Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
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Topics today include:
Elizabeth Warren Celebrates the 5th Anniversary of the CFPB
Not Everyone is Celebrating Consumer Protection
Payday Loan Sharks Have Their Supporters
But Payday Loans are Not Supported by Hillary - She Wants Postal Banking
Social Insurance Was Invented to Protect Property Rights
Oil Slumps While Global Economy Picks Up Speed
Some Big Banks are Trimming Down
Why Trump is Winning
Items from the Democratic Convention
New York AG Tells Congress to Stay Out of State Affairs
Congress is Investigating the Investigations of Exxon Mobil
Jim Welsh Interview on WBBM, CBS Chicago
Brexit Hit on London Homes Could Reach 30%
37 Russians Banned from Rio Olympics, But Some Associations Decline to Act
Rare Mass Murder in Japan
U.S. and Costa Rica Partner on Refugee Problem
Articles about events, conflicts and disease around the world
Common Property (Boston Review) A historical review of communal movements which develops an argument that social insurance and safety nets were developed in defense of private property and not as a slippery slope to communism.
Oil slumps on surging supply but global economy picks up speed (The Telegraph) The latest oil price declines reveal little about the underlying health of the global economy, which has so far shrugged off Brexit fears and may be accelerating as central banks and governments in Asia, Europe, and North America step up precautionary stimulus. See oil chart below and surge of global money supply and industrial production to multi-year highs, second chart below.
Citigroup, HSBC Jettison Customers as Era of Global Empires Ends (Bloomberg) Once upon a time, about a decade ago, the New York-based giant bank Citigroup had a global retail empire stretching from Tokyo to Tegucigalpa. It offered consumer banking in 50 countries, covering half the planet’s land mass, and served 268 million people. Today that number 69 million lower. Bigger isn't better in banking, once a certain size is achieved and the behemoths are reacting to that lesson by "unwinding and shedding assets" (Vikram Pandit, Former Citigroup CEO). HSBC is undergoing a similar transformation, detailed in this article. From the article, about Citigroup:
... a financial crisis, billions of dollars of losses from complicated securities linked to subprime mortgages and a government bailout upended its plans. The bank has since sold or shut retail operations in more than half the countries in which it had a presence, including Guatemala, Egypt and Japan. It reduced the number of branches in the U.S. by more than two-thirds and has gotten out of subprime lending, student loans and life insurance. In the process, it let go about 25 percent of its customers along with more than 40 percent of its workforce.
Clinton camp fears more leaks are coming (The Hill) The Hillary Clinton campaign is bracing for the possibility of more damaging emails being leaked to the public as the presidential campaign enters its home stretch. Jennifer Palmieri, communications director for Hillary for America, said it’s possible that more emails will be released at a time designed to inflict maximum political pain on Democrats. She told reporters:
“The WikiLeaks leak was obviously designed to hurt our convention,”“I don’t think they’re done. That’s how they operate. We can’t know, but it’s part of the reason that we wanted people to understand our belief that the Russians are behind this. People need to understand — when these leaks happen — what they’re designed to do.”
Sanders supporters: Unmoved by plea to support Clinton (Associated Press) Undeterred by Sen. Bernie Sanders' plea for party unity behind Hillary Clinton, Sanders supporters chanting "Bernie or bust!" took to the streets under the hot sun Tuesday for more demonstrations on Day 2 of the Democratic convention. Several hundred gathered around noon in a rally at City Hall with plans to join up in the afternoon with groups decrying police brutality and economic injustice. Together they planned to march the 4 miles down Broad Street to the convention site.
New York AG rejects GOP’s climate subpoena (The Hill) New York Attorney General Eric Schneiderman (D) is refusing to comply with House Republicans’ subpoena over his climate change investigation. Schneiderman’s counsel, Leslie Dubeck, wrote Tuesday that the subpoena issued earlier this month by House Science Committee Chairman Lamar Smith (R-Texas) falls outside of the panel’s authority and violates New York’s rights as a state. Today is the deadline Smith gave Schneiderman, Massachusetts Attorney General Maura Healey (D) and numerous environmental groups to respond to wide-ranging subpoenas about their Exxon investigations. The questions being investigated regard whether whether Exxon Mobil Corp. illegally lied about what it knew about climate change.
Brexit Hits London Luxury Homes With Earls Court Writedown (Bloomberg) Capital & Counties Properties Plc wrote down the value of its land holdings in London’s Earls Court district by 14%, the latest signal that luxury-home values will probably fall following the vote for Brexit. The shares fell as much as 5.3%. The company cut the value of the plots to £1.2 billion ($1.6 billion) from about £1.4 billion after sale prices were trimmed at part of the project and forecasts were lowered for the Lillie Square development, the landlord said in a statement on Tuesday. The firm, including its joint ventures, plans to build more than 7,500 homes at Earls Court. Analysts predicted Earls Court prices have another 10% decline coming this year and the London market in general will see as much as 30% lower prices.
Dutch men revealed as world's tallest (BBC News) When it comes to height, Dutch men and Latvian women tower over all other nationalities, a study reveals. The average Dutchman is now 183cm (6ft) tall, while the average Latvian woman reaches 170cm (5ft 7in). Well, Rik Smits, the second tallest man to play college basketball in the U.S. (Marist College 1984-88) and in the NBA (Indiana Pacers for 11 years) was born and raised in the Netherlands.
