Category: Look Out for the Little Guy

Pence casts tie-breaking vote to make it more difficult for consumers to sue banks and credit card companies

The Senate has voted to nullify a consumer-oriented rule that would let millions of Americans band together to sue their banks or credit card companies.

Vice President Mike Pence cast the tie-breaking vote Tuesday night to stop the rule from going into effect – the fifth instance he has broken a 50-50 tie since taking office.

Many consumers must go through an arbitrator to resolve financial disputes, but the Consumer Financial Protection Bureau finalized a rule that bans most types of mandatory arbitration clauses.

The rule exposed banks to large class-action lawsuits. Supporters say that possibility would help ensure banks, credit card companies and other lenders treat consumers appropriately.

The vote comes months after House action and reflects the effort of the Trump administration and congressional Republicans to undo regulations that the GOP argues harm the free market.

Democrats said before the vote that nullifying the rule would be a victory for Wall Street.

The resolution will now go to President Donald Trump, who is expected to sign it into law.

[Business Insider]

 

Trump offered a grieving military father $25,000 in a call, but didn’t follow through

President Trump, in a personal phone call to a grieving military father, offered him $25,000 and said he would direct his staff to establish an online fundraiser for the family, but neither happened, the father said.

Chris Baldridge, the father of Army Cpl. Dillon Baldridge, told The Washington Post that Trump called him at his home in Zebulon, N.C., a few weeks after his 22-year-old son and two fellow soldiers were gunned down by an Afghan police officer in a suspected insider attack June 10. Their phone conversation lasted about 15 minutes, Baldridge said, and centered for a time on the father’s struggle with the manner in which his son was killed.

“I said, ‘Me and my wife would rather our son died in trench warfare,’ ” Baldridge said. “I feel like he got murdered over there.”

Trump’s offer of $25,000 adds another dimension to the president’s relations with Gold Star families, an honorific given to those whose loved ones die while serving in support of the nation’s wars. The disclosure follows questions about how often the president has called or written to grieving military families.

The Washington Post contacted the White House about Baldridge’s account on Wednesday morning. Officials declined to discuss the events in detail.

But in a statement Wednesday afternoon, White House spokeswoman Lindsay Walters said: “The check has been sent. It’s disgusting that the media is taking something that should be recognized as a generous and sincere gesture, made privately by the President, and using it to advance the media’s biased agenda.”

Trump said this week that he has “called every family of somebody that’s died, and it’s the hardest call to make.” At least 20 Americans have been killed in action since he became commander in chief in January. The Washington Post interviewed the families of 13 and found that his interactions with them vary. About half had received phone calls, they said. The others said they had not heard from the president.

In his call with Trump, Baldridge, a construction worker, expressed frustration with the military’s survivor benefits program. Because his ex-wife was listed as their son’s beneficiary, she was expected to receive the Pentagon’s $100,000 death gratuity — even though “I can barely rub two nickels together,” he told Trump.

The president’s response shocked him.

“He said, ‘I’m going to write you a check out of my personal account for $25,000,’ and I was just floored,” Baldridge said. “I could not believe he was saying that, and I wish I had it recorded because the man did say this. He said, ‘No other president has ever done something like this,’ but he said, ‘I’m going to do it.’ ”

The president has faced worsening backlash since details emerged of his phone call Tuesday with the widow of Sgt. La David T. Johnson, who was killed Oct. 4 alongside three other U.S. soldiers in Niger. After not addressing the incident for 12 days, Trump on Monday falsely claimed that previous presidents never or rarely called the families of fallen service members. In fact, they did so regularly.

[Washington Post]

Trump: I want to focus on North Korea not ‘fixing somebody’s back’

President Trump praised health care block grants on Saturday, saying they allow the states to focus on health care, but said he would rather focus his energy on tensions with North Korea than “fixing somebody’s back or their knee.”

“You know in theory, I want to focus on North Korea, I want to focus on Iran, I want to focus on other things. I don’t want to focus on fixing somebody’s back or their knee or something. Let the states do that,” the president told Mike Huckabee on the Trinity Broadcasting Network’s “Huckabee.”

