The Consumer Financial Protection Bureau, as conceived by Sen. Elizabeth Warren and created by Congress in the wake of the 2008 financial crisis, was designed to protect American consumers from the worst excesses of the financial industry. In little more than two years, the Trump administration has made a mockery of that mission. The agency now works to safeguard the predatory payday loan industry instead of the consumers they’re supposed to protect. The New York Times’ Nicholas Confessore takes an in-depth look at how former agency director (now White House acting chief of staff) Mick Mulvaney worked to unravel a groundbreaking rule meant to make payday lenders more accountable.
When Mulvaney took over, the fledgling C.F.P.B. was perhaps Washington’s most feared financial regulator: It announced dozens of cases annually against abusive debt collectors, sloppy credit agencies and predatory lenders, and it was poised to force sweeping changes on the $30 billion payday-loan industry, one of the few corners of the financial world that operates free of federal regulation. What he left behind is an agency whose very mission is now a matter of bitter dispute. “The bureau was constructed really deliberately to protect ordinary people,” says Lisa Donner, the head of Americans for Financial Reform. “He’s taken it apart — dismantled it, piece by piece, brick by brick.”
Partisan fights over education funding
There is near-unanimous support at the Capitol for a $1,000 per year raise for public school teachers and $500 for school support workers. But that’s where the comity ends. Last week the House Education Committee voted along party lines to reject the recommendation of the Board of Elementary and Secondary Education to give $39.5 million to local school districts for help with the rising cost of employee benefits and other expenses. The Advocate’s Mark Ballard explains why that funding is important:
Once upon a time, the MFP went up 2.75 percent each year to cover cost of living increases. During the Jindal years, however, those annual hikes ended. At the same time, with the state’s economy struggling and parents being laid off, the generally free-to-attend public schools saw more students, largely at the expense of tuition-charging private and parochial institutions. When the MFP doesn’t include money to cover inflation, school boards must divert dollars from the classroom to pay for more expensive gasoline, jacked-up health insurance premiums and other higher costs. As it is, the first quarter of every dollar goes to pay pension expenses. And the increased pay teachers receive also will increase their benefits upon retirement.
Sales tax holidays are a bad idea
Sales tax “holidays” don’t increase economic growth and they don’t increase consumer spending. Instead, by temporarily suspending the state sales tax on items such as guns, school supplies or hurricane-preparedness materials, they simply shift the timing of when consumers make certain purchases. Still, sales tax holidays are popular with politicians – especially in election years. The inimitable Jim Beam, of the Lake Charles American-Press, writes that there are better alternatives:
A 2015 tax study done for the Legislature by LSU and Tulane University economists had three sales tax reform recommendations: 1. Eliminate many of the sales tax exemptions, some of which legislators did last year for seven years. Tax-free holidays were among that number. 2. Expand the sales tax base to include personal services. 3. Create a uniform system for collecting state and local sales taxes, which it has decided to do only for online sales. States don’t have to establish sales tax holidays. If they boost sales, businesses can sponsor them on their own. Stine’s which has 11 locations in Louisiana and Mississippi, and other retail businesses have successfully sponsored sales tax holidays when they pay all of the local and state sales taxes.
‘Social equity’ in Fresno
The working-class city of Fresno, Calif., – particularly the city’s historically black west side – has been hit hard by the war on drugs. With recreational marijuana now legal in the Golden State, city officials are trying to make sure that the financial benefits of legalization flow to those who have suffered the negative consequences of prohibition. But it hasn’t been easy, as The Washington Post’s Scott Wilson reports:
The competition for lucrative retail licenses has been fierce since California voters decided in 2016 to make marijuana legal for recreational use. But Fresno is behind the curve when it comes to cannabis, making it a contested front in the push to ensure the benefits of legal marijuana accrue to those who suffered most in the war on drugs. … Driven by a state government dominated by Democrats, California is undertaking a broad revisionist appraisal of its criminal justice system, particularly its malign effects on millions of people of color. The debate about marijuana retail licenses here in the state’s fifth-largest city reflects the principles of social reparations that have underpinned the public policy discussion in some larger cities for months. Marijuana legalization was always supposed to mean more than a new stream of tax revenue and a less-stressful way for adults to get high. But using the emerging industry to correct past wrongs — a policy prescription known as social equity — has proven difficult even in left-leaning cities such as Los Angeles, San Francisco and Oakland.
Number of the Day
$2.1 million – The amount of money raised, as of Saturday, to help rebuild three historically-black churches in St. Landry Parish that were burned down recently. The funds were raised via a GoFundMe page started by a Lafayette resident whose Tweet went viral. (Source: Nola.com/The Times-Picayune)