Archive: June, 2013
If you've been paying attention to banking critics in recent years - including consumer advocacy groups and the Pew Charitable Trusts - the latest news from the Consumer Financial Protection Bureau will hardly be a shocker: A white paper made public Tuesday shows that U.S. banks have become heavily reliant on overdraft and non-sufficient-funds charges, and that a small portion of errant customers are paying the bulk of the bills. In 2011, those two kinds of fees - once considered "nuisance charges" imposed to deter bad behavior - generated about 60 percent of total fees collected on consumers' checking accounts.
You can find the report, a 72-page white paper based on a year-long study of how overdraft fees play out in the marketplace, here. Beyond the many data points it discusses, the report plainly reflects regulators' doubts that the Federal Reserve's three-year-old "opt in" rule does enough to reduce consumers' risks from overdraft fees - doubts, to be sure, that were already evident in February 2012 when the CFPB announced the study.
Opt-in rates vary dramatically, below 10 percent at some banks and above 40 percent at others, which CFPB Director Richard Cordray said raised questions about how the plans are pitched. He said a key concern was that plans presented as offering "protection" to customers "may actually be putting consumers at greater risk of harm.”
In a column last month, I told the latest tale of Patrick Rodgers, who runs an actual store in Queen Village and a virtual store on eBay, and who complained that the online-marketplace giant had treated him like, well, a virtual serf. Earlier this year, eBay had summarily shut down his online business, The MTG Place, for 46 days in a case of mistaken identity. EBay had apparently received complaints against the man who founded The MTG Place and sold it to Rodgers three years ago. Rodgers sued for $5,000 in lost revenue, contending that eBay had no grounds to shut him down before investigating - an inquiry that led to his reinstatement and a sorry-for-the-inconvenience email. Now eBay wants to clarify its position. It says Rodgers essentially had no right to buy the store without its prior consent.
Rodgers is no stranger to the David-vs.-Goliath thing. He's the same Philly homeowner who made national news two years ago with his claim to have "foreclosed on a bank." He had won a default judgment against Wells Fargo in a mortgage dispute, and when the megabank didn't pay a $1,000 fine, Rodgers got a "Sheriff Sale" order for the contents of one of its Philadelphia offices - a small victory but enough to make Rodgers' story go viral after I wrote about for The Inquirer. He even went on The Colbert Report, though Colbert was more interested in the Goth music promoter's cosmetic fangs than his financial victory. How, Colbert demanded, could the rest of the media overlook an obvious vampire?
EBay didn't respond to my questions in time for last month's column, but afterward said it wanted to make its position clear. In an email, spokesman Ryan Moore wrote:
|The Colbert Report||Mon - Thurs 11:30pm / 10:30c|
|Difference Makers - Patrick Rodgers|
Writing for Britain's The Guardian newspaper, Glenn Greenwald has disclosed a large-scale, top-secret data demand by the U.S. government: The FBI asked the Foreign Intelligence Surveillance Court in April to order Verizon to turn over three months of certain call records - including records of purely domestic calls - to the National Security Agency.
As he has done in the past, Greenwald has focused attention on the vast reach of the post-9/11 U.S. security apparatus. You can read his report here, and find a link to the highly classified document he posted. Greenwald has lifted at least a corner of the veil shrouding the U.S. government's focus on phone records as a counterterrorism tool - a focus reported to date back to the 2001 attacks, or perhaps even before .
Presuming the accuracy of the document - and the White House has already defended the intelligence-gathering practice, though without confirming any details - it's worth noting how much Greenwald's report leaves unclear, and also how it fits into what we already know but don't seem willing to face. For instance:
If the disclosure of a top-secret court order requiring Verizon to turn over call records to the National Security Agency stirred renewed anger at the "surveillance state" that's arisen since 9/11 and passage of the Patriot Act, the latest allegations could prompt a real furor - not to mention lots of gallows humor about who's peeking at your emails and chats.
Britain's Guardian newspaper and the Washington Post both reported Thursday night that under a 2007 program called PRISM, the NSA and FBI have been able to tap into Internet content controlled by Microsoft, Google, Facebook and other leading companies to mine communications involving at least one person believed to be overseas - and that more than so-called "metadata," or records about the communications, is involved.
The Post says that with PRISM, the NSA and FBI are "tapping directly into the central servers of nine leading U.S. Internet companies, extracting audio and video chats, photographs, e-mails, documents, and connection logs that enable analysts to track foreign targets, according to a top-secret document obtained by The Washington Post."
With a fight looming over the future of the U.S. Court of Appeals for the D.C. Circuit, law professor Tim Wu offers an excellent analysis of one of the most significant legal trends to emerge as supposedly conservative jurists - including some on that key appeals court - have embraced a new avenue of judicial activism: allowing corporations to use the First Amendment as a shield against regulation.
Citizens United v. Federal Election Commission, the 2010 case in which the Supreme Court said corporations were entitled to the same free-speech rights as individuals, is much better known. But Wu sees it as part of a larger, long-term fight against any restrictions on corporate "speech" - a position that, if applied to ordinary commercial speech, can undermine the government's ability to regulate any marketplace activity.
In The Right to Evade Regulation How corporations hijacked the First Amendment in the New Republic, Wu says a key commercial-speech case came a year after Citizens United, when the high court sided with pharmaceutical marketers on free-speech grounds in a data-mining case. In Sorrell v. IMS Health, the court overturned a Vermont law that barred the sale of "de-identified" prescription records to drugmakers - data that identified doctors but not patients, and that enabled drugmakers to target marketing efforts at physicians deemed more likely to prescribe their products. The court said barring data miners from selling their knowledge violated their corporate First Amendment rights.