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In testimony before the House
Financial Services Committee on Thursday, U.S. Public Interest Research Group praised
the centerpiece of the Obama administration's plans to reform the
financial regulatory system.
to a packed hearing, U.S.
PIRG's Consumer Program Director, Ed Mierzwinski, said he strongly endorses
the proposed Consumer Financial Protection Agency.
and their armies of lobbyists are opposing the new consumer agency and
defending the status quo," noted Mierzwinski, who has been advocating on
the behalf of consumers for three decades.
the real reason that the economy collapsed is because no agency was responsible
for protecting consumers so companies sold them risky products," he
PIRG strongly supports the proposed agency in part because of its underlying
principles of "independence, its recognition that federal law should
always serve as a floor of protection and not a ceiling, and its shared
enforcement with states" in shielding consumers from predatory lending
and other fraudulent practices by financial businesses, Mierzwinski said in his
other pro-consumer proposals by the Obama administration include new investor
protections and limits on executive compensation policies. "But if the
administration wants to give the Federal Reserve increased responsibilities as
a systemic risk regulator it must democratize it first." Mierzwinski had
a number of other suggestions to improve other parts of parts of the Obama plan
creation of the Consumer Financial Protection Agency and the other reforms
"are necessary to reform our collapsed financial system and inoculate it
against further catastrophic events," Mierzwinski added.
U.S. PIRG, the federation of state Public Interest Research Groups (PIRGs), stands up to powerful special interests on behalf of the American public, working to win concrete results for our health and our well-being. With a strong network of researchers, advocates, organizers and students in state capitols across the country, we take on the special interests on issues, such as product safety,political corruption, prescription drugs and voting rights,where these interests stand in the way of reform and progress.
"The single biggest threat to the U.S. banking system is more concentration," said the Massachusetts Democrat. "A bank as big as JPMorgan shouldn't be allowed to get even bigger."
U.S. Sen. Elizabeth Warren raised alarm about the recent sale of First Republic Bank to JPMorgan Chase—which followed a government takeover of the former—in a letter to financial regulators and a series of questions during a Thursday hearing.
"The failure of First Republic Bank shows how deregulation has made the too-big-to-fail problem even worse," the Massachusetts Democrat said after the controversial sale earlier this month. "Congress needs to make major reforms to fix a broken banking system."
Ahead of the Senate Committee on Banking, Housing, and Urban Affairs hearing, Warren wrote to two officials who appeared before the panel Thursday morning: Martin Gruenberg, chair of the Federal Deposit Insurance Corporation (FDIC), and Michael Hsu, acting head of the Office of the Comptroller of the Currency (OCC).
"The executives at First Republic—who took excessive risks and did not appropriately manage them as interest rates increased throughout 2022 and 2023—bear primary responsibility for this failure," Warren wrote in the letter, dated Wednesday. "I am continuing to seek answers from the bank's executives, and attempting to pass bipartisan legislation that would claw back their excessive compensation."
"But the outcome of this seizure and sale were deeply troubling: It resulted in a $13 billion cost to the Federal Deposit Insurance Fund—which will ultimately be passed on to ordinary bank consumers across the country—and made JPMorgan, the nation's biggest bank, even bigger," she added. "JPMorgan will also record a $2.6 billion gain from the deal."
Warren asked Gruenberg and Hsu to prepare to address the topic at the committee's hearing and also requested written responses to a series of questions by the end of the month.
"One set of questions involves the $13 billion loss to the Federal Deposit Insurance Fund, and why the fund was allowed to take this loss while the FDIC deal made nearly $50 billion worth of uninsured deposits at First Republic—including $30 billion in uninsured deposits from big banks—whole," she noted. "My second set of concerns involves the decision to choose JPMorgan—which was already the nation's largest bank—to acquire First Republic and become even bigger."
During the hearing, Warren explained that "when the FDIC sells a failed bank, the law requires that you choose the highest bidder that will result in the lowest cost to the Deposit Insurance Fund—but the law also requires signoff from the OCC, and the OCC's job, by law, is to consider whether the merger would pose 'risk to the stability of the United States banking or financial system.'"
The senator questioned Hsu about the decision to sell to JPMorgan versus PNC or Citizens Bank, given that selling to either of the latter would have posed less of a risk, based on one metric used by financial regulators that is notably influenced by bank size.
\u201cThe single biggest threat to the U.S. banking system is more concentration. I am troubled by @USOCC Acting Comptroller Michael Hsu's decision to approve @jpmorgan's acquisition of First Republic Bank. A bank as big as JP Morgan shouldn't be allowed to get even bigger.\u201d— Elizabeth Warren (@Elizabeth Warren) 1684436759
"Comptroller Hsu, your job, by law, is to determine risk to the system from making big banks even bigger, and you have a clear metric for doing that," Warren said. "So how do you explain approving a sale to a banking giant that increases the risk to the banking system by somewhere between nearly 800% and 1,400% more than selling to other bidders? Did you just ignore the fact that a failure at JPMorgan would blow a hole in our banking system... and let them grow by $200 billion?"
