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By Manuel Madrid | Feb 08, 2017
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.
By Manuel Madrid | Feb 01, 2017
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.
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.”