Posts tagged ‘Kirsten Gillibrand’

Gillibrand Proposes Data Protection Agency

Data protection is the legislative equivalent of the weather: everyone talks about it but no one does anything about it. So I was pleased to see that Senator Gillibrand unveiled a bold proposal yesterday to create a Data Protection Agency.

As of ten minutes ago the text of the bill was not yet available online but, according to her press release the DPA’s core responsibilities would be giving Americans greater control of their own data by creating and enforcing data protection rules—ensuring fair competition “within the digital marketplace” and preparing America for the Digital Age by advising Congress on emerging privacy and technical issues. This last proposal is a bit unsettling since I kind of thought that Congress knew we were already in the Digital Age and was reading up about it.

You don’t have to be Nostradamus to figure out that the agency would promulgate a California/European regulatory regime on companies and crackdown on potentially anti-competitive practices of Facebook, Google and Amazon. It would be overseen by a Director serving a five year term.

Now it’s way too early to say whether this is a good or bad idea. But let’s be honest, given the current political divide in Congress, this proposal has as much chance of becoming law any time soon as Donald Trump does of giving up tweeting for Lent. But in the eight years since U.S. Attorney for the Southern District in New York, Preet Bharara, warned of a WWII style cyber-attack against this country, the situation has only gotten worse, not better. We’ve grown so used to the idea of cyber breaches that news that the Chinese government stole personally identifiable information from almost half of America’s citizens is met with a shrug. Anything that wakes us up and gets us talking about taking on data protection issues on a national level is a step in the right direction even if some of the specifics need to be refined.

On that note, enjoy your Presidents’ Day Weekend. I will be back on Tuesday.

February 14, 2020 at 9:09 am Leave a comment

You Should Know About These Cases

ADA Suit Another Victory for Credit Unions

Credit unions got another important legal victory yesterday when the Court of Appeals for the Sixth Circuit held that persons outside of a credit union’s field of membership did not have authority to sue a Michigan credit union for alleged ADA website violations. The decision is the third by a federal circuit appellate court to make such a ruling, further solidifying a defense for all credit unions facing these lawsuits.

I am going to assume that if you read this blog, you know the basic arguments and issues involved. I will only reiterate what I always reiterate when it comes to these ADA cases. Most importantly, if a member from within your field of membership was to bring a lawsuit alleging a website ADA violation, these cases would not offer a defense to the claim. In addition, these cases do not address the ultimate issue, which is whether or not the ADA mandates that websites be accessible to disabled persons.

Beware of Overdraft Cases with a Twist

A few months ago, I highlighted a lawsuit that was filed against a New York credit union that offered a new twist on the ubiquitous overdraft fee litigation that has been brought against credit unions and banks for a few years now. In the more traditional overdraft litigation, the issue is whether or not the financial institution has accurately described the method it will use to determine when there are insufficient funds in an account, triggering an overdraft. This is the difference between a ledger balance and available balance method of determining availability. Either approach is acceptable, but must be properly disclosed.

Many of your members enter into agreements with businesses whereby the businesses are allowed to make ACH withdrawals from their accounts on a monthly basis. While credit unions properly disclose that these payment requests may result in NSF charges, what happens when the business sends out repeated ACH payment requests seeking the same payment? The litigants are arguing that repeated NSF charges for the subsequent transactions are not authorized by the account agreements. Much of this litigation is just starting, but I have read a couple of complaints. Bottom line, this is one you should definitely run by your attorney, especially if your credit union is large enough to be an attractive class action target.

Gillibrand Announces She’s Dropping Out: Did You Know She Dropped In?

New York Senator Kirsten Gillibrand became the latest candidate to announce she was dropping out of the ludicrously overcrowded field of democrats lining up to take on President Trump in 2020. You know your presidential campaign did not get off the ground when most people did not realize you were running until you announced you were ending your campaign.

My Unsolicited Sports Recommendation

It’s been a while since I made a totally unrelated sports comment in my blog, but yesterday the Meier brothers went to Queens to watch third round US Open tennis. I know many of the blog’s readers are sports fans, and this is certainly something I would put on your sports bucket list, even if you are just a mildly interested tennis fan. It’s a great environment, and you can jump in and out of several matches if you go early on in the tournament.