After insisting that "for every merger application we follow the law, we follow our guidelines, we follow our policies and procedures," Hsu said focusing only on the metric Warren cited would not have been "wise," and if that approach had been taken, "I fear that there would have been greater financial instability that weekend."
As her time expired, Warren—who was visibly frustrated by Hsu's lack of a broader explanation for choosing JPMorgan Chase—declared that "the single biggest threat to the U.S. banking system is concentration."
"We're all pushing harder for merger guidelines so that we don't get more concentration in the banking system," she told Hsu. "You are the one person who was supposed to use judgment on the question... 'Between multiple sales, which one was the right one to go with, and which one presented more risk to the banking system?'"
"According to your own metric, you chose the one that gives us more concentration in the system," the senator stressed. "I am very troubled by that decision."
"It is an exhibition of unadulterated hate and racism," said one Palestinian activist. "Beyond inflammatory."
Israeli government officials including far-right National Security Minister Itamar Ben-Gvir joined tens of thousands of ultra-nationalists participating in Thursday's inflammatory "Flag March" in occupied East Jerusalem, an event at which police and demonstrators attacked Palestinians and journalists while chanting slogans including "death to Arabs" and "your village will be burned."
Ben-Gvir, Finance Minister Bezalel Smotrich, and Transport Minister Miri Regev were among the Israeli officials who took part in the annual march, which celebrates Israel's conquest and illegal occupation of East Jerusalem in 1967.
Marcher Limor Son Har-Melech, a lawmaker from Ben Gvir's far-right Otzma Yehudit (Jewish Power) party, toldThe Times of Israel that she was participating to celebrate "our victory over the Arabs."
\u201cWhen referring to the upcoming \u201cJerusalem Day\u201d or flag day march, this is what we\u2019re talking about: an anti-Palestinian hate fest that includes attacking homes, businesses & Palestinians. It is an exhibition of unadulterated hate and racism. Beyond inflammatory. Video from 2021\u201d— Nour Odeh \ud83c\uddf5\ud83c\uddf8 #NojusticeNopeace (@Nour Odeh \ud83c\uddf5\ud83c\uddf8 #NojusticeNopeace) 1684359874
In Gaza, Israeli forces used live and "less lethal" munitions to break up a Palestinian demonstration that took place along the besieged strip's border with Israel, according toAl Jazeera.
"We will not surrender and we will continue to demand our rights and defend our occupied lands and our sanctities in Jerusalem," Palestinian protester Osama Abu Qamar told the Qatar-based news network.
The Jerusalem-based NGO Ir Amim called the Israeli demonstrations a "display of incitement, Jewish dominance, and racism."
Israeli marchers threw rocks at journalists, hitting at least two reporters in the head and wounding them, Middle East Eyereports.
\u201cUs journalists are under attack by participants in the flag march in #Jerusalem. \n\nThey cheer every time they hit us with projectiles.\u201d— \u211d\ud835\udd60\ud835\udd64\ud835\udd5a\ud835\udd56 \ud835\udd4a\ud835\udd54\ud835\udd52\ud835\udd5e\ud835\udd5e\ud835\udd56\ud835\udd5d\ud835\udd5d (@\u211d\ud835\udd60\ud835\udd64\ud835\udd5a\ud835\udd56 \ud835\udd4a\ud835\udd54\ud835\udd52\ud835\udd5e\ud835\udd5e\ud835\udd56\ud835\udd5d\ud835\udd5d) 1684421979
Middle East Eye said that marchers in Jerusalem's Old City beat Palestinian residents, and when Israeli police intervened, they assaulted Palestinian victims under attack instead of protecting them.
March participants stormed the Al-Aqsa Mosque—one of the holiest sites to both Muslims and Jews—and insulted the prophet Mohammed, who Muslims believe was the messenger of God.
Ofer Cassif, an Israeli lawmaker from the left-wing Hadash coalition, called the flag march a "violent parade presented as a joyous dance."
"Rioting gangs backed by Ben-Gvir and the fascist government are bullying Arabs to show them who's in charge, "Cassif told Haaretz. "This is disgusting Kahanism in its peak."
\u201cIsrael's right wing uses Flag Day to violently remind Palestinians each year that Israel will stop at nothing to kick them out of their own homeland.\n\nThey fly Israel's national symbol as a symbol of Palestinian exclusion.\n\nThat's apartheid.\u201d— IMEU (@IMEU) 1684421511
Cassif was referring to the Jewish supremacist movement once led by Meir Kahane, the Orthodox rabbi convicted of terrorism before being assassinated in 1990. Ben-Gvir was convicted in 2007 of incitement to racism and supporting the Kahanist terror group Kach after he advocated the ethnic cleansing of Palestinians.
There were other Israeli marches in cities and towns including Lod—known to Palestinians as Lydda—site of a 1948 massacre and death march as Jewish militias seized control of the area.