Rare mass killing raises questions about security in Japan (Associated Press) The killing of 19 people at a home for the mentally disabled raised questions about whether Japan's reputation as one of the safest countries in the world is creating a false sense of security. The deadliest mass killing in Japan in the post-World War II era unfolded early Tuesday in Sagamihara, a city about 50 kilometers (30 miles) west of central Tokyo, when authorities say a former employee broke into the facility and stabbed more than 40 people as they slept before calmly turning himself in to police
US partners with Costa Rica to protect Central American refugees (The Guardian) Costa Rica will offer temporary protection to refugees fleeing Central America for the US, the Obama administration announced on Tuesday, following an admission by officials of its failure to address the surge in refugees fleeing violence, rape and kidnappings. Central Americans from Honduras, El Salvador and Guatemala have fled their countries in their thousands. As violence in the Northern Triangle spiked in 2015, the number of asylum seekers from these countries rose to more than 110,000 – a fivefold increase from 2012. Most are seeking refuge in Mexico and the United States.
Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea
Today, we have a collection of items about the first 5 years of the Consumer Financial Protection Bureau and current related issues.
As CFPB Hits Fifth Birthday, Not Everyone Is Celebrating (Forbes) This article explains why some are critical of the Consumer Financial Protection Bureau (CFPB). Most galling to opponents is that it cannot be controlled because it is funded by the Federal Reserve so that opposing politicians cannot "cut its budget as punishment, as they’ve done to the Internal Revenue Service". See next article.
CFPB's Impact, Five Years On(American Banker) Hat tip to Roger Erickson. This article is behind a paywall. The following sbstract/summary was forwarded:
The Consumer Financial Protection Bureau is taking a victory lap this week as it celebrates its fifth anniversary, noting its accomplishments during the past five years, including collecting $11.7 billion in restitution for 27 million consumers.
Yet the milestone also marks an important shift for the agency. Up until recently the CFPB has been largely focused on fulfilling the many responsibilities given to it by the Dodd-Frank Act, which created the agency. But with rulemakings governing qualified mortgages, mortgage disclosures, remittances and arbitration mostly behind it, the CFPB will begin wading further into uncharted waters where it has more flexibility over what to pursue. Those include finalizing rules governing payday lending and targeting additional areas like prepaid cards, overdraft fees and auto lending — areas where action is not required by Dodd-Frank.
The CFPB Turns 5 Today. Here’s What It’s Done (and What It Hasn’t) (Time) The agency, created in the wake of the financial crisis, was supposed to protect American consumers from the abuses of the financial industry after millions got burned by ill-advised mortgages. The idea—formulated by Elizabeth Warren, then an influential law professor, now a Massachusetts senator—was supposed to be simple: A new bureau to vet financial products the same way the Consumer Product Safety Commission vets toasters. But it has not really gotten to that level of operation. The top accomplishment this author listed is "staying alive".
The Obama administration has targeted a number of unpopular industries, such as gun shops and small-dollar lenders, for excessive restrictive regulations designed to put them out of business. While it is popular to hate small-dollar lenders, who offer title and payday loans to consumers who are unable to access other forms of credit, the growing number of such lenders in most towns and cities prove customer demand for their services.
About 12 million mostly lower-income Americans have the need to use payday loans to meet their financial needs, yet the administration and some liberal politicians in Congress want to eliminate entirely access to these credit services.
Draconian regulations proposed by the Consumer Financial Protection Bureau, a new almost unaccountable federal agency created under the Dodd-Frank financial regulations law in 2010, would put most if not all payday lenders out of business. The regulations would impose on lenders a strict credit analysis of consumers applying for payday loans, would limit the loans to no more than two extensions, and would also add countless other restrictions. The burdensome regulations would make the business of small-dollar lending almost entirely unprofitable, and cause most payday lenders to close their businesses.
Payday Loans: How They Work, What They Cost (The Atlanta Journal Constitution) A payday loan offers fast cash for people who have an income, but bad credit. Payday loans are typically small, less than $500. But payday loans are the most expensive way to borrow money. If the loan isn’t repaid in full on the first payday, a new finance charge is added and the cycle repeats. Within a few months, borrowers can end up owing more in interest than the original loan amount. Because short-term lending is subject to a patchwork of state and federal laws, these loans look different in nearly every state. They may go by names such as cash advance, deferred deposit, deferred presentment, or credit access business. This article has an extensive Q&A.
Why Hillary Clinton thinks making the Postal Service a bank too, is a good idea (CNBC) he Democratic platform laid out some of the party's main talking points for the general election, but also included one that may seem unusual, even bizarre, to some. The 55-page platform said that a Hillary Clinton administration would work to let the U.S. Postal Service offer "basic financial services," including cashing checks and giving USPS more flexibility in choosing with services it provides, in an effort to revitalize the government service. Harry Holzer, a professor of public policy at Georgetown University, said the reasoning behind this may be "it's the one institution that kind of exists everywhere already". He added, however, the government would have to spend money to make this work. Econintersect: Postal banking is widespread in the rest of the developed world and would be a major deterrent against payday lenders.
Dems hail Dodd-Frank reforms on law's anniversary (The Hill) Democrats on Thursday marked the sixth anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act, arguing that the law was more important than ever. Defenders said the sweeping post-recession financial sector reforms are needed as a counterweight to global economic uncertainty and warned Republicans against rolling back the law.
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