“The block grant concept is a very good concept, and if you have good management, good governors, good politicians in the state, it’ll be phenomenal,” he continued.
“I could almost say we are just about there in terms of the vote, so I expect to be getting health care approved,” he said.

Trump’s comments come after Senate Republicans failed twice this year to fulfill a seven-year campaign promise of repealing and replacing ObamaCare.

The latest repeal and replace failure was the Graham-Cassidy bill, which included block grants to states.

However, the legislation failed after Sens. John McCain (Ariz.), Rand Paul (Ky.) and Susan Collins (Maine) announced their opposition to the bill last month, effectively killing it.

Trump has expressed frustration in his Republican colleagues in the Senate for their health care failure, so much so that he called Senate Minority Leader Charles Schumer (D-N.Y.) on Friday to discuss the issue.

The move is likely to unsettle Republicans on Capitol Hill who have been working with Trump on tax reform in recent weeks.

[The Hill]

Trump to cut pay raises for government workers

President Trump sent a letter to Speaker Paul Ryan (R-Wis.) on Thursday announcing his intention to cut pay raises for civilian government workers.

In the letter, Trump cited his authority in times of “national emergency or serious economic conditions affecting the general welfare” to make adjustments to the 2018 pay schedule for federal employees.

Under the previous plan, workers were scheduled for a 1.9 percent bump. Trump will use his authority to lower that to 1.4 percent.

“We must maintain efforts to put our Nation on a sustainable fiscal course,” Trump wrote.

“A pay increase of this magnitude is not warranted, and Federal agency budgets could not accommodate such an increase while still maintaining support for key Federal priorities such as those that advance the safety and security of the American people.”

Pay raises for government workers outside of Washington, D.C., will average only 0.5 percent and will be specified in a coming executive order, Trump said.

The White House did not respond to a question about how much the government would save from the action or whether it had discussed the matter with offices on Capitol Hill.

Trump will maintain the 2.1 percent pay increase for members of the military.

“I strongly support our men and women in uniform, who are the greatest fighting force in the world and the guardians of American freedom,” Trump wrote. “As our country continues to recover from serious economic conditions affecting the general welfare, we must work to rebuild our military’s readiness and capabilities.”

[The Hill]

Trump Picks Lobbyist Linked to Forced-Abortion Sweatshop Scandal as Overseer of Worker Protections in U.S.

President Donald Trump’s pick to be deputy secretary for the Department of Labor is a former lobbyist who worked to allow companies to run sweatshops in the Northern Mariana Islands, a territory of the United States.

Mother Jones reported on Tuesday that Trump nominee Patrick Pizzella was linked to a scandal involving disgraced former Republican lobbyist Jack Abramoff.

Pizzella reportedly helped defeat a bipartisan effort to clean up sweatshops on the islands in the 1990s after horrific details of worker conditions and forced abortions came to light.

According to Mother Jones, Pizzella and his colleagues arranged trips to the Northern Mariana Islands for more than 100 members of Congress in order to defeat the measure.

Read the entire report here.

[Raw Story]

Interior Dept. Halts Study Into Appalachian Mining Technique’s Likely Health Hazards

The Trump administration has halted a study of the health effects of a common mining technique in Appalachia, which is believed to deposit waste containing toxic minerals in ground waters.

A letter from the Interior Department directed the National Academies of Sciences, Engineering and Medicine to “cease all work” on a study of the potential health risks of mountaintop removal mining for people living near surface coal mine sites in central Appalachia. The Interior Department acknowledged in a statement that it had “put on hold” $1 million in funding for the two-year project as part of a review of its grants, which is focused on “responsibly using taxpayer dollars.”
“The Trump Administration is dedicated to responsibly using taxpayer dollars and that includes the billions of dollars in grants that are doled out every year by the Department of the Interior,” the statement said.

Still, the National Academies — a nongovernmental institution that researches and advises the government on science and technology — plans to move forward with part of the research, and will hold previously scheduled public meetings this week in Kentucky, the Academies said in a statement.

Political reaction was swift to the Trump administration’s decision to suspend the study of “the potential relationship between increased health risks and living in proximity to sites that have been or are being mined or reclaimed for surface coal deposits,” which began last year and was expected to take two years to complete.

