Manuel Madrid

Manuel Madrid is a writing fellow at The American Prospect

Recent Articles

GOP Pushes to Repeal Regulations on Prepaid-Card Companies

Republican legislators have moved to repeal a rule constraining prepaid–debit card companies before the rule can take effect, marking the latest effort in their recent campaign of widespread deregulation.

Seven GOP senators—led by David Perdue of Georgia—and four representatives—led by Tom Graves, also of Georgia—filed identical resolutions in the Senate and House of Representatives last week, invoking an obscure law called the Congressional Review Act to smother a proposed Consumer Financial Protection Bureau (CFPB) rule before it can be enacted.

The CFPB rule, scheduled to take effect in October, would provide safeguards for those who use prepaid cards, which are similar to debit cards but are preloaded with a designated amount of money by the cardholder. The rule would require providers to disclose hidden fees and protect against loss, theft, and unauthorized charges. The rule would also force prepaid-card companies to limit overdraft fees.

NetSpend, a division of the Georgia-based Total System Services (TSYS), is the only major provider of prepaid cards that has overdraft fees and, as such, is the biggest apparent beneficiary of the GOP move. The prepaid-card provider, which has lambasted the rule as “onerous,” announced in an October earnings call that it expected to lose $80 million to $85 million each year in overdraft fees, comprising 10 percent to 12 percent of its current revenue, as a result of the CFPB rule.

“It is outrageous that Congress may block basic fraud protections on prepaid cards so that NetSpend can keep gouging struggling families with overdraft fees that have no place on prepaid cards,” Lauren Saunders, associate director of the National Consumer Law Center (NCLC), said in a statement.

In 2016, parent company TSYS donated thousands of dollars to the Senate and House campaigns of the Georgia Republicans and also contributed to the campaign of Senator Ron Johnson of Wisconsin, another co-sponsor of the repeal resolution.

The resolution would give NetSpend a reprieve from federal scrutiny of its business practices. The company is currently in the middle of a legal battle with the Federal Trade Commission over deceptive marketing allegations.

Under the Congressional Review Act, which allows federal lawmakers to eliminate recently finalized rules with a simple majority vote in both chambers, the resolution would still require presidential approval. President Trump, who promised to “do a number” on Dodd-Frank, the Wall Street reform law, has shown a penchant for deregulation and would seem a safe bet to sign off on such a resolution.

The Republican push to gut the CFPB rule comes as more and more Americans are giving up on traditional banks and relying more on alternative payment methods like prepaid cards. In 2015, 7 percent of U.S. households, or about 15.6 million adults and 7.6 million children, didn’t have a bank account at all, according to the Federal Deposit Insurance Corporation. Prepaid cards are most popular among low-income people who can’t qualify for a credit card. Even consumers with good credit histories sometimes turn to prepaid cards to avoid high overdraft fees, thereby sacrificing the legal safeguards that come with conventional banking. If the GOP repeal plan is successful, they’ll get the worst of both worlds. 

A Price Confirmation Would Continue Obstruction of Gun Violence Research

The prospects for reinvigorating gun violence research could become even more remote. Federal funding for studies into gun violence and gun-related deaths has effectively been frozen for the last two decades, a worrying trend that looks to continue under a Trump administration and a Republican-controlled Congress, especially if the Senate confirms Representative Tom Price, President Trump’s nominee to head the U.S. Department of Health and Human Services.

Critics have taken on Price, an outspoken gun-rights advocate and conservative spending hawk, on a wide array of issues throughout his confirmation hearings, but his ardent support of gun rights has flown under the radar.

“Guns are used more often to protect lives, not take lives,” the Georgia Republican told Georgia’s Marietta Daily Journal last year. “Steps to remove firearms from the hands of law-abiding citizens endanger those very citizens.”

The 1996 Dickey Amendment blocked Centers for Disease Control and Prevention (CDC) funds from being “used to advocate or promote gun control.” Since Congress passed the Consolidated Appropriations Act of 2012, a similar rule has also applied to the National Institutes of Health (NIH). Price, who received an “A” rating from the NRA’s Political Victory Fund and a 90 percent approval rating from Gun Owners of America, has previously pushed to cut funding from both the CDC and NIH.

Jay Corzine, a University of Central Florida sociology professor who studies violent crime, insists that gun violence research is essential to mitigating gun-related deaths and that federal gun policies should be based on the best research available, not party politics. “It’s a mistake for lawmakers to restrict other federal agencies’ abilities to invest money in types of research that they see as meeting a national need,” says Corzine.

As head of the HHS, Price could shift how the agencies spend funds and curtail research or steer studies in other directions. That doesn’t augur well for new inquiries in this cash-strapped field. 