Thursday's marches came three days after, and stood in stark contrast with, Palestinians' commemoration of Nakba Day, a remembrance of the ethnic cleansing of more than 750,000 Arabs from over 400 villages—sometimes by massacres—during the foundation of the modern Israeli state in 1948. For the first time ever, the United Nations officially commemorated the Nakba.
"Today's decisions should be commended for recognizing that the rules we apply to the internet should foster free expression, not suppress it," said the deputy director of ACLU's National Security Project.
Civil liberties advocates on Thursday praised the U.S. Supreme Court for a pair of unanimous rulings that they say uphold the right to free speech on online platforms.
The high court's decisions in Twitter v. Taamneh and Gonzalez v. Google represent "a win for free expression on the internet," the ACLU tweeted.
Alongside its partners, the ACLU "filed amicus briefs in both cases urging the court to ensure online platforms are free to promote, demote, and recommend content without legal risk in order to protect political discourse, cultural development, and intellectual activity," the group noted in a statement.
"Free speech online lives to fight another day," said Patrick Toomey, deputy director of ACLU's National Security Project. "Twitter and other apps are home to an immense amount of protected speech, and it would be devastating if those platforms resorted to censorship to avoid a deluge of lawsuits over their users' posts. Today's decisions should be commended for recognizing that the rules we apply to the internet should foster free expression, not suppress it."
According to ACLU's statement:
In Twitter v. Taamneh, the plaintiffs claimed that Twitter was liable for allegedly "aiding and abetting" an attack in Istanbul by ISIS because Twitter failed to adequately block or remove content promoting terrorism — even though it had no specific knowledge that any particular post furthered a terrorist act. The court held that hosting, displaying, and recommending videos, without more, is not aiding and abetting terrorism.
As the ACLU's amicus brief in Twitter v. Taamneh explained, if the Supreme Court allowed the 9th U.S. Circuit Court of Appeals' startlingly broad interpretation of the Anti-Terrorism Act to stand, online intermediaries—like internet service providers, social media platforms, publishers, and other content distributors—would be forced to suppress the First Amendment-protected speech of many of their users. The brief explained that, given the vast scale of speech occurring on platforms like Twitter every day, online intermediaries would be compelled to use blunt content moderation tools that over-restrict speech by barring certain topics, speakers, or types of content in order to avoid claims that they went too far in making that information available to an interested audience. Even today, platforms frequently take down content mistakenly identified as offensive or forbidden, for example, by confusing a post about a landmark mosque with one about a terrorist group.
In Gonzalez v. Google, the court noted that in light of its decision in Twitter v. Taamneh, "little if any" of the plaintiffs' case remained viable. It was therefore unnecessary to address the question of whether Section 230 of the Communications Decency Act immunized the platform's recommendation algorithms. The court remanded the case to the 9th U.S. Circuit Court of Appeals to determine whether any part of the plaintiffs' argument could move forward in light of the Twitter ruling.
David Greene, director of civil liberties at the Electronic Frontier Foundation (EFF), also welcomed the court's rulings in both cases.
EFF is "pleased that the court found that an online service cannot be liable for terrorist attacks merely because their services are generally used by terrorist organizations the same way they are used by millions of organizations around the globe," Greene said in a statement.
He added that EFF is "pleased that the court did not address or weaken Section 230, which remains an essential part of the architecture of the modern internet and will continue to enable user access to online platforms."
Section 230 is a federal liability shield that generally prevents social media and other websites from facing defamation lawsuits or being held accountable for third-party content generated by users or paid advertisers. The immunity provision has come under increased scrutiny from many members of Congress in both major parties.
One countervailing opinion about the court's decision to not reexamine Section 230 came from the Real Facebook Oversight Board, a coalition of researchers and advocates who seek to counter the harms associated with the profit-maximizing algorithms used by Facebook and Instagram, both of which are now owned by Meta.
"Meta wasn't on trial today in the Supreme Court, but their rapacious business model was," the group said in a statement. "In no surprise, the extremist U.S. Supreme Court chose profit over privacy and safety. More than ever, U.S. lawmakers must act to pass sweeping, meaningful regulation of Big Tech—before more users are harmed or worse by hate speech that platforms won't and can't stop."
Sen. Ron Wyden (D-Ore.), however, echoed the assessment shared by the ACLU and EFF, calling the court's decision to leave Section 230 untouched "good news."
"Despite being unfairly scapegoated for everything wrong with the internet, Section 230 remains vitally important to protecting online speech," argued Wyden, who co-wrote the 1996 statute with former Rep. Chris Cox (R-Calif.). "My focus remains helping end abusive practices by tech companies while protecting freedom of information online."
According toPolitico, the high court's decisions "mark a major win for the tech industry, which has argued that narrowing Section 230 could be disastrous for the internet if platforms could be sued over content-moderation decisions. But the resolution leaves the door open to future showdowns—potentially in Congress—over the breadth of the legal protection the internet firms enjoy."