“Mountaintop removal mining has been shown to cause lung cancer, heart disease, and other medical problems,” Democratic Rep. Raul Grijalva of Arizona, the ranking democrat on the House Committee of Natural Resources, said in a statement.
“Clearly this administration and the Republican Party are trying to stop the National Academy of Sciences from uncovering exactly how harmful this practice is,” Grijalva said.

“It’s infuriating that Trump would halt this study on the health effects of mountaintop removal coal mining, research that people in Appalachia have been demanding for years,” said Bill Price, Senior Appalachia Organizing Representative for environmental advocacy group Sierra Club’s Beyond Coal campaign.

[CNN]

Trump Endorses Repeal-First Strategy if Health Care Deal Not Reached

As Senate negotiations continue over the stalled Republican health care bill, President Donald Trump Friday morning called on senators to pass a simple repeal of Obamacare now and focus on replacing it later this year if no deal is reached.

Trump’s tweet came just after Sen. Ben Sasse, R-Neb., sent a letter to the White House urging the president to support a repeal-first, replace-later strategy if there is no agreement by the time senators return from their week-long Fourth of July recess on July 10.

The idea has been floated by some Republicans since a planned Senate vote on the GOP Better Care Reconciliation Act was postponed Tuesday because leaders were unable to secure the 50 GOP votes needed to pass it.

Sasse has been working quietly with the White House on the idea, according to a Senate Republican aide who said the administration was receptive to the idea.

“You campaigned and won on the repeal of Obamacare. So did every Republican senator. We should keep our word,” Sasse wrote in the letter.

“On the current path, it looks like Republicans will either fail to pass any meaningful bill at all, or will instead pass a bill that attempts to prop up much of the crumbling Obamacare structures,” he added. We can and must do better than either of these — both because the American people deserve better, and because we promised better.”

Sasse also asked the president to call on Congress to cancel its scheduled month-long August recess to work on a replacement bill for a Labor Day vote. “After we gave our word to repeal and replace Obamacare’s monstrosity,” he said, “we should not go back to our states during August as the American people struggle under fewer choices and skyrocketing costs. We should remain in D.C. at work.”

Sen. Rand Paul, R-Ky., who has publicly been advocating starting the idea of starting with a full Obamacare repeal publicly for two weeks, quickly retweeted the president and added his support.

Sasse has kept a low profile throughout the negotiations on health care, refusing to comment or publicly engage on the bill.

The idea was considered by Republican leaders at the beginning of this year when Trump took office but it was quickly dropped when they realized it would be too politically difficult to replace Obamacare outside the reconciliation process where the Senate would need the support of Democrats to pass a replacement.

Senate Republicans continue to discuss a way forward in the health care bill, considering changes to appear both moderates and conservatives to get the support of 50 of 52 Republicans.

[NBC News]

 

Trump team halts rules meant to protect students from predatory for-profit colleges

The Trump administration is suspending two key rules from the Obama administration that were intended to protect students from predatory for-profit colleges, saying it will soon start the process to write its own regulations.

The move made Wednesday by Education Secretary Betsy DeVos was a victory for Republican lawmakers and for-profit colleges that had lobbied against the rules. Critics denounced it, accusing the administration of essentially selling out students to help for-profit colleges stay in business.

The Education Department released a statement saying that it was going to create new committees to rewrite rules covering borrower defense to repaying, or BDR, and gainful employment. BDR relieves students of all federal loans if a school used illegal or deceptive tactics to persuade students to borrow money to attend. Gainful employment requires that action be taken — including possible expulsion from the federal student aid program — against vocational programs whose graduates leave with heavy student loan debt. Ninety-eight percent of the programs that officials found to have failed to meet those standards are offered by for-profit colleges.

Parts of the gainful employment rule are already in effect. BDR was set to become effective July 1 but will now be postponed. The Education Department said that while new rules are drawn up, it will process applications under the current borrower defense rules.

A program is considered to lead to “gainful employment” if the annual loan payment of a typical graduate does not exceed 20% of their discretionary income or 8% of their total earnings. Exceeding those debt-to-earnings rates means possible expulsion from the federal student aid program.

