Financial regulation

  • July 31, 2015
    Video Interview

    by Nanya Springer

    In the current political climate, the idea that Congress should pass legislation redistributing wealth and resources is met with abhorrence by conservatives and, often, with apathy by liberals. This was not always the case, argues William Forbath, Associate Dean for Research and Lloyd M. Bentsen Chair in Law at the University of Texas School of Law. At one time, liberals widely viewed economic inequality as a constitutional issue and believed redistributive measures were not only permissible, but constitutionally required to ensure the equal protection of the laws and to promote the general welfare.

    In an interview with ACSblog, Forbath explains that today’s liberals have come to think the Constitution does not speak to the redistribution of resources. This contradicts the views of key historical lawmakers who discussed anti-trust, banking, currency and trade as constitutional issues and who viewed Congress as constitutionally obliged to promote the country’s broad economic wellbeing through redistributive policies. Forbath adds that even before the Equal Protection Clause appeared in the federal Constitution, state constitution guarantees of equal protection focused on protecting the poor from legislation that favored economic elites. “The Constitution needs safeguards against oligarchy,” he asserts. “Ours is an anti-oligarchy Constitution.”

    Noting America’s shrinking middle class and diminishing equality of opportunity, Forbath concludes that “these older generations were right . . . You can’t keep a constitutional democracy or a republican form of government with boundless inequality. You can’t keep it without a broad middle class. You can’t keep it alongside an oligarchic, entrenched economic elite.” Instead he, along with fellow University of Texas Law Professor Joseph Fishkin, promotes a return to the idea that we have a “Constitution of opportunity” ― one that supports a robust middle class and ensures opportunity for all, not just the privileged.

    Watch the full interview here or below.

     

  • May 1, 2015
    Guest Post

    by Rena Steinzor and Thomas McGarity, past presidents and founders of the Center for Progressive Reform. Steinzor is a professor at the University of Maryland Carey Law School, and McGarity is a professor at the University of Texas Law School. Steinzor is author of Why Not Jail? Industrial Catastrophes, Corporate Malfeasance, and Government Inaction. McGarity is author of Freedom to Harm: The Lasting Legacy of the Laissez Faire Revival.

    With the announcement that GM Chief Executive Officer Mary Barra received the outsized compensation of $16.2 million in 2014, what should have been a year of humiliation and soul-searching for that feckless automaker instead ended on a disturbingly self-satisfied note.  Purely from a public relations perspective, Barra worked hard for her money.  Appearing repentant, sincere, and downcast, she persuaded star-struck members of Congress that the company was committed to overhauling a culture characterized by what she called the “GM shrug,” loosely translated as avoiding individual accountability at all costs.  Even as she blinked in the television lights, GM fought bitter battles behind the scenes to block consumer damage cases and exploit corporate tax loopholes.

    Largely on the basis of her political adeptness, Barra has been taking victory laps in the business press, hailed as the rare (female) CEO who has led her corporation out of a morass that could happen to anyone.  This performance and the accolades it inspired provide a troubling coda to what was a destructive year for American drivers.  Dubbed “the year of the recall,” automakers recalled an unprecedented 64 million vehicles ‒ about one in five cars on the road; GM led with 26 million of this total.

    To restore justice to GM’s beleaguered customers – and the scores of families who lost loved ones in crashes caused by the defective switch – we can only hope that the Justice Department’s criminal investigation of the company and its senior executives results in prosecutions that could offset the unjust favors the legal system is already prepared to bestow.

  • June 5, 2014

    by Jeremy Leaming

    Likely the most powerful court decision so far this year involving the Employee Retirement Income Security Act (ERISA), the U.S. Court of Appeals for the Eighth Circuit found that employers of a technologies company breached a fiduciary duty to take action to protect employees’ 401(k) plans from hidden fees that, as The New York Times has reported, can significantly harm workers’ retirements.

    In the case, Tussey v. ABB, Inc., a three-judge panel of Eighth Circuit largely agreed with a lower court opinion that the technologies company mishandled their employees’ 401(k), breaching fiduciary duties as detailed in ERISA.

    Writing for the majority opinion, Chief Judge William Jay Riley, citing 8th Circuit precedent, wrote that ERISA “imposes upon fiduciaries twin duties of loyalty and prudence, requiring them to act ‘solely in the interest of [plan] participants and beneficiaries’ and to carry out their duties ‘with care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims.’”

    Reporting for The New York Times, Gretchen Morgenson, wrote that the “significance of this ruling extends far beyond ABB. It sends a powerful message to plan sponsors everywhere: if you think you’ve done your fiduciary duty simply by offering low-cost funds as investment options, think again.”

    In late May, the entire 8th Circuit refused to rehear the three-judge panel’s ruling in Tussey. The Tussey opinion is available here.  

  • February 12, 2014
     
    Writing for Bloomberg, distinguished Harvard Law School professor Cass R. Sunstein objects to the “originalist” approach to constitutional interpretation. Sunstein reveals originalism’s “alluring siren’s call” and why “our constitutional tradition has been right to resist it.”
     
    Today, members of the Privacy and Civil Liberties Oversight Board will testify before the Senate Judiciary Committee regarding their report on the National Security Agency’s bulk collection of phone records. Jennifer Granick of Just Security offers eight important questions Congress should be asking the PCLOB about the controversial surveillance tactics under section 702 of the FISA Amendments Act.
     
    Last year, the Internal Revenue Service proposed new rules regulating political speech for select nonprofit organizations. Reporting for the ACLU’s Blog of Rights, Gabe Rottman and Sandra Fulton explain why these rules “create the worst of all worlds.”
     
    At the NAACP, U.S. Secretary of Health and Human Services Kathleen Sebelius and NAACP Senior Director of Health Programs Shavon Arline-Bradley celebrate Black History Month with a discussion about the Affordable Care Act.
     
    NPR’s Carrie Johnson notes Attorney General Eric Holder, Jr.’s call for 11 states to repeal laws prohibiting current or formerly convicted felons from voting
  • February 5, 2014
     
    JPMorgan Chase has agreed to pay the U.S. government $614 million to settle its defective loan case. Announced Tuesday, the deal settles claims stemming from JPMorgan’s approval of unqualified home mortgage loans since 2002. NPR reports on the legal ramifications being felt by the world’s biggest banks.
     
    The U.S. Department of Transportation is designing new “Vehicle to Vehicle” communication technology that would help prevent traffic accidents. Reporting for the ACLU’s Blog of Rights, Jay Stanley discusses the privacy implications surrounding the new technology.
     
    Herbert Smulls, a convicted inmate in Missouri, was executed before his final stay was denied last week by the U.S. Supreme Court. Andrew Cohen at The Atlantic reports on what went wrong and reveals a “breach in ethics and in the law.”
     
    Daphne Eviatar at Just Security addresses the issues surrounding drone technology and what must be done to guarantee that its use remains within the law.
     
    Writing for The Root, Henry Louis Gates Jr. provides a brief history of Black History Month and its founder, Dr. Carter G. Woodson.