Consumer Protection & Corporate Accountability

Intuit, a private firm that manufactures TurboTax, has pushed California lawmakers to eliminate the popular, successful, and cost-effective public tax filing services, ReadyReturn and CalFile. These two programs offer millions of low- and middle-income Californians a free and reliable method to calculate and file taxes.

We've detailed in the past the way new international trade deals empower corporations to undermine local regulations. A recent case highlights just how byzantine and dangerous the process is getting: A Canadian mining company is using a recently established Nevada subsidiary to use the federal Central America Free Trade Agreement (CAFTA) to try and overturn mining regulations in El Salvador. Earlier this month, a tribunal under CAFTA ruled against the US government’s objections to the mining company's lawsuit and allowed the case to proceed.

State governments are finally taking action to address the catastrophic damage caused by the oil spill in the Gulf of Mexico. The Office of the Attorney General of Alabama has filed before a U.S. District Court a complaint against British Petroleum for what it described as the largest marine oil disaster in the history of the United States.

Even as officials announce that the oil leak has finally been capped, residents of the Gulf Coast have only just begun what is sure to be a long, difficult period of renewal following April’s Deepwater Horizon disaster. The catastrophe has wreaked havoc upon communities and businesses along the coast and, while the federal response has been well-coordinated and highly centralized, so far many state governments along the Gulf Coast have done little on their own to mitigate the effects of the spill.

Yesterday, the Supreme Court ended its term with a bang with a ruling in McDonald v.

Illinois has enacted a law that will take away a necessary protection for landline phone consumers. SB 107 strips away the authority of the Illinois Commerce Commission to ensure that landline phone users – residing in 78 percent of households in the state - receive reliable and affordable phone service. Under the law, Internet-based phone services would be completely unregulated. The ICC has been instrumental in promoting universal access to telecommunications services in the state, as mandated by the state’s Telecommunications Act that was last updated in 2001. It required a service provider to offer high-speed Internet access to at least 90 percent of homes outside of the Chicago Metropolitan area. This newly enacted law eliminates such requirement and the ability of Illinoisans to access affordable High-Speed Internet services. Consequently, the law threatens to reduce investment in broadband that could make the state more competitive in the global market.

The payday lending trap has been shorting working families to the tune of nearly $5 billion per year ever since the industry exploded onto the scene in the 1990’s.  The number of payday lending institutions has jumped exponentially from 500 in 1990 to about 22,000 today (compared with 14,000 McDonald's), mainly targeting low-income African American and Latino communities. 

As Congress debates federal financial reform legislation, a key priority for financial industry lobbyists remains gutting provisions that would strengthen enforcement by state attorneys general and stopping the partial restoration of state powers to regulate national bank abuses against consumers.  As we detailed three years ago, much of the damage to communities from subprime lending might have been avoided if the Bush Administration had not been able to shut down most state anti-predatory lending laws early in the decade.

The same large banks whose unregulated actions were primary contributors to the economic downturn have also been manipulating state and local governments to profit from budget deficits for years.  Essentially, banks are alluring states with the promise of a means to cut borrowing costs and increase returns through the use of an interest rate swap.  The mechanism is a derivative that allows cash-strapped municipalities and states to exchange interest payments on a variable bond deal for an allocation of funds from a bank.  So, the bank would establish a fixed rate on the bond and swap for the variable "interest rate of the bond that was set by larger macroeconomic forces, such as the Federal Reserve."  Unfortunately, the results have been disastrous.

Portending a sharp increase in corporate political spending, the Supreme Court has ruled (Citizens United v. FEC) that corporations enjoy the same speech rights of citizens when it comes to advocating the election or defeating political candidates. Elected officials, including U.S. President Barack Obama, have denounced the ruling as striking at the heart of our democracy by putting corporations on an equal footing with real people when it comes to basic constitutional rights.