DeVos criticized the regulations that were approved by the Obama administration, saying that they are unfair to students and schools and that they leave taxpayers with a big bill.

“Fraud, especially fraud committed by a school, is simply unacceptable,” she said in her department’s statement. “Unfortunately, last year’s rule-making effort missed an opportunity to get it right. The result is a muddled process that’s unfair to students and schools, and puts taxpayers on the hook for significant costs. It’s time to take a step back and make sure these rules achieve their purpose: helping harmed students. It’s time for a regulatory reset. It is the department’s aim, and this administration’s commitment, to protect students from predatory practices while also providing clear, fair and balanced rules for colleges and universities to follow.”

The American Federation of Teachers pushed back against the decision.

“The Trump administration’s actions today show that the White House stands with predatory for-profit schools, not the students they rip off,” it said in a statement. “About the only thing worse than ripping off students with worthless degrees from for-profit colleges is denying them help to relieve their substantial debt, and allowing the schools to continue to prey on students. Given that for-profit colleges were big donors to Trump and other Republican candidates, one wonders whether this is simply a new pay-to-play scheme at the expense of our students, including our veterans, who are much helped by the rules Education Secretary Betsy DeVos wants to eliminate.”

Not everyone in higher education opposed the administration’s move, however. The Chronicle of Higher Education reported that the United Negro College Fund and the National Assn. for Equal Opportunity in Higher Education — which represent historically black colleges and universities, or HBCUs — sent a letter to DeVos this week urging her to put a hold on the implementation of the regulations and reconsider them.

“We remain concerned about the sweeping scope of the regulation and vague standards for determining ‘misrepresentation’ that could unfairly leave HBCUs and PBIs liable for frivolous claims, unwarranted fines, and unfounded penalties,” they said in the letter. “Such provisions could result in significant costs that would divert precious resources better spent on serving the needs of students.”

The nonprofit consumer advocacy group Public Citizen and the Project on Predatory Student Lending smacked DeVos’ move, saying in a statement that she had “put the profit margins of for-profit colleges ahead of the interests of students and their families” in “a craven attempt to avoid the agency’s legal obligation” to enforce the rules. The statement cited a part of the Obama-era rules that included a ban on the use of forced arbitration clauses in many student enrollment contracts:

“These clauses require students to submit any dispute that might later arise between the students and the institution to binding arbitration, a private process with little right to appeal, instead of a court of law. The rules also provide new and long-needed protections for students asserting defenses against repayment of their federal loans based on fraud or other misconduct by the students’ schools.”

[The Los Angeles Times]

DeVos Undoes Obama Student Loan Protections

Education Secretary Betsy DeVos on Tuesday rolled back an Obama administration attempt to reform how student loan servicers collect debt.

Obama issued a pair (PDF) of memorandums (PDF) last year requiring that the government’s Federal Student Aid office, which services $1.1 trillion in government-owned student loans, do more to help borrowers manage, or even discharge, their debt. But in a memorandum (PDF) to the department’s student aid office, DeVos formally withdrew the Obama memos.

The previous administration’s approach, DeVos said, was inconsistent and full of shortcomings. She didn’t detail how the moves fell short, and her spokesmen, Jim Bradshaw and Matthew Frendewey, didn’t respond to requests for comment.

DeVos’s move comes a week after one of the student loan industry’s main lobbies asked for Congress’s help in delaying or substantially changing the Education Department’s loan servicing plans. In a pair of April 4 letters to leaders of the House and Senate appropriations committees, the National Council of Higher Education Resources said there were too many unanswered questions, including whether the Obama administration’s approach would be unnecessarily expensive.

A recent epidemic of student loan defaults and what authorities describe as systematic mistreatment of borrowers prompted the Obama administration, in its waning days, to force the FSA office to emphasize how debtors are treated, rather than maximize the amount of cash they can stump up to meet their obligations.

