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Ian Millhiser

Ian Millhiser

Posted: February 17, 2009 10:10 AM

It's Not Just EFCA: Banks Spend TARP Funds on Anti-Consumer Lobbying


As the Huffington Post's Sam Stein recently reported, three days after Bank of America accepted $25 billion in TARP funds, it hosted a conference call with movement conservatives and business heavyweights in order to organize opposition to a piece of pro-union legislation. But Bank of America's anti-worker crusade is only the tip of a much larger iceberg. As a recent report at Overruled reveals, the banking industry has continued a massive anti-consumer lobbying campaign, even as it took hundreds of billions of dollars in TARP funds to stave off insolvency.

TARP was enacted to ensure that credit markets would continue to operate and to prevent the collapse of America's financial industry. The industry, however, has chosen instead to spend a portion of its funds lobbying Congress on bills that would curb some of the banking industry's worst excesses. Among the bills which the banking industry lobbied on after it began receiving TARP funds are bills to prohibit abusive arbitration practices, such as the Arbitration Fairness Act, the Fairness in Nursing Home Arbitration Act and the Fair Contracts for Growers Act; bills to help foreclosure victims and prevent irresponsible mortgage lending, such as the Mortgage Reform and Anti-Predatory Lending Act and the Helping Families Save Their Homes in Bankruptcy Act; bills to prevent the exploitation of credit card holders, such as the Credit Card Holders Bill of Rights and the Stop Unfair Practices in Credit Cards Act, and even bills to hold TARP recipients accountable for how they spend taxpayer funds, such as the TARP Reform and Accountability Act.

The banking industry's anti-consumer lobbying campaign also highlights the importance of one issue in particular, binding mandatory arbitration. As I have blogged about in the past, one of the credit card industry's most abusive practices is the use of binding mandatory arbitration clauses, which force credit card holders to sign away their right to hold the bank accountable in court if it breaks the law---and instead shunts the cardholder into a biased, privatized forum. Credit card companies increasingly refuse to issue credit cards unless the cardholder signs an arbitration agreement, and when the cardholder does sign this agreement, they effectively give the company carte blanche to violate any laws it chooses. As one study of almost 20,000 arbitration decisions found, the corporate party prevails a massive 94% of the time in suits between a credit card company or debt collector and an individual cardholder. We now know that the banking industry has aggressively lobbied to continue this abusive practice even as they were relying on government handouts to avoid bankruptcy.

The full report on the banking industry's post-TARP lobbying activities can be read here.

 
 
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11:24 AM on 02/18/2009
Thank you for keeping this at the forefront of our minds; we need to remember this!
HUFFPOST SUPER USER
wrabbitt
Soylent Green IS People.
09:56 PM on 02/17/2009
This shouldn't come as a surprise to anyone. The bank bail out was always anti consumer, was always meant to be that way. We have no choice in how taxpayer money is spent. we never were in the loop, our opinions were never needed. Lobbyists have controled congress for many years, but, not even money can get them to work! I am sure that everybody else got the letter from their credit card company raising their interest rates, even tho i never missed a payment! And now i don't use the cards at all, or if i do i pay it off at the end on the month! But, my money is in a bank, a small town bank that gives mortgages and don't sell them.A bank like it was supposed to be! Like our government used to be! trusting, honest,too bad neither of those words can be used in the same sentence as the word government!
HUFFPOST PUNDIT
maxfax
Taa - dah!
09:51 PM on 02/17/2009
"Financial terrorists" is the perfect term for banks and the people who run them.
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HUFFPOST SUPER USER
SilviaMaria
08:43 PM on 02/17/2009
Let's do one thing: get some information on the above-mentioned bills, find out who is sponsoring them, and email our representatives to support them.
08:27 PM on 02/17/2009
It's just like the Iraq war. We get to pay for our own forces, as well as for those shooting at us.
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HUFFPOST SUPER USER
Rogan
12:24 AM on 02/18/2009
That's what happens when the folks running the country try to carry off all the money in the world... the unpaid bills all arrive at the same address.
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peterg76
Freelance medical transcriptionist
08:09 PM on 02/17/2009
The "bailout" scam was always about helping the banks. Not consumers, not the banking system, just the banks. They didn't even try to disguise the fact.
07:56 PM on 02/17/2009
These bankers are not a professional people, they are scumsuckers of the worst sort. Let them fall and instead, support local credit unions and community-based banks. Liked the comment about them being out of touch and the French Revolution; just remember that the Soviet people didn't foresee the collapse of the U.S.S.R.. Only a few thought this might conceivably happen, over time.
09:53 PM on 02/17/2009
They are the financeers of the "conservative movement" -- thieves in the highest of places.

