Press Releases

WASHINGTON, D.C. – Today, U.S. Senators Tim Kaine (D-VA), David Perdue (R-GA), Mark Warner (D-VA), and Johnny Isakson (R-GA) sent a letter to the Secretary of the Army raising concerns over a recent report about lead poisonings and dangerous lead levels in housing on U.S. Army installations, endangering military families. 

“We write to you today concerned about recent reports of lead poisoning at a number of Army installations. The health and safety of our servicemembers and their families are of the utmost importance,” the Senators said. 

While the sale of lead-based paint is banned in the United States, many older homes still have the old paint on walls, which can become dangerous to children as it peels and chips. Young children are most susceptible to lead poisoning and face long-term developmental delays.

The report highlights cases of lead poisoning at on-base housing at Fort Benning, Georgia; Fort Polk, Louisiana; Fort Hood and Fort Bliss, Texas; Fort Knox, Kentucky; and a 2015 Department of Defense IG report that found lead paint hazards at Ft. Belvoir, Virginia. In the letter, the Senators ask Army Secretary Mark Esper to provide a detailed briefing about what the Army is doing to keep military families safe and what they need from Congress to address this problem. 

“We ask that you provide our offices with a detailed briefing as soon as possible outlining the immediate and long-term mitigation strategy to keep military families safe, provide medical treatment for those potentially or previously affected, make long-lasting repairs, and finally, provide legislative proposals or guidance on legislation needed to hold maintenance contractors accountable,” the Senators concluded.

 

The full text of the letter can be found here and below.

 

Dear Secretary Esper,

 

We write to you today concerned about recent reports of lead poisoning at a number of Army installations. The health and safety of our servicemembers and their families are of the utmost importance. 

 

A recent Reuters report highlighted cases of lead poisoning at on-base housing at Fort Benning, Georgia; Fort Polk, Louisiana; Fort Hood and Fort Bliss, Texas; and Fort Knox, Kentucky. This follows a 2015 DoD inspector general report that found significant lead paint hazards at Ft. Belvoir in Virginia. At Fort Benning, Reuters conducted tests at five homes using methodology designed with a Columbia University geochemist. All five homes contained hazardous levels of deteriorating lead paint with one home far exceeding the federal threshold. Fort Knox contained levels 100 times the federal threshold.  According to Reuters, records from Brooks Army Medical Center in Texas show that from 2011 to 2016 more than 1,050 small children on bases nationwide tested positive for traces of lead higher than the Centers of Disease Control’s elevated threshold.  The report also raises concerns that the Army has discouraged certified testing to identify deteriorating lead paint in base homes and that base hospitals have not properly reported incidents of children with high lead tests to state health departments. 

 

As the report points out, these on-base homes, managed and operated largely through private partnerships, are putting families and children at risk.  We ask that you provide our offices with a detailed briefing as soon as possible outlining the immediate and long-term mitigation strategy to keep military families safe, provide medical treatment for those potentially or previously affected, make long-lasting repairs, and finally, provide legislative proposals or guidance on legislation needed to hold maintenance contractors accountable.

 

Sincerely,

 

###

WASHINGTON, D.C. – U.S. Senators Mark Warner (D-VA) and Tim Kaine (D-VA) joined Jack Reed (D-RI) and 46 of their Democratic colleagues in a letter to Office of Management & Budget Director Mick Mulvaney to urge the Trump Administration to continue protecting servicemembers and their families from abusive financial practices. The Senators are asking the Trump Administration not to abandon protections established under the Military Lending Act (MLA). The MLA was passed in 2006 with bipartisan support to help safeguard active-duty military members and their families from financial fraud, predatory loans, and abusive credit practices.  Among other military consumer protections, the law caps the annual interest rate for an extension of consumer credit to a servicemember or their dependents at 36 percent.  

“The CFPB should not be abandoning its duty to protect our servicemembers and their families, and we seek your commitment that you will utilize all of the authorities available to the CFPB to ensure that servicemembers and their families continue to receive all of their MLA protections,” the Senators wrote.  

This week, the New York Times reported that: “The Trump Administration is planning to suspend routine examinations of lenders for violations of the Military Lending Act, which was devised to protect military service members and their families from financial fraud, predatory loans and credit card gouging, according to internal agency documents.  Mick Mulvaney, the interim director of the Consumer Financial Protection Bureau, intends to scrap the use of so-called supervisory examinations of lenders, arguing that such proactive oversight is not explicitly laid out in the legislation, the main consumer measure protecting active-duty service members, according to a two-page draft of the change.” 

And NPR reported that the Trump Administration is also taking aim at financial protections for members of the military by proposing to ease restrictions on “gap insurance” that could open up servicemembers to getting cheated by predatory practices when they purchase cars.

The Senators highlighted that U.S. troops face unique financial challenges and that the financial readiness of our servicemembers is directly tied to military readiness, calling on Mr. Mulvaney not to halt military lending checks or undertake measures that would potentially harm U.S. troops and their families.

“In addition, for our servicemembers, especially those who are deployed overseas facing hostile fire, it is unreasonable to place the burden of detecting and reporting MLA abuses on servicemembers, especially when they should be given every opportunity to focus squarely on their missions,” wrote the Senators.  “What the CFPB is reported to be contemplating is equivalent to forcing our armed forces to stop using radar, sonar, and other early warning technologies and instead react to threats as they occur.   No one would force our armed forces to do so, and the CFPB should not similarly force any of its examiners to turn a blind eye.  For generations, Americans have set partisanship aside and have made every effort to provide servicemembers and their families with all the resources and protections they deserve.  We ask no less of you and, as such, seek your commitment that you will continue the CFPB’s tradition of ensuring that servicemembers and their families receive all of their MLA protections by utilizing all of the authorities available to the CFPB.”

The Office of Servicemember Affairs at the CFPB has handled more than 90,000 consumer complaints from servicemembers and their families and taken action to help return hundreds of millions into the pockets of servicemembers affected by harmful practices

 

The text of the letter is below:    

 

August 15, 2018

 

Mick Mulvaney                                                                     

Director                                                                                

Office of Management and Budget                                       

725 17th Street, NW                                                               

Washington, DC 20503                                                        

 

Dear Director Mulvaney:

 

We write regarding reports that the Consumer Financial Protection Bureau (CFPB) will no longer protect servicemembers and their families by including the Military Lending Act (MLA) as part of the CFPB’s routine lender examinations due to a purported lack of authority.  These reports are puzzling because the CFPB already possesses the authority to enforce the MLA and examine many types of lenders for the purposes of “detecting and assessing risks to consumers and to markets for consumer financial products and services.”  The CFPB should not be abandoning its duty to protect our servicemembers and their families, and we seek your commitment that you will utilize all of the authorities available to the CFPB to ensure that servicemembers and their families continue to receive all of their MLA protections.