Obama’s team also sought to reduce the possibility that new contracts would be given to companies that mislead or otherwise harm debtors. The current round of contracts will terminate in 2019, and among three finalists for a new contract is Navient Corp. In January, state attorneys general in Illinois and Washington, along with the U.S. Consumer Financial Protection Bureau, or CFPB, sued Navient over allegations the company abused borrowers by taking shortcuts to boost its own bottom line. Navient has denied the allegations.

The withdrawal of the Obama administration guidelines could make Navient a more likely contender for that contract, government officials said. Navient shares moved higher after the government released DeVos’s decision around 11:30 a.m. New York time. Navient stock ended up almost 2 percent.

The Obama administration vision for how federal loans would be serviced almost certainly meant the feds would have to increase how much they pay loan contractors to collect monthly payments from borrowers and counsel them on repayment options. Already, the government annually spends around $800 million to collect on almost $1.1 trillion of debt. DeVos, however, made clear that her department would focus on curbing costs.

“We must create a student loan servicing environment that provides the highest quality customer service and increases accountability and transparency for all borrowers, while also limiting the cost to taxpayers,” DeVos said.

With her memo, DeVos has taken control of the complex and widely derided system in which the federal government collects monthly payments from tens of millions of Americans with government-owned student loans. The CFPB said in 2015 that the manner in which student loans are collected has been marred by “widespread failures.”

DeVos’s move “will certainly increase the likelihood of default,” said David Bergeron, a senior fellow at the Center for American Progress, a Washington think tank with close ties to Democrats. Bergeron worked under Democratic and Republican administrations over more than 30 years at the Education Department. He retired as the head of postsecondary education.

During Obama’s eight years in office, some 8.7 million Americans defaulted on their student loans, for a rate of one default roughly every 29 seconds.

Former Deputy Treasury Secretary Sarah Bloom Raskin worked on student loan policy during the latter years of the Obama administration, in part over concern that borrowers’ struggles were affecting the management of U.S. debt. DeVos’s decision to reverse some of her work “with no coherent explanation or substitute” effectively means that the Trump administration is placing the welfare of loan contractors above those of student debtors, she said.

In a statement Tuesday, Illinois Attorney General Lisa Madigan, who is suing Navient, agreed: “The Department of Education has decided it does not need to protect student loan borrowers.”

(h/t Bloomberg)

Trump Pulls Back Obama-Era Protections For Women Workers

With little notice, President Donald Trump recently signed an executive order that advocates say rolls back hard-fought victories for women in the workplace.

Tuesday’s “Equal Pay Day” — which highlights the wage disparity between men and women — is the perfect time to draw more attention to the president’s action, activists say.

On March 27, Trump revoked the 2014 Fair Pay and Safe Workplaces order then-President Barack Obama put in place to ensure that companies with federal contracts comply with 14 labor and civil rights laws. The Fair Pay order was put in place after a 2010 Government Accountability Office investigation showed that companies with rampant violations were being awarded millions in federal contracts.

In an attempt to keep the worst violators from receiving taxpayer dollars, the Fair Pay order included two rules that impacted women workers: paycheck transparency and a ban on forced arbitration clauses for sexual harassment, sexual assault or discrimination claims.

Noreen Farrell, director of the anti-sex discrimination law firm Equal Rights Advocates, said Trump went “on the attack against workers and taxpayers.”

“We have an executive order that essentially forces women to pay to keep companies in business that discrimination against them, with their own tax dollars,” said Farrell. “It’s an outrage.”

Out of the 50 worst wage theft violators that GAO examined between 2005-2009, 60 percent had been awarded federal contracts after being penalized by the Department of Labor’s Wage and Hour Division. Similar violation rates were tracked through the Occupational Safety and Health Administration (OSHA) and the National Labor Relations Board.

But the research did not reveal much about sexual harassment or sexual assault claims. That’s because forced arbitration clauses — also sometimes called “cover-up clauses” by critics — are commonly used to keep sex discrimination claims out of the courts and off the public record.

“Arbitrations are private proceedings with secret filings and private attorneys, and they often help hide sexual harassment claims,” said Maya Raghu, Director of Workplace Equality at the National Women’s Law Center. “It can silence victims. They may feel afraid of coming forward because they might think they are the only one, or fear retaliation.”