That's the core of the "conservative movement": "free market" means, in actuality and reality, "lawless".
06:51 PM on 02/17/2009
Any company that acepts TARP fund should be banned from making any financial contributions to politicians and/or political parties in 2009 and 2010.

Send that suggesion to your elected representatives and see what response you get.
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Rmtns
Republican't is what it is
07:43 PM on 02/17/2009
Better yet, reduce dollar for dollar the money that they spend for lobbying from any payments from the Tarp funds, and if they aren't getting any more, a dollar for dollar tax bill for theses dolts!
06:15 PM on 02/17/2009
Here's the scariest part: even with the growing outrage among the people, our "leaders" see almost no need to mask what they're doing. It's out and out plunder, pure and simple. It's as if they're baiting us: "what you gonna do about it - huh? what you gonna do? you gonna rise up and revolt? ooh, we're so scared!" Not to worry, though: they do have contingency plans just in case people really do rise up in protest. The amazing thing is, they actually imagine they could muster enough firepower to counter such an uprising, if it ever came. Seeing how truly blind our ruling class is, you can understand how something like the French Revolution - which could have been prevented with a little common sense on the part of the aristocracy - could have happened. Rulers are so out of touch with reality that they actually do believe the entire world revolves around them. Bottom line: no it doesn't.
03:53 PM on 02/17/2009
I worked at B of A Card Services and will tell you over the last year as the housing and job markets dumped, the Bank, as it is called (remember "the Phone Company"?), had one two-part solution: raise interest rates to get as much as possible before the consumer is forced to default and sell them more debt--particularly a predatory long-term loan with low payments and an interest rate at the top tier of credit card tradition, 21.99%. For a LOAN. The spin to boggle the mind of the squeezed customer so it sounded good, was rich. Or should I say, rich against poor. Class war? You betcha, the aristocraps who ruled the White House for the last 8 years and the hearts and minds of the media for the last 25 have been waging one against the lower 48 for at least that long. The lower 48? Just my term for the (at least) 48% of us who make up the poor and working classes. Banks and Oil, they rival each other to rule the world, and the rest of us are their free, unlimited resource to fund the war against us. Lovely.
03:50 PM on 02/17/2009
I'm sick of watching our government bail out banks and corporations at the expense of taxpayers to the point that I'm ready to protest in the street. If I was "MyLeftMind" posted at 12:20P I'd be so angry I'd want to ki_l people. Something has to change. Do we let failing banks keep foreclosing upon our houses and selling them back to us at huge profits or do we protest in the streets? This is evil!!!
03:38 PM on 02/17/2009
We are beginning to see what this is all about.

Why in the world would we want to give people who have proven that they are greedy and cannot manage money, more money top manage?
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HUFFPOST SUPER USER
TJCole
03:33 PM on 02/17/2009
We are a government, of the bankers, for the bankers and by the bankers...!

Simple as that...
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tenzenz
Save the Nation Boil a Tea Bag
03:28 PM on 02/17/2009
Not one more cent to these crooks. How could our Legislators allow this to happen? the middle class already lost trillions of dollars to the scheming greed of the financial leaders on Wall St. & elsewhere. then we gave them another trillion dollars to bail them out...For What? To spend hundreds of millions of those very same taxpayer dollars to lobby against the regulations necessary to prevent the past practices & avoid being ripped off again.
If this is what they insist on doing, why should we give them any more money? they refuse to Get IT! They have no interest in helping this nation recover from their greed & corruption. freeze all of their assets, both public & private, including any assets that their families obviously gained through transfers made to hide the profiteering. Take control of all of it through a system similar to the Resolution Trust of the 80s & 90s, & use those funds & assets to help fix the financial system, & recover some of the money stolen from the Pension funds. NO MORE FUNDING FOR THESE CROOKS
03:19 PM on 02/17/2009
According to the latest numbers ( http://www.bls.gov/news.release/empsit.nr0.htm ):

As of Jan 2009, there are about 153.7 million people in the U.S. labor force (employed and unemployed).

There's $350 billion in TARP funds remaining, right?
Why don't we just split it up among the workforce?

That would work out to about $2200 a person, or more if we exclude people earning over $75K a year.
Wouldn't that be a much more effective stimulus than the paltry 400 bucks that most people will be getting in their paychecks at about 12 bucks at a time?

Surely that would be a much better use of the funds than giving it to poorly managed auto company dinosaurs.