 

By enacting the MLA, Congress sent a clear bipartisan message that high-cost lending is a clear risk to military consumers that must be addressed to also protect military readiness.  Indeed, among its provisions, the MLA caps the annual interest rate for an extension of consumer credit to a servicemember or his or her dependents at 36%.  CFPB examinations and the CFPB’s Office of Servicemember Affairs have been critical components of ensuring the detection and prevention of risks to military consumers.  Such examinations serve as the early warning system for MLA deficiencies so that they do not snowball into costly losses for servicemembers and avoidable litigation costs and penalties for lenders.

 

Given your senior role at the Office of Management and Budget, we are sure you are aware that the MLA also helps the Department of Defense (DOD) to save taxpayer funds based on the following DOD justification for its MLA rule:

 

“Losing qualified Service members due to personal issues, such as financial instability, causes loss of mission capability and drives significant replacement costs. The Department estimates that each separation costs the Department $58,250.  Losing an experienced mid-grade noncommissioned officer (NCO), who may be in a leadership position or key technical position, may be considerably more expensive in terms of replacement costs and in terms of the degradation of mission effectiveness resulting from a loss of personal reliability for deployment and availability for duty.”

 

Needlessly stopping MLA examinations altogether and choosing instead to rely on reports of MLA violations after they occurred is further perplexing given that the CFPB is already conducting lender examinations of credit products that are also subject to the MLA.  Such a policy decision would be both inefficient and irresponsible to require a CFPB examiner to ignore as part of his or her examination risks to military consumers who are protected by the MLA.  In addition, for our servicemembers, especially those who are deployed overseas facing hostile fire, it is unreasonable to place the burden of detecting and reporting MLA abuses on servicemembers, especially when they should be given every opportunity to focus squarely on their missions.  

 

What the CFPB is reported to be contemplating is equivalent to forcing our armed forces to stop using radar, sonar, and other early warning technologies and instead react to threats as they occur.   No one would force our armed forces to do so, and the CFPB should not similarly force any of its examiners to turn a blind eye.  For generations, Americans have set partisanship aside and have made every effort to provide servicemembers and their families with all the resources and protections they deserve.  We ask no less of you and, as such, seek your commitment that you will continue the CFPB’s tradition of ensuring that servicemembers and their families receive all of their MLA protections by utilizing all of the authorities available to the CFPB.   We request that you respond with your commitment no later than Monday, August 20.

 

Sincerely,


###

 

WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), Vice Chairman of the Senate Select Committee on Intelligence and a member of the Senate Banking and Finance Committees, joined Senate colleagues in urging the Chairmen of the Senate and House Armed Services Committees to include a Senate-passed amendment cosponsored by Sen. Warner that would reinstate penalties against ZTE in their upcoming NDAA FY2019 Conference Report. Earlier this year, intelligence leaders testified before the Senate Intelligence Committee warning that ZTE, Huawei, and other Chinese state-directed telecommunications companies have the capacity for espionage and intellectual property theft, posing clear threats to the national security, people, and economy of the United States. This week, President Trump’s Commerce Department announced an agreement to lift the ban preventing Chinese telecom giant ZTE from doing business with American suppliers.

Additionally, Senators urged the conferees to include the reforms to the Committee on Foreign Investment in the United States (CFIUS), which were a part of the recently passed Senate NDAA bill. These reforms, also known as the Foreign Investment Risk Review Modernization Act (FIRRMA), would ensure that foreign investments in the U.S. do not pose a national security risk.

Sen. Warner, a former technology executive, has long expressed concern that ZTE poses a significant threat to our national security. He recently wrote to the administration urging President Trump to re-consider a deal with the China-based company.

The text of the letter to NDAA conferees can be found here and below:

 

Dear Chairmen McCain and Thornberry, and Ranking Members Reed and Smith:

 

We write to express our strong support for measures in the Senate-passed Fiscal Year 2019 National Defense Authorization Act (FY 2019 NDAA) that would reinstate U.S. government penalties against ZTE, a Chinese state-directed telecommunications company, and modernize the Committee on Foreign Investment in the United States (CFIUS).  As you begin deliberations over the final version of the FY 2019 NDAA, we request that you include these two measures.

 

Section 6702:  Prohibition on Modification of Civil Penalties under Export Control and Sanctions Laws and Prohibition on Certain Telecommunications Equipment.

 

We strongly oppose the June 2018 deal with ZTE negotiated by the Commerce Department’s Bureau of Industry and Security (BIS) to lift the seven-year ban against the export of U.S. parts and components to ZTE.  BIS imposed this seven-year ban and other penalties against ZTE in April 2018 in response to its numerous violations of U.S. export controls and sanctions laws. 

 

We also note that our nation’s six top intelligence leaders testified before the Senate Intelligence Committee in February 2018 about their concern that ZTE, Huawei, and other Chinese state-directed telecommunications companies are beholden to the Chinese government and Communist Party, which provides the capacity for espionage and intellectual property theft, and therefore poses clear threats to the national security, people, and economy of the United States.  

 

As you prepare the Conference Report, we therefore urge you to retain—and further strengthen—Section 6702 of the Senate-passed FY 2019 NDAA, which would not only reinstate the April 2018 penalties against ZTE and prohibit the modification of any penalties against a Chinese telecommunications firm unless certain conditions are met, but also prohibit the U.S. government from using or procuring equipment from, or entering into a contract with ZTE or Huawei. 

 

Title XVII:  Foreign Investment Risk Review Modernization Act of 2018

 

We also thank you for your work protecting our national security and intellectual property by ensuring that foreign countries are not engaged in illicit behavior when investing in the United States.

 

As you are aware, the Senate version of the FY 2019 NDAA includes important reforms to the Committee on Foreign Investment in the United States that were part of the Foreign Investment Risk Review Modernization Act (FIRRMA).  Those reforms are vital to protecting our national security and preventing intellectual property theft by foreign countries—including the People’s Republic of China. 

 

As you negotiate a conference report for the 2019 NDAA, we urge you to include the Senate-passed CFIUS reforms and ensure that the final language fully addresses our national security and competitiveness concerns.  We believe that efforts to weaken the robust protections in the FIRRMA will embolden our adversaries and present threats to our national security.

 

We thank you for your leadership, and we appreciate your consideration.

 

Sincerely,

  

###

WASHINGTON, D.C. – Amid concerns surrounding the accelerating pace of stock buybacks in U.S. capital markets, U.S. Senators Tammy Baldwin (D-WI), Chris Van Hollen (D-MD) and Minority Leader Chuck Schumer (D-NY) are leading their colleagues to call on U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton to open a public comment period to review the SEC’s current rules around stock buybacks, which haven’t been updated in over a decade.