A recent Journal of the American Medical Association study found that gun violence research funding lagged behind investigations into other causes of death by billions of dollars.

(Source: Journal of the American Medical Association)
 

David Stark, a co-author of the study, aimed to find out how congressional restrictions affected research into gun-related deaths. Stark noted that had federal research funding been linked to the actual gun violence death toll, gun researchers would have received about $1.4 billion between 2004 and 2014, but they only received $22.1 million. Gun violence killed nearly ten times more people than fires, but research efforts received nearly $1 billion less in funding.

“No one would say that the intent of traffic safety research was to eliminate automobiles from the road,” Stark told The Trace. “No one is necessarily saying that the intent of gun violence research is to eliminate guns.”

Following the 2012 Sandy Hook Elementary School shooting, President Barack Obama issued an executive order to end the freeze on gun violence research. However, with Congress continuing to block dedicated funding, the executive order has largely failed in resuscitating any new research. The congressional funding restrictions have also spilled over into academia. “Graduates gravitate to a field where there’s funding,” says Corzine. “If there is less funding, [they] will go elsewhere.”

Having secured the backing of the NRA early on in the presidential campaign season, Trump is unlikely to request funding for new research. Despite calls from Democrats, academics, doctors, the American Medical Association, and even former congressman Jay Dickey of Arkansas (the Dickey Amendment’s author) to eliminate these restrictions, Corzine does not hold out hope that the situation will change anytime soon.

“There might be movement to loosen up [gun] control [restrictions],” Corzine says. “But in terms of movement towards research, I just don’t see that happening.” 

Trump’s Private Security Force: an Operational and Legal Swamp

Trump's precendent-breaking decision to retain a private security force raises troubling questions about transparency and accountability. 

AP Photo/Gerald Herbert
AP Photo/Gerald Herbert Security personnel surround Republican presidential candidate Donald Trump as he greets supporters after speaking at a campaign event in Tampa, Florida. P resident-elect Donald Trump doesn’t seem to tire of setting new precedents. Despite being provided with a newly bolstered Secret Service detail after the election, the president-elect has retained his own private security and intelligence force, breaking with tradition and creating operational and potentially legal problems. Last month, Trump spokesman Jason Miller responded to a Politico article citing supposed fault lines between Secret Service agents and members of Trump’s private security team, calling it “wildly out of proportion.” Yet Miller confirmed that Trump will continue to be surrounded by “longtime allies and advisers.” Among those is Keith Schiller, a former New York police detective who has worked as Trump’s bodyguard for 17 years and recently as his head of security during the campaign. For...

Sanders Supporters See Some Silver Lining in Trump Victory

A Washington, D.C., rally to celebrate the death of the Trans-Pacific Partnership turned into a shout-out to progressives the moment Bernie Sanders took the stage just outside the U.S. Capitol, where hundreds had converged Thursday to catch a glimpse of their hero.

“I’m not here to blame anybody, criticize anybody, but facts are facts,” the one-time presidential candidate said, detailing sobering election losses up and down the ballot. “It’s time for a new direction for the Democratic Party.”

Donald Trump’s surprise win brought unexpected energy to the rally. What would’ve likely been a giant victory lap for progressives had Clinton been victorious, ended up as a lively post-mortem instead. Sanders admitted he didn’t have the slightest doubt that Trump’s promise to take on the establishment was what got him so many votes. “One of the reasons that he [Trump] won is, in my view, a failure of the Democratic Party that must be rectified,” he said, as the crowd cheered and chanted, “Bernie! Bernie! Bernie!”

That failure, according to Sanders, was neglecting working-class voters. Hillary Clinton lost the election in large part because of a drop in support in states that have substantial blue-collar populations, including Pennsylvania, Ohio, Michigan, Wisconsin, and Iowa. Some wonder whether the Obama administration’s bullishness on the Trans-Pacific Partnership made things worse. “I’ve left the open the question whether or not the administration’s push for a lame-duck vote and getting people dispatched all over the country and all over the world, saying we were going to move on this,” said U.S. Representative Rosa DeLauro, a Connecticut Democrat. “You have to question whether or not that resulted in the loss of the Rust Belt states.”

Buzzards now circle above the trade deal, which isn’t dead yet, but will be soon after Donald Trump’s inauguration: He has promised to kill the TPP in his first 100 days. Trump isn’t exactly the hangman progressives expected, but the imminent death of the trade deal is one silver lining for opponents of the accord.