On that note, peace out.

August 29, 2019 at 9:15 am Leave a comment

Post Office Should Deliver Mail, Not Loans

Recently, New York’s Junior Senator, Kirstin Gillibrand, outlined a proposal allowing the post office to provide banking services to the underserved. The Senator is widely believed to be positioning herself for a run at the Presidency. In a field of candidates that would make Eugene Debs proud. Consequently, this has more to do with political posturing. Still, this proposal has been germinating for a while. In fact, the post office was authorized to provide basic account services up until 1967. But there’s something about the underlying logic of this idea that disturbs me. Credit unions already can provide many other services that post office advocates are in favor of and could do even more if politicians like the Senator strongly advocated for giving credit unions more flexibility to help the underserved even more.

The first time I took a serious look at the post office bank idea was when the post offices’ own Inspector General released this white paper explaining how this struggling government institution could help the underserved. The argument is, that with so many postal branches, banking services would be within reach of any individual regardless of where they lived. This has a certain facial appeal. After all, bank branches are endangered species in many rural parts of this country. But in the age of the internet, no one lacks access to basic financial services because of physical proximity. In contrast, if credit unions were given more flexibility to serve a community of people joined together by the internet there would be more financial services available to everyone immediately.

The second major reason for post office banking put forward by its supporters is that this would somehow provide an alternative to pay-day loans. Leaving aside the fact that this is the same organization that can’t keep the price of a stamp from rising many times faster than inflation, this argument makes no sense. After all, the post office has no training in the type of intricate underwriting these loans require.

I guess postal branches could team up with local bank branches and credit unions but then how cost effective would such a model be?

Call me cynical but the end result of postal branches providing short term loans would be a de facto government consumer bank. This would be an end result that would be in no one’s interest. For all its faults, consumer banking has worked pretty well. In part because credit unions are allowed to provide consumers a cost effective alternative. If you want more consumer choice, the key is to unleash the power of credit unions, not your local mailman.

 

May 1, 2018 at 11:38 am Leave a comment

Independent Bankers Need Reality Check

Further evidence that the Independent Community Bankers of America have developed an Ahab-like obsession with destroying the credit union industry is provided by the press release they sent yesterday laying out their legislative agenda for the coming year.  You would think that an organization representing smaller banks across the nation would have plenty of major operational concerns such as fighting excessive regulations and keeping an eye on mortgage reform.  Silly me.  Instead, their second priority is to destroy the credit union industry.  To be fair, what they actually say is that they want Congress to address “the unfair tax and regulatory disparity between taxpaying community banks and tax-exempt credit unions while opposing credit union mission creep.”

It must be comforting to think that if only credit unions would change their tax status, the problems facing financial institutions in this nation would go away.  But it is that kind of thinking that gets Hollywood stars on the cover of The National Inquirer.  Right before they get whisked away to rehab.  

Speaking of taxes, one of their priorities includes expanding the authority of subchapter S corporations to issue preferred stock. According to the IRS,  S corporations are corporations that elect to pass corporate income, losses, deductions and credit through to their shareholders for federal tax purposes.  In other words, the independent community bankers are  criticizing the tax exempt  status of credit unions while seeking to maximize their own ability to avoid paying corporate  taxes.

FOMC issues upbeat statement on the economy

The Fed’s Open Market Committee’s cautiously optimistic statement about the economy yesterday can be translated as giddy when you cut through the Fed-speak.  The economy is expanding and the unemployment rate is continuing to decline, albeit gradually, and the Fed doesn’t see gasoline prices as being a long term risk to the economy at this point.  The Fed held firm to its commitment to keep interest rates low through 2014.

Politics

New York Democrats have one more reason to wake up angry with Anthony Weiner this morning.  Republican Bob Turner, who won the heavily Democratic Queens Congressional seat Weiner vacated when his cutting edge use of social media was exposed to the public, threw his hat into the ring for the Republican Nomination to run against Kirsten Gillibrand.  Turner’s relatively high profile makes him the greatest potential threat as the Senator seeks her first full term.  She apparently agrees as she took no time in labelling Turner a Republican “extremist.”

March 14, 2012 at 7:18 am 1 comment


Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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