In 1982, the SEC finalized rule 10b-18 which, for the first time, allowed public companies to buy back their stock without fear of being charged with stock market manipulation. Since that time, there has been a 40,000% increase in stock buybacks. The Republican tax bill has only fueled this trend. So far this year, corporations have announced more than $480 billion in stock buybacks, overwhelmingly benefiting top executives and wealthy shareholders, and leaving middle class workers behind.

In the letter to Chairman Clayton, the Senators stated, “We write with concerns about the accelerating pace of stock buybacks in U.S. capital markets. The Securities and Exchange Commission (“SEC” or “the Commission”) last updated Rule 10b-18, which governs stock buybacks, in 2003.  Since that time, there have been significant changes in executive compensation practices, shareholder activism, and investing technology. Therefore, we respectfully request that the Commission begin a process to review how companies are conducting buybacks under Rule 10b-18 and whether corporate insiders are exploiting buybacks to sell shares received as executive pay at inflated prices.”

“While we are troubled by the magnitude of stock buybacks and the consequences for employees and communities, we are even more disturbed by the dramatic increase in stock sales by corporate insiders following the announcement of a buyback. This phenomena means it is imperative that the SEC revisit the evolution of Rule 10b-18 to ensure that corporate executives are not using the rule inappropriately to enable advantageous sales of their own stock while ignoring the needs of their companies’ workers,” the Senators continued. 

U.S. Senators Sherrod Brown (D-OH), Cory Booker (D-NJ), Elizabeth Warren (D-MA), Ron Wyden (D-OR), Mark Warner (D-VA), Sheldon Whitehouse (D-RI), Kirsten Gillibrand (D-NY), Jack Reed (D-RI), Richard Blumenthal (D-CT), Edward Markey (D-MA), Mazie Hirono (D-HI), Ben Cardin (D-MD), Dianne Feinstein (D-CA), Angus King (I-ME), Brian Schatz (D-HI), Jeff Merkley (D-OR), Joe Donnelly (D-IN) and Maggie Hassan (D-NH) also signed the letter.

The full letter is available here.

An online version of this release is available here.

 

###

WASHINGTON –U.S. Sen. Mark R. Warner (D-VA), Vice Chairman of the Senate Select Committee on Intelligence and a member of the Senate Banking and Finance Committees, today sent letters to Twitter and Google parent company Alphabet, requesting information about any data sharing agreements between the companies and Chinese vendors. The letter follows a disclosure earlier this week by Facebook that the company has partnerships with Chinese telecom companies including Huawei that allow them to access Facebook users’ non-public data. 

“Since at least October 2012, when the House Permanent Select Committee on Intelligence released its widely-publicized report, the relationship between the Chinese Communist Party and equipment makers like Huawei and ZTE has been an area of national security concern. Since then, numerous articles in the tech trade press have focused on concerns by American and allied intelligence agencies that products from Chinese device makers, such as Lenovo, have security vulnerabilities that could allow Chinese intelligence to access data stored on, or transmitted by, devices.  And the New York Times reported in 2016 that firmware found in low-end smartphone devices, such as those of Huawei and ZTE, continually transmitted local data to Chinese severs, potentially for foreign intelligence purposes,” Sen. Warner wrote to the two companies today. 

It is publicly known that Alphabet has entered into strategic partnerships with Chinese mobile device manufacturers, including Huawei and Xiaomi, as well as with Chinese technology platform Tencent. In light of Facebook’s recent revelations, Sen. Warner requested that the company provide information about those partnerships, as well as any other agreements that Alphabet may have entered into with third-party vendors based in China. A similar request was posed to Twitter. 

Sen. Warner’s letter to Alphabet CEO Larry Page is available here. His letter to Twitter CEO Jack Dorsey is available here.  

###

WASHINGTON – Today, U.S. Sen. Mark R. Warner (D-VA) and a group of 15 Senators sent a letter to the Office of the Comptroller of the Currency (OCC), the Chairman of the Board of Governors of the Federal Reserve System, and the Chairman of the Federal Deposit Insurance Corporation (FDIC), urging them to take steps that would strengthen access to credit for diverse communities under the Community Reinvestment Act (CRA).

The CRA was signed into law in 1977 to provide a framework to ensure that banks serve the needs of all members of their community, regardless of their race, gender, or income. By ensuring that banks provide access to credit for low- and middle-income (LMI) communities, the CRA has helped ameliorate redlining that has disadvantaged minorities and disinvestment that has harmed urban and rural communities. As a result, the CRA has expanded homeownership to more Americans, financed more small businesses, and transformed local economies.

The Senators urged the agencies to take the opportunity to strengthen the CRA by expanding its applicability to regions and institutions that are not currently covered by the CRA and avoid proposals that could undermine the long-standing effectiveness of the law.  In addition, the Senators emphasized the need to reflect the impact of digital banking in any new regulations.

“When the CRA became law in 1977, a bank’s geographic footprint and the areas surrounding it was a good proxy for the communities served by the bank.  That no longer holds true.  A bank should be examined under the CRA for how it serves LMI communities where it has a physical footprint and in areas where the bank accepts deposits and does substantial business, and it should receive CRA credit for qualifying loans and investments made in those areas,” wrote the Senators.

The Senators also advised the federal agencies to avoid proposals that could undermine the effectiveness of the CRA.  “While we generally support expansions that benefit LMI communities, we are concerned that permitting expansions for banks with ‘less than satisfactory’ ratings undermines the only formal compliance mechanism that exists under the CRA,” the Senators warned. “Furthermore, we believe that narrowing the universe of loans with respect to which a regulator evaluates a bank’s illegal or discriminatory credit practices is inconsistent with a key finding of Congress in passing the CRA: banks must demonstrate that they ‘serve the convenience and needs of the communities in which they are chartered to do business.’”

In addition to Sen. Warner, the letter was signed by Sens. Tim Kaine (D-VA), Cory Booker (D-NJ), Sherrod Brown (D-OH), Catherine Cortez Masto (D-NV), Elizabeth Warren (D-MA), Doug Jones (D-AL), Amy Klobuchar (D-MN), Bob Menendez (D-NJ), Kirsten Gillibrand (D-NY), Dianne Feinstein (D-CA), Brian Schatz (D-HI), Chris Van Hollen (D-MD), Gary Peters (D-MI), Ron Wyden (D-OR), and Debbie Stabenow (D-MI).

The full letter text is found below and here.

 

The Honorable Jerome H. Powell
Chairman 

Board of Governors of the Federal Reserve System

550 17th Street, NW

Washington, D.C. 20552                                

                        

The Honorable Joseph M. Otting

Comptroller of the Currency

400 Seventh Street SW

Washington, D.C. 20219        

 

The Honorable Martin J. Gruenberg

Chairman

Federal Deposit Insurance Corporation

20th Street and Constitution Avenue, NW

Washington, D.C. 20551

                                                                                  

Dear Chairman Powell, Comptroller Otting, and Chairman Gruenberg:

For over 40 years, the Community Reinvestment Act (CRA) has been critical in encouraging depository institutions (banks) to serve the credit needs of rural and urban low- and moderate-income (LMI) individuals, small businesses, and communities.  The CRA requires federal banking regulators to regularly assess each bank’s delivery of credit to LMI communities and consider that assessment when evaluating a bank’s application to expand.  In doing so, the CRA has helped ameliorate redlining that has disadvantaged minorities and disinvestment that has harmed urban and rural communities. 