Mandatory arbitration clauses are increasingly used in employment contracts, said Raghu, who added that banning the process was an important step forward for victims of workplace harassment or assault.

Many learned about forced arbitration clauses for the first time just last year through the Fox News sexual harassment case. Fox News anchor Gretchen Carlson dodged her own contract’s arbitration clause by directly suing former CEO Roger Ailes rather than the company. Ailes’ lawyers accused Carlson of breaching her contract, and pressed for the private arbitration to try to keep the story out of courts and the public record.

A new lawsuit filed Monday by Fox News commentator Julie Roginsky joined a growing list of accusations against Ailes, and claims Roginsky faced retaliation “because of plaintiff’s refusal to malign Gretchen Carlson and join ‘Team Roger’ when Carlson sued Ailes,” NPR reported.

By overturning the Fair Pay order, Trump made it possible for businesses with federal contracts to continue forcing sexual harassment cases like Carlson’s into secret proceedings — where the public, and other employees, may never find out about rampant sex discrimination claims at a company.

After the Fox News sexual harassment problem came to light, Carlson testified before Congress about forced arbitration — and Senators Richard Blumenthal, Dick Durbin and Al Franken wrote to major arbitration companies to ask for information on the amount of secret arbitration proceedings involving sexual harassment and discrimination.

“If Ms. Carlson had followed Mr. Ailes’s reading of her contract, her colleagues might never have learned that she was fighting back,” read the August 2016 letter. “They might never have followed her example; Roger Ailes might never have been exposed; and Fox News might never have been forced to change its behavior. Decades of alleged abuse — harassment that should disgust and astound any reasonable person — could have been allowed to continue.”

Blumenthal told NBC News that Trump’s overturning the Fair Pay order sends women’s rights in the workplace back “to a time best left to ‘Mad Men.'”

“These coverup clauses render people voiceless — forcing them to suffer in silence, suppressing justice, and allowing others to fall victim in the future,” said Blumenthal. “At a time when the fight for equal pay continues, Trump also moved to eliminate paycheck transparency and leave workers to negotiate in the dark.”

The other result of Trump’s executive order on federal contractors was lifting a mandate on paycheck transparency, or requiring employers to detail earnings, pay scales, salaries, and other details. The Fair Pay order Trump overturned was one of the few ways to ensure companies were paying women workers equally to their male colleagues.

According to the Economic Policy Institute’s 2016 analysis of federal labor statistics, the median wage for U.S. women is about 16.8 percent less than the median for men — with women making about 83 cents to a man’s dollar. According to economist Elise Gould, that’s a gap that only increases as women become more educated and climb the corporate ladder.

“At the bottom, there’s just so far down women’s wages can go. They are protected by some degree by the minimum wage,” said Gould. “But as you move up, women are not occupying places at the top the way men are. The wage gap at the top is much larger.”

Wal-Mart is one example of how the wage gap works like an inverted pyramid. According to statistical data provided in Farrell’s class action lawsuit against Wal-Mart, women in lower-paying hourly jobs at the company made $1,100 less per year than men in the same jobs. But women with salaried positions were paid $14,500 less per year than their male coworkers.

The Fair Pay order made employers submit salary details to the government that would show massive wage gaps like Wal-Mart’s. It also made employers show overtime and deductions on paychecks so workers could make sure they were being paid exactly as they were supposed to.

The original class action case against Wal-Mart was dismissed by the Supreme Court. But Farrell told NBC News that Dukes v. Wal-Mart was a victory in its own right.

“The very public nature of that case prompted many changes by Wal-Mart including its pay and equity policies,” said Farrell of the law firm Equal Rights Advocates.

“No one, including workers at Wal-Mart, would have understood the issues in that case had there been forced arbitration clauses,” Farrell added, “Which would have kept all of those claims in secret.”

For the majority of workers, especially at low-wages, there isn’t an option to work around an arbitration clause the way that Carlson did with Fox News and Ailes.

“Unless you’re suing a deep-pocketed CEO, suing an individual for sexual harassment is not going to be the same as putting the employer on the hook for liability,” said Farrell. “You usually don’t get the same damages or results.”

(h/t NBC News)

 

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