from Wells Fargo.

“If Wells Fargo really does want to look out for the customers, if they really are in fact sorry, as the CEO said, for these unauthorized accounts, they ought to let the court system work if these people who were wronged want to bring suit,” he said.

Wells Fargo's collateral damage: customers' credit scores

Wells Fargo's collateral damage: customers' credit scores

The Democrats sent a letter to Stumpf on Friday, requesting more information about the arbitration clauses, including how many customer complaints about fake accounts were forced into arbitration proceedings.

Brown was among those writing to Stumpf, along with Patrick Leahy of Vermont, Richard Durbin of Illinois, Richard Blumenthal of Connecticut, Al Franken of Minnesota and Elizabeth Warren of Massachusetts.

A spokeswoman for Wells Fargo did not immediately respond to a request for comment.

Also on Friday, an activist investment group that is part of the Change to Win union federation wrote to Wells Fargo’s board, asking it to rescind at least part of the compensation earned by the executive who oversaw the employees who opened unauthorized customer accounts.

The letter from CtW Investment Group, which is a Wells Fargo shareholder, adds to the pressure on the bank to claw back some of the approximately $100 million earned by Carrie Tolstedt, the company’s former head of community banking.

Wells Fargo’s stock has declined by about 8% since the settlement was announced on Sept. 8.

On Thursday, five senators called for Stumpf not to be reappointed to the Federal Advisory Council, a 12-member body that meets four times a year with the Fed’s Board of Governors to discuss banking and economic matters.

Stumpf had represented the Fed’s San Francisco district, where Wells Fargo is based, since 2015.

He “made a personal decision to resign” and notified the Fed on Thursday, Wells Fargo spokeswoman Jennifer Dunn said.

“His top priority is leading Wells Fargo,” she said.

Sen. Angus King, an independent from Maine, organized the letter to the head of the board of directors of the Federal Reserve Bank of San Francisco asking that Stump not be reappointed to the advisory council when his term expires on Dec. 31.

“It would be ironic if the Federal Reserve, a key federal banking regulator tasked in part with ensuring the fair and equitable treatment of consumers in financial transactions, continued to receive special insights and recommendations from senior management of a financial institution that just paid a record-breaking fine to the Consumer Financial Protection Bureau for ‘unfair’ and ‘abusive’ practices that placed consumers at financial risk,” they wrote.

The letter also was signed by Warren and Democratic Sens. Maria Cantwell of Washington and Jeff Merkley and Ron Wyden, both of Oregon.

Their call was backed by Fed Up, a coalition of labor, community and liberal activist groups that has pushed to reduce the influence of bankers on Federal Reserve policies.

“Commercial banks already have too much influence within the Federal Reserve System,” the coalition said Thursday. The coalition also asked its members to sign a petition calling for Stump’s “immediate dismissal” from the advisory panel.

“Stumpf, as the CEO of a bank accused of ‘unfair’ and ‘abusive’ practices, should have no role advising the Federal Reserve’s Board of Governors on policies affecting working families,” Fed Up said.

By Jim Puzzanghera

Source

Reports indicate that a grand jury has decided not to indict NYPD Officer Daniel Pantaleo in the death of Eric Garner, an unarmed Black man. Garner died in July in Staten Island of neck compression, combined with asphyxia as a result of a chokehold applied while police officers were arresting him for the suspected sale of untaxed cigarettes.  The incident was captured on cellphone video by Ramsey Orta who was a bystander.  Garner had broken up a fight when officers attempted to arrest him. Pantaleo put Garner on the ground by the use of force, which included the use of a headlock resulting in Garner’s death.  The city’s medical examiner later ruled the death a homicide. The NYPD is banned from using chokeholds, however, chokeholds are not illegal. 

At a press conference Wednesday night, the Rev. Al Sharpton and Garner's family spoke about the grand jury's decision. Sharpton announced plans for a national march in Washington, D.C. on December 13 to urge the U.S. Department of Justice to investigate the string of recent police killings of unarmed Blacks. 

"We are dealing with a national crisis," he said. "We are not advocating violence, we are asking that police violence stop. Now you have a man chocked to death on videotape and says 11 times 'I can't breathe.'"  Garner's wife, Esaw, said she did not accept the apology give by Pantaleo on Wednesday after the grand jury didn't indict him. She said she plans to move forward to get justice for her late husband. 

"I'm determined to get justice for my husband," she said. "He should be here celebrating Christmas and Thanksgiving and he can't. My husband's death will not be in vain. As long as I have breath in my body I will fight the fight."

Several Black and Latino congressional members, including Gregory Meeks and Yvette Clark, held a press conference in Washington, D.C. after the grand jury's decision was announced. The legislatures called for the Justice Department to step into the case.  The U.S. Department of Justice is going to investigate Garner's death, according to reports. U.S. Attorney General Eric Holder announced that a federal civil rights investigation would be opened in the case. 

Mayor Bill de Blasio, Public Advocate Leticia James and several city council members held a press conference in Staten Island on Wednesday to address the issue. De Blasio said that frustration over the grand jury's decision is understandable.  "It's a very emotional day for our city. It's a very painful day for so many New Yorkers," he said. "We're grieving – again – over the loss of Eric Garner, who was a father, a husband, a good man – who should be with us." 

The decision in the Garner killing by a grand jury comes just over a week after a grand jury in Ferguson, Mo. decided to not indict Officer Darren Wilson for the shooting death of Michael Brown.  Peaceful demonstrations along with rioting followed the announcement of that decision.  Police Commissioner Bill Bratton met with several elected officials in Staten Island before the decision was announced anticipating the reaction to the decision.  Demonstrations were being announced via social media on Wednesday and took place Times Square, Grand Central and Union Square. A gathering was also planned for the nationally televised Rockefeller Center Christmas tree lighting set to take place in the evening.

Several groups including Communities United for Police Reform Justice Committee, Make the Road NY, VOCAL-NY, Center for Popular Democracy, Color of Change, Million Hoodies and Freedom Side announced they are organizing demonstration.

Source: Amsterdam News

July 26 was the deadline by which the government was ordered by a judge to reunite all immigrant children separated from their parents in Trump's so-called zero-tolerance border policy earlier this year. But of the approximately 2,500 children that were separated 711 still remain without their parents after the deadline, lawyers for the government said. Of those, 431 cases remain where the parents were deported before getting their children back and the rest were "ineligible" to be returned as per the government. Meanwhile protesters across the country have continued confronting ICE offices and other institutions involved in the immigrant crackdown including banks that are financing private prisons for immigrants. JPMorgan Chase, Wells Fargo, and BlackRock, have been targeted by activists this week after the Center for Popular Democracy released a report called Bankrolling Oppression. Eight people were arrested while protesting outside the home of JP Morgan CEO Jamie Dimon.

Watch the video here.