We understand that your agencies are considering publishing an advance notice of proposed rulemaking that could suggest significant changes to the implementation of the CRA.  We hope that you take this opportunity to strengthen the CRA, broaden its applicability to more regions and institutions, and avoid proposals that could undermine the continuing effectiveness of the CRA.

A strong CRA continues to be needed.  Black homeownership rates fell by 5 percent from 2001 to 2016 even as white homeownership rates fell by only 1 percent.[1]  Meanwhile, Hispanic homeownership has declined 5 percent from its 2007 peak.[2]  Access to credit for minority-owned businesses remains challenging.  Black-owned companies apply for credit at a rate that is 10 percentage points higher than white-owned companies, and Hispanic-owned companies do so at a 7 percent higher rate.  But the approval rates for black-owned companies are 19 percentage points lower than white-owned companies and 6 percent lower for Hispanic-owned companies.  Forty percent of black-owned companies and over 20 percent of Hispanic-owned companies that did not apply for financing did not apply because they thought they would not be approved, compared to 14 percent of white-owned firms.[3]

A substantial body of evidence shows the significant positive contribution the CRA has made to LMI communities, helping all communities benefit from increased access to credit and economic growth.  One 2017 study found that the CRA increases credit activity by 9 percent and the number of “credit visible” individuals in the community by 7 percent.[4]  Another 2017 study linked the CRA to increased small business lending activity in LMI communities.[5]   Benefits have also flowed to smaller metropolitan and rural areas; a recent analysis shows that community development financing by banks headquartered in Appalachia reached $8.8 billion from 2007 to 2010.[6]  What the CRA does not do is also important: studies have demonstrated that the CRA does not increase delinquencies or foreclosures and did not contribute to the subprime crisis.[7] 

Some changes to the implementation of the CRA are long overdue.  For example, there is a need to reflect technology’s significant and continuing transformational effect on the delivery of banking services.  In a memorandum dated April 3, 2018, the Department of the Treasury (Treasury) recommends updating the definition of a bank’s CRA assessment area to better account for the range of delivery channels that banks offer.  When the CRA became law in 1977, a bank’s geographic footprint and the areas surrounding it was a good proxy for the communities served by the bank.  That no longer holds true.  A bank should be examined under the CRA for how it serves LMI communities where it has a physical footprint and in areas where the bank accepts deposits and does substantial business, and it should receive CRA credit for qualifying loans and investments made in those areas. 

A related phenomenon is that as bank branch footprints shrink due to a variety of causes—including the increased adoption of digital banking—rural areas increasingly rely on internet banking to deliver access to credit or branches far from their community.  To ensure the CRA is an effective tool against rural disinvestment, banking regulators should reassess whether scoping guidance for examiners should encourage the classification of more rural communities as full scope assessment areas instead of limited scope assessment areas.

Another area that we and Treasury agree deserves renewed consideration is the inclusion of bank affiliates’ performance under the lending test.  Under current regulations, a bank can choose whether its affiliates’ loans are included in its CRA performance assessment.  This can lead to strategic behavior by banks, who are incentivized to include affiliates’ loans when it benefits their CRA performance and exclude them when it harms CRA performance.  A bank should not have the discretion to exclude from CRA evaluation loans made by its affiliates; all loans made by a bank’s affiliates should be included in the bank’s CRA evaluation.

The digitization of banking also means that it is appropriate to re-evaluate the CRA’s service test, which assesses the number and types of investments made and services provided by a bank to LMI communities in its assessment area.  Clearly, physical branches are no longer the only way for banks to deliver access to credit.  Although technology has certainly helped expand access to credit through alternative delivery systems, studies continue to show that physical branches still provide a significant boost to access to credit to their surrounding community.  For example, a 2014 study found that, even in crowded markets, a branch closing results in 13 percent fewer small business loans, and the effect is concentrated in low-income and high-minority neighborhoods.[8]  We urge you to keep in mind that although digital banking has increased access to credit for many, branches continue to be important, particularly for LMI communities, due to the information-intensive and relationship-specific credit production in those areas compared to higher income areas.

One suggestion included in the Treasury memorandum that gives us pause is the recommendation that the other banking regulators adopt two recent Office of the Comptroller of the Currency (OCC) policies: one permits banks to open or acquire branches even if a bank has a “less than satisfactory” CRA rating, provided that the applicant demonstrate that the expansion benefits the communities it serves, and the other limits the effect illegal or discriminatory credit practices can have on a bank’s CRA rating.  While we generally support expansions that benefit LMI communities, we are concerned that permitting expansions for banks with “less than satisfactory” ratings undermines the only formal compliance mechanism that exists under the CRA: the prospect that the banking regulators will deny those banks’ expansion applications.  To put this in context, banks have received “Satisfactory” or “Outstanding” grades in 98 percent of CRA examinations since 2010.[9]  We believe that limiting exceptions to this enforcement mechanism is likely to result in more benefits to LMI communities through increased CRA compliance than would be achieved by occasionally approving applications from poor performing banks when the expansion would provide increased benefits to LMI communities.  Furthermore, we believe that narrowing the universe of loans with respect to which a regulator evaluates a bank’s illegal or discriminatory credit practices is inconsistent with a key finding of Congress in passing the CRA: banks must demonstrate that they “serve the convenience and needs of the communities in which they are chartered to do business.”[10]

The recent Treasury memorandum suggests a number of other sensible updates to CRA regulations, such as permitting banking regulators to preclear community development financings as qualifying investments and making those determinations public, and improving the objectivity and comparability of CRA exam performance metrics.  

Thank you for your attention to the CRA, one of the most important tools we have for inclusive access to credit and economic growth. 

Sincerely,

 

###



[1] Laurie Goodman, Alana McCargo, & Jun Zhu, A closer look at the fifteen-year drop in black homeownership, Urban Institute (Feb. 13, 2017), https://www.urban.org/urban-wire/closer-look-fifteen-year-drop-black-homeownership.

 

[2] Richard Fry & Anna Brown, In a Recovering Market, Homeownership Rates Are Down Sharply for Blacks, Young Adults, Pew Research Center (Dec. 15 2016),http://www.pewsocialtrends.org/2016/12/15/in-a-recovering-market-homeownership-rates-are-down-sharply-for-blacks-young-adults/.