Another is the chance to reshape the Democratic National Committee. Larry Cohen, former president of the Communication Workers of America, says the political vacuum left by the election could be an opportunity for progressives to gain more influence in the Democratic Party. On Wednesday, Senate Minority Leader Chuck Schumer unveiled the party’s new leadership team, which included Bernie Sanders as the director of outreach. Progressives are eyeing leadership positions on the Democratic National Committee as well. “[Minnesota Representative] Keith Ellison is an amazing leader,” said Cohen. “He’ll know how to handle the job.”

Kim Kamens, a Sanders supporter who runs a custom wood and metal design, architectural, and technology manufacturing business with her husband in Philadelphia, is eager to see change at the DNC, which she calls an “antiquated fundraising machine.” Kamens has seen more and more full-time workers forced into temporary manufacturing jobs. “The working class was left out of the Democratic agenda,” Kamens said. “It feels like Democrats have lost touch with the American people.”

National Nurses United co-president Jean Ross agrees. “The message of incremental change is not going to work for working-class Americans,” she says. “We need to change the message, not tweak it.” The NNU endorsed Sanders early on in the primaries, but refused to endorse Hillary Clinton in the general, even after Sanders did. Ross has no regrets on not endorsing Clinton. “Our integrity is intact — Bernie’s our guy.”

New Report Examines How Country’s Largest Banks Finance the Private Prison Industry

When Donald Trump won and private prison stocks surged, an unexpected cheer came from downtown Manhattan. It’s a great time to be in the jail business.

A new report by the progressive advocacy group In the Public Interest reveals the troubling ties between Wall Street and the private prison industry, including hundreds of millions of dollars in loans and revolving credit. Shares of the private prison industry’s two biggest companies, CoreCivic (formerly known as Corrections Corporation of America) and GEO Group, rocketed after Trump’s win. Bondholders on Wall Street, who raked in tens of millions in interest payments from CoreCivic and GEO Group in 2015, seem confident that Trump will make good on his campaign promises of mass incarceration and deportation.

Last year, the industry’s two biggest companies, CoreCivic (formerly known as Corrections Corporation of America) and GEO Group, reported $1.79 billion and $1.84 billion in revenue, respectively. Of the many Wall Street banks involved in financing the growth and expansion of private prisons, ITPI noted that six represent the majority of those investments: Bank of America, JPMorgan Chase, BNP Paribas, SunTrust, U.S. Bancorp, and Wells Fargo.  

According to the report, the banks underwrote bonds for CoreCivic and GEO Group and helped finance them through a combination of term loans and hundred of millions of dollars in revolving credit. This financing allowed the companies to expand and gave the banks a sweet return on their initial investments.

GEO Group and CoreCivic have long since been reading the writing on the wall for private prisons. They figured the “tough on crime” mindset was on its way out and spent years expanding into “community services” like halfway homes and electronic monitoring devices, thanks to their Wall Street financing. To stem the growth of the private prison industry, ITPI wants to see shareholders and other clients of these banks like universities, municipalities, and states pressure bank officials to stop extending revolving credit, awarding term loans, and underwriting bonds to these private prison companies—if bank officials do not move to do so themselves.

Meanwhile, prison divestment campaigns around the country have dug in their heels. “We can’t rely on the federal government,” says Enlace deputy director Amanda Aguilar Shank, who helped organize Portland, Oregon’s Prison Divestment Campaign. “We need to have local elected officials stepping up with the community and taking protective measures. Portland could be the first city in the country to completely divest from banks like Wells Fargo and JPMorgan Chase

In the face of a likely resurgence of interest in the industry, prison divestment advocates are also turning their attention to local institutions. Last year, Columbia University became the first university in the country to divest from private prisons, selling all of its CoreCivic shares in response to a student activist campaign. A few months later, the University of California followed its lead. #ForgoWells is a budding coalition of divestment advocates who have condemned Wells Fargo’s “destructive and extractive” investments in for-profit prison companies. “It doesn’t matter if you’re a Trump voter or a Clinton voter,” says Jeff Ordower, who works with the #ForgoWells campaign “This is a bipartisan movement to hold the banks accountable for what they’re doing.”

Private prisons, which account for 6 percent of state and 16 percent prisoners in the country, have been lambasted by critics for their understaffing and poor medical care as well as their high rates of recidivism. Yet, the future of private prisons was at risk not too long ago. In August, the U.S. Department of Justice announced it would begin phasing out the use of private prisons. However, this decision could be easily rolled back by the incoming Trump administration. In addition to deporting undocumented immigrants, Trump, who ran as a “tough on crime” candidate, has promised to reduce “surging crime, drugs and violence” and boost funding for police and federal law enforcement agencies. 

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