[3] Federal Reserve Bank of Cleveland & Federal Reserve Bank of Atlanta, 2016 Small Business Credit Survey, Report on Minority-Owned Firms (Nov. 2017), at 7-17, https://www.clevelandfed.org/~/media/content/community%20development/smallbusiness/2016%20sbcs/sbcs%20minority%20owned%20report.pdf?la=en

 

[4] Kristin F. Butcher & Ana Patricia Muñoz, “Using Credit Reporting Agency Data To Assess the Link Between the Community Reinvestment Act and Consumer Credit Outcomes,” 19Cityscape 2, 97-98 (2017).

 

[5] Raphael W. Bostic & Hyojung Lee, “Small Business Lending Under the Community Reinvestment Act,” 19 Cityscape 2, 81 (2017).

 

[6] Josh Silver & Archana Pradhan, National Community Reinvestment Coalition; Spencer M. Cowan, Woodstock Institute, Access to Capital and Credit in Appalachia and the Impact of the Financial Crisis and Recession on Commercial Lending and Finance in the Region (July 2013), at 138, https://www.arc.gov/assets/research_reports/AccessToCapitalAndCreditInAppalachia-July2013.pdf.

 

[7] See, e.g., Robert B. Avery & Kenneth P. Brevoort, The Subprime Crisis: Is Government Housing Policy

to Blame?, Board of Governors of the Federal Reserve System (2011), https://www.federalreserve.gov/pubs/feds/2011/201136/201136pap.pdf; Glenn Canner & Neil Bhutta, Staff Analysis of the Relationship Between the CRA and the Subprime Crisis, Board of Governors of the Federal Reserve System (Nov. 21, 2008), https://www.federalreserve.gov/images/20081203_analysis.pdf.

[8] Hoai-Luu Q. Nyugen, Do Bank Branches Still Matter? The Effect of Closings on Local Economic Outcomes (Dec. 2014), at 3, http://economics.mit.edu/files/10143

 

[9] Ben Horowitz, Fair lending laws and the CRA: Complementary tools for increasing equitable access to credit, Federal Reserve Bank of Minneapolis (Mar. 8, 2018),https://minneapolisfed.org/publications/community-dividend/fair-lending-laws-and-the-cra-complementary-tools-for-increasing-equitable-access-to-credit.

[10] 12 U.S.C. § 2901(a)(1). 

 Warner Leads Effort to Urge Banking Regulators to Strengthen Credit Access for Low-Income Communities

WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), a member of the Senate Banking Committee, released the following statement after President Trump signed his regulatory reform bill, S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, into law:

“The bipartisan Economic Growth, Regulatory Relief and Consumer Protection Act will provide meaningful relief to Main Street. It will roll back unnecessary and burdensome regulations on credit unions and small community banks while ensuring that larger banks remain subject to the rules I helped put in place after the financial crisis. This bill is the result of years of tough negotiations between Democrats and Republicans and will help small lenders provide mortgages and other credit to hardworking Virginians and small businesses. While this bill does not include everything Democrats wanted nor everything Republicans wanted, I’m proud of my colleagues for putting differences aside, finding common ground, and working together to pass this sensible, bipartisan bill into law.”  

The legislation is the result of bipartisan negotiations among Warner, Banking Committee Chairman Mike Crapo (R-ID), and Banking Committee members Sens. Joe Donnelly (D-IN), Heidi Heitkamp (D-ND) and Jon Tester (D-MT).

The legislation was endorsed by a number of Virginia banking institutions including the Virginia Bankers Association (VBA) and the Virginia Association of Community Banks (VACB).

 

 ###

WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), a member of the Senate Banking Committee, released the following statement after the House passed S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, sending the bill to the President’s desk: 

“The bipartisan Economic Growth, Regulatory Relief and Consumer Protection Act will provide meaningful relief to Main Street. It will roll back unnecessary and burdensome regulations on credit unions and small community banks while ensuring that larger banks remain subject to the rules I helped put in place after the financial crisis. This bill is the result of years of tough negotiations between Democrats and Republicans and will help small lenders provide mortgages and other credit to hardworking Virginians and small businesses. While this bill does not include everything Democrats wanted nor everything Republicans wanted, I’m proud of my colleagues for putting differences aside, finding common ground, and sending this sensible, bipartisan bill to the President’s desk for signature.” 

The legislation is the result of bipartisan negotiations among Warner, Banking Committee Chairman Mike Crapo (R-ID), and Banking Committee members Sens. Joe Donnelly (D-IN), Heidi Heitkamp (D-ND) and Jon Tester (D-MT).

 

###

 

Mulvaney, who serves on a temporary basis as the head of the Consumer Financial Protection Bureau (CFPB), not to undo or weaken the CFPB’s payday lending rule.

The rule would require lenders to determine upfront whether or not a borrower can afford to pay back a loan without having to take out another loan. The rule represents an important step in reining in predatory business practices by payday lenders nationwide that are designed to exploit the financial hardships facing millions of hardworking families.

“The payday lending rule’s purpose is pretty simple: lenders should figure out whether a borrower is able to pay back a loan so that consumers don’t get caught up in a revolving cycle of debt,” said Sen. Warner during his questioning of Director Mulvaney.

Congress created the CFPB to protect Americans from unfair, deceptive and abusive lending practices. Predatory lenders often target hardworking borrowers who find themselves in need of quick cash—often for things like necessary car repairs or medical emergencies—by charging them excessive interest rates and hidden fees that trap them in long-term cycles of debt. Nearly 12 million Americans use payday loans each year, incurring more than $9 billion annually in fees. The CFPB developed the payday lending rule over the course of five years and reviewed more than 1 million public comments. 

 

Last month, Sen. Warner also wrote to Director Mulvaney urging him not to repeal the payday lending rule.

 

The full transcript of Sen. Warner’s exchange with Director Mulvaney follows:

 

Warner: I want to talk to you about the payday lending rule. Now, I think the payday lending rule’s purpose is pretty simple—and I think actually most Americans regardless of side would agree on this—that lenders should figure out upfront whether a borrower is able to pay back a loan and to make sure that consumers don’t get caught up in a revolving cycle of debt by folks that don’t have the same kind of regulatory oversight that our traditional lending institutions do. Now, you’ve been in this job a few months, acting in this job. Did you order the Bureau to engage in a rule making process to reconsider the rule on payday lending?

 

Mulvaney: Yes sir.

 

Warner: And how would revoking the rule or changing it help consumers, particularly consumers who are living paycheck to paycheck?

 

Mulvaney: Senator, I don’t automatically conclude that making an indication to revisit the rule assumes that we will be revoking the rule or even changing the rule. I have the right under the statute to revisit the rules, which I'm doing, but we have not arrived at any preconceived notions of outcomes. That would violate the Administrative Procedures Act, which we have not done.

 

Warner: But sir, my understanding is this rulemaking took a number of years. It was a subject of a great deal of scrutiny. I believe there was industry input as well as consumer input and, I guess, I really wonder why in your first few months of coming into this acting role that this would rise to the top of a priority that would say we need to relook at the practices of payday lenders, which I think most folks would agree is a last resort financial tool and one that was absolutely appropriate for this Bureau to take on.

 

Mulvaney: Again I think was appropriate for it to take on. Although I think you could make the argument that the statute simply says you have to supervise this industry, which may not include regulating, different story for another day perhaps. But why was it at the top of the list? Because it was the last thing the previous Director did on his way out the door. There was a bunch of public criticism as to, or questions, as to whether or not it had been rushed. So for a variety of reasons, I thought it was entirely appropriate in my role as acting Director to do that the very first thing. In fact, I think I did it the first or second day I was there.

 

Warner: Mr. Mulvaney, I think there was a great deal of work that went on and I think the previous Director took those actions because of an ongoing need that people on both sides the aisle had discussed for a long time. I was disappointed you took that as your first action.

 

###

WASHINGTON — U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) joined a group of 41 Senators in a letter to Consumer Financial Protection Bureau (CFPB) Acting Director Leandra English and Office of Management and Budget (OMB) Director Mick Mulvaney urging them to end any efforts to undermine and repeal the CFPB’s payday lending rule. The rule represents an important step in reining in predatory business practices by payday lenders nationwide that are designed to exploit the financial hardships facing millions of hardworking families.

“We understand that the CFPB is delaying the rule by granting waivers to companies who would otherwise be taking steps to begin complying with the rule, and that the Bureau may be offering the payday loan industry an opportunity to undermine the rule entirely. We view these actions as further efforts to undermine the implementation of this important consumer protection rule,” the Senators wrote.    

Congress created the CFPB to protect Americans from unfair, deceptive and abusive lending practices. Predatory lenders often target hardworking borrowers who find themselves in need of quick cash—often for things like necessary car repairs or medical emergencies—by charging them excessive interest rates and hidden fees that trap them in long-term cycles of debt. Nearly 12 million Americans use payday loans each year, incurring more than $9 billion annually in fees. The CFPB developed the payday lending rule over the course of five years and reviewed more than 1 million public comments. 

“The CFPB’s role in serving as a watchdog for American consumers while making our financial markets safe, fair, and transparent continues to be of critical importance. To this end, we urge you to end any efforts to undermine and repeal this critical consumer protection,” the Senators continued.

The letter also called into question efforts at the CFPB to dismiss ongoing enforcement actions against predatory lenders, calling such actions antithetical to the CFPB’s mission of serving as a watchdog for American consumers. 

Other Senators joining Sens. Warner and Kaine in signing the letter include U.S. Sens. Dick Durbin (D-IL), Jeff Merkley (D-OR), Sherrod Brown (D-OH), Kamala Harris (D-CA), Elizabeth Warren (D-MA), Chris Van Hollen (D-MD), Ed Markey (D-MA), Mazie Hirono (D-HI), Dianne Feinstein (D-CA), Catherine Cortez Masto (D-NV), Jeanne Shaheen (D-NH), Kirsten Gillibrand (D-NY), Ron Wyden (D-OR), Brian Schatz (D-HI), Martin Heinrich (D-NM), Tina Smith (D-MN), Ben Cardin (D-MD), Tammy Duckworth (D-IL), Bernie Sanders (I-VT), Patty Murray (D-WA), Maggie Hassan (D-NH), Cory Booker (D-NJ), Tom Udall (D-NM), Chris Coons (D-DE), Sheldon Whitehouse (D-RI), Angus King (I-ME), Patrick Leahy (D-VT), Tom Carper (D-DE), Gary Peters (D-MI), Debbie Stabenow (D-MI), Chris Murphy (D-CT), Amy Klobuchar (D-MN), Tammy Baldwin (D-WI), Joe Donnelly(D-IN), Michael Bennet (D-CO), Doug Jones (D-AL), Jack Reed (D-RI), Maria Cantwell (D-WA), Bob Casey (D-PA), and Bill Nelson (D-FL).

Full text of the letter is available here and below: 

Leandra English
Acting Director, Consumer Financial Protection Bureau
1700 G Street N.W.
Washington, D.C., 20552

Mick Mulvaney
Director, Office of Management and Budget
725 17th Street N.W.
Washington, D.C., 20503

Dear Ms. English and Mr. Mulvaney:

We write to express concern regarding the announcement that the Consumer Financial Protection Bureau (CFPB) will begin the process of reconsidering and eventually repealing the Bureau’s recently finalized Payday, Vehicle Title, and Certain High-Cost Installment Loans rule, also known as the “payday lending rule.”  We view this action as well as the dismissal of ongoing enforcement actions against predatory lenders as antithetical to the CFPB’s mission.

Research has shown that short-term payday loans trap consumers in high-interest debt for long periods of time and can result in serious financial harm, including increased likelihood of bankruptcy. Nearly 12 million Americans use payday loans each year, incurring more than $9 billion in fees. While short-term loans may help families facing unexpected expenses, predatory short-term loans with interest rates exceeding 300 percent often leave consumers with a difficult decision: defaulting on the loan or repeated borrowing. According to the CFPB, nearly 80 percent of payday loans are renewed within 14 days, and at least 27 percent of borrowers will default on their first loan. The CFPB also found that nearly 20 percent of title loan borrowers have had their vehicles seized by the lender when they are unable to repay this debt. The majority of all payday loans are renewed so many times that borrowers end up paying more in fees than the amount they originally borrowed.  This predatory business model exploits the financial hardships facing hard working families, trapping them into long-term debt cycles. 

The recent financial crisis, during which Americans lost more than $19 trillion in household wealth demonstrated clearly the need for a federal agency whose sole mission is to protect American consumers in the financial marketplace.  Congress created the CFPB, granting it the authority to crack down on these types of predatory lending practices. 

After conducting a five-year study and reviewing more than 1 million public comments, the CFPB used this vested authority to issue a rule in October 2017 requiring payday and car title lenders to ensure that consumers have the ability to repay each loan and still manage to meet their basic living needs and major financial obligations without needing to borrow again over the next 30-day period. This commonsense requirement is coupled with protections that provide consumers with reasonable repayment options common with other types of credit. 

We stand with a majority of our constituents in supporting the final rule and oppose efforts to repeal or undermine the final rule, which protects consumers from predatory payday, title loan, and high-cost installment lenders.  Bipartisan polling shows that the CFPB’s action to curb predatory lending reflects the will of the vast majority of Americans. According to a 2017 survey, 73 percent of Americans support the CFPB’s rule requiring payday lenders to make sure that consumers have the ability to repay before extending a loan.

We understand that the CFPB is delaying the rule by granting waivers to companies who would otherwise be taking steps to begin complying with the rule, and that the Bureau may be offering the payday loan industry an opportunity to undermine the rule entirely. We view these actions as further efforts to undermine the implementation of this important consumer protection rule.  

We are also troubled by the CFPB’s recent enforcement actions related to payday lending.  The CFPB recently decided to drop a lawsuit filed by the Bureau in 2017 against four payday lending companies in Kansas. These companies were being sued for flouting state laws by running illegal payday lending operations, including charging interest rates between 440 percent and 950 percent. The CFPB also is reportedly halting, without any explanation, a nearly four-year CFPB investigation into allegations that a South Carolina-based payday loan company engaged in deceptive lending practices. 

The CFPB’s role in serving as a watchdog for American consumers while making our financial markets safe, fair, and transparent continues to be of critical importance. To this end, we urge you to end any efforts to undermine and repeal this critical consumer protection. 

Sincerely,

###

 WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), Vice Chairman of the Senate Select Committee on Intelligence, issued the following statement on reports from the New York Times and the Guardian  that Cambridge Analytica misused the data of millions of Facebook users:

"This is more evidence that the online political advertising market is essentially the Wild West. Whether it's allowing Russians to purchase political ads, or extensive micro-targeting based on ill-gotten user data, it's clear that, left unregulated, this market will continue to be prone to deception and lacking in transparency. This is another strong indication of the need for Congress to quickly pass the Honest Ads Act to bring transparency and accountability to online political advertisements."

###

 

WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), Ranking Member of the Senate Banking Subcommittee on Securities, Insurance and Investment, today applauded the Securities and Exchange Commission (SEC)’s announcement of a new pilot program placing restrictions on “maker-taker” pricing models for stock exchange transaction fees. For years, Sen. Warner and lawmakers from both parties have pressed the SEC to study and reconsider the pricing model, which has been shown to create conflicts of interest that prevent the average investor from receiving the best price on trades.

“This pilot program is an important step towards reforming a broken system and eliminating conflicts of interest that hurt ordinary investors. I am hopeful this study will produce data that will help Congress and the SEC craft needed reforms,” Sen. Warner said. “I’m glad the SEC has finally acted on the concerns I have been voicing along with my colleagues on this issue for several years.”

Under the maker-taker pricing model, securities exchanges pay rebates to brokers that send bids and offers not intended for immediate execution, in the hopes of incentivizing liquidity in the market. Brokers who immediately execute their orders pay fees, which offset the rebates paid to brokers who create liquidity by not immediately executing their orders. However, this model has come under Congressional scrutiny after a 2013 study found evidence it created a conflict of interest for brokers – who may be incentivized to send orders that generate the largest rebate for the broker, rather than the best trade for the client.

Since 2014, Sen. Warner has been raising concerns about the “maker-taker” model. In April 2016, Sen. Warner and Sen. Mike Crapo (R-ID) wrote to the SEC expressing support for a pilot program to study the effects of rebates on U.S. equity markets.  In July 2017, Warner wrote to newly-appointed SEC Chairman Jay Clayton and called for “…pursuing the full elimination of [maker-taker] rebates.” 

According to the SEC, the proposed pilot would subject stock exchange transaction fee pricing, including “maker-taker” fee-and-rebate pricing models, to new temporary pricing restrictions across three test groups, and require the exchanges to prepare and publicly post data.

 

###

 

WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), a member of the Senate Banking Committee, released the following statement after the Senate voted 67-31 to pass S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act:  

“The bipartisan Economic Growth, Regulatory Relief and Consumer Protection Act that the Senate passed today will provide meaningful relief to Main Street. It will roll back unnecessary and burdensome regulations on credit unions and small community banks while ensuring that larger banks remain subject to the rules I helped put in place after the financial crisis. This bill is the result of years of tough negotiations between Democrats and Republicans and will help small lenders provide mortgages and other credit to hardworking Virginians and small businesses. While this bill does not include everything Democrats wanted nor everything Republicans wanted, I’m proud of my colleagues for putting differences aside, finding common ground, and passing this bipartisan legislation. The House of Representatives should move swiftly to take up and pass this sensible, bipartisan bill.”

 

###

 

WASHINGTON – Today, U.S. Sen. Mark R. Warner (D-VA), Vice Chairman of the Senate Select Committee on Intelligence, issued the following statement in response to the Federal Election Commission (FEC)’s announcement that commissioners have approved a Draft Notice of Proposed Rulemaking on two proposals dealing with disclosure rules for online political advertisements:

“While I applaud the FEC for moving forward today, my hope was that the simple and overdue act of strengthening these disclaimer rules would have been completed by now. The Commission’s current plan, which contemplates yet another round of comments, means rules concerning online political ads remain woefully behind the commonsense standards we apply to political ads on TV and other media – just as the country begins the primary season for the upcoming 2018 mid-term elections.

“Congress must recognize that our current laws are simply not adequate to deal with the national security threats we face from foreign adversaries like Russia, and other bad actors. While no one law alone will completely protect our democracy, updating our election laws is a simple and important start. Bipartisan legislation like the Honest Ads Act is needed to bring true parity between digital political ads and ads running on broadcast, satellite, and cable services.”

Russia attempted to influence the 2016 presidential election by buying and placing political ads on platforms such as Facebook, Twitter and Google. However, Americans had no way of knowing who was behind the ads, because, unlike radio and television ads, the FEC has exempted large swathes of online ads from general requirements to include disclaimers about who is responsible for the content.

In November 2017, Senator Warner led a number of his colleagues in calling on the FEC to take immediate action to improve transparency for political advertisements online. That effort followed Senator Warner’s introduction in October 2017 of the Honest Ads Actbipartisan legislation that would prevent foreign actors from influencing our elections by ensuring that political ads sold online are covered by the same rules as ads sold on TV, radio, and satellite.

According to the FEC, the public will now have 60 days to provide comments on two alternative proposals, one Republican-sponsored and one Democrat-sponsored, to amend FEC regulations concerning disclaimers on public communications on the internet that contain express advocacy, solicit contributions, or are made by political committees.

 

###

WASHINGTON – Today, the Senate voted 67-32 in favor of starting debate on S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, bipartisan legislation to grow the economy and protect consumers that was negotiated in part by Sen. Mark R. Warner (D-VA). Today Sen. Warner called for swift passage of the legislation, which will provide targeted relief for community banks and credit unions so they can improve access to capital and increase economic prosperity in the Commonwealth.

The legislation addresses some of the unintended consequences of the Dodd-Frank Act in order to make it easier for smaller community banks and credit unions to lend to Virginia businesses and families, which is good for households and the economy.

“The Senate is on the verge of passing major bipartisan legislation aimed at providing relief for small community banks, credit unions, and the customers they serve. As someone who helped put together the Dodd-Frank legislation, I know there are areas where we can help improve access to capital for consumers, farmers, and small businesses so they can grow the economy and create jobs,” said Sen. Warner. “Virginia’s community banks and credit unions did not cause the financial crisis, and they should not be held back by regulations intended for the big banks. I look forward to seeing the Senate pass this package of bipartisan measures that will provide relief for Main Street, strengthen consumer protections, and keep Wall Street accountable.”

Following the 2008 financial meltdown, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act to crack down on the worst Wall Street abuses and institute strict regulations to prevent another crisis. Sen. Warner played an important role in negotiating and drafting major portions of this legislation, which created new safeguards to protect our financial system and hold Wall Street accountable.

However, as with any major reform, the law also had some unintended consequences. Virginia has lost over a quarter of its community banks and nearly a third of its credit unions since Dodd-Frank was passed. In some cases, the law resulted in unnecessary and burdensome regulations on credit unions and small community banks that made it harder for them to lend money to help local businesses grow and create jobs.

“As a credit union, we have to adhere to the same regulations as large banks do.  But we have to do it with a much smaller base – we only have 10,000 members and 20 employees – adhering to the same regulations that a behemoth like Bank of America has to adhere to,” said Lisa Lambrecht, President & CEO of Entrust Financial Credit Union in Henrico County. “I wish the federal government would understand that these one-size-fits-all regulations don’t work for credit unions. You have to remember; credit unions were formed to fill that gap that the larger established financial system was not serving.”

“In the rural areas, the larger institutions across the whole country have reduced their branches. The smaller banks have held their own, but we’re operating with 2000 less community banks a day than we were 12, 15 years ago. That’s over one fourth of community banks are gone — and I think a primary reason for that is regulatory fatigue,” said Lyn Hayth, President & CEO of the Bank of Botetourt. 

“Every dollar we spend on increased compliance really doesn’t go to our capital. And if we could put that extra dollar into our capital, we could lend it back out into the community on a tenfold basis. So, our hope is that regulation can be decreased, and that we are able to take that capital that we save and invest it back into our communities,” said Alice Frazier, President & CEO of Bank of Charles Town in Middleburg. 

“I think that community banks are the backbone of our country, and many of our rural markets. And not just our rural markets – but I think we serve a vital role to the growth of the economy,” said Mark Hanna, President of Farmers & Merchants Bank in Timberville.

The Economic Growth, Regulatory Relief and Consumer Protection Act (S.2155) ensures that small lenders can provide mortgage and other credit to hardworking Americans, helping them and their families grow and start businesses. The bill also institutes several important consumer protections:

  • Allows consumers to get one free year of fraud alerts, which will help consumers who have been impacted by situations like the Wells Fargo scandal or whose identities or personal information has been stolen.
  • Unlimited free credit freezes and unfreezes, which helps consumers impacted by data breaches like the Equifax hack that compromised the personal information of approximately 145 million Americans.
  • Provides free credit monitoring for all active-duty servicemembers.
  • Protects the credit ratings of veterans wrongly penalized by medical bill payment delays by the Department of Veterans Affairs (VA). This measure would prohibit medical debt from services received through the Choice Program and other VA community care programs from being reported to credit reporting agencies for one year. In addition, it would establish a dispute process for veterans seeking to remove adverse actions already on their report.
  • Prevents mortgage companies from immediately kicking tenants out of their rentals if the landlord is foreclosed upon.
  • Encourages banks to report suspicious behavior if seniors could be getting financially scammed.
  • Allows seriously delinquent private student loan borrowers a one-time offer to remove negative reporting from their credit reports after making a series of on-time payments.

The legislation was introduced in November after years of bipartisan negotiations among Sen. Warner, Senate Banking Committee Chairman Mike Crapo (R-ID) and Banking Committee members Senators Joe Donnelly (D-IN), Heidi Heitkamp (D-ND) and Jon Tester (D-MT). It is also co-sponsored by Sen. Tim Kaine (D-VA).

 

WASHINGTON – On Net Neutrality National Day of Action, U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) joined a group of Senate and House Democrats in introducing a Congressional Review Act (CRA) resolution to overturn the Federal Communications Commission’s (FCC) partisan decision on net neutrality. The Senate CRA resolution of disapproval stands at 50 supporters, including Republican Sen. Susan Collins (R-ME). The House resolution currently has 150 co-sponsors.

The FCC’s Open Internet Order prohibited internet service providers from blocking, slowing down, or discriminating against content online. Repealing these net neutrality rules could lead to higher prices for consumers, slower internet traffic, and even blocked websites. A recent poll showed that 83 percent of Americans do not approve of the FCC’s action to repeal net neutrality rules.

“From the start, the FCC’s process to determine whether to keep previously established rules that guarantee a free and open internet was marred by partisan fights and troubling irregularities in the public comment system,” said the Senators. “By repealing these open internet principles, we believe the agency greenlighted potential anti-competitive practices that could negatively impact consumers. We will continue urging our colleagues on both sides of the aisle to stand together to protect the integrity of our nation’s most crucial information network.”

Last week, the FCC’s rule repealing net neutrality was published in the Federal Register, leaving 60 legislative days to seek a vote on the Senate floor on the CRA resolutions. In order to force a vote on the Senate resolution, the Senators will submit a discharge petition, which requires a minimum of 30 Senators’ signatures. Once the discharge petition is filed, Senate Democrats will demand a vote on the resolution. A simple majority of 51 votes is needed to pass a CRA resolution in the Senate. 

A copy of the CRA resolution can be found here.

 

###

WASHINGTON —Today, U.S. Sen. Mark R. Warner (D-VA), a member of the Senate Banking and Finance Committees, joined a group of 31 Senators to demand answers on reports that the Consumer Financial Protection Bureau (CFPB) has halted its investigation into how credit reporting agency Equifax failed to protect the personal data of more than 145 million Americans.

“We are deeply troubled by recent news reports that, under Director Mulvaney’s leadership, the CFPB has stopped its investigation into the Equifax breach,” the Senators wrote in a letter to Office of Management and Budget Director Mick Mulvaney and CFPB Acting Director Leandra English.“The CFPB is currently the only federal agency with supervisory authority over the largest consumer reporting agencies. Consumer reporting agencies and the data they collect play a central role in consumers’ access to credit and the fair and competitive pricing of that credit. Therefore, the CFPB has a clear duty to supervise consumer reporting agencies, investigate how this breach has or will harm consumers, and bring enforcement actions as necessary.”

According to reports, CFPB has not issued any subpoenas, sought testimony from key executives at Equifax, or proceeded with on-site examinations.

The Equifax breach exposed data that included customers’ names, Social Security numbers, birthdates, addresses, driver’s license numbers, and, for some consumers, credit card numbers. This data could easily be used by criminals to steal people’s identity or commit fraud. The impact on consumers whose data has been stolen is potentially devastating. As a result of identity theft and fraud, customers face the risk of having debt accrued in their name. They could suffer long-lasting damage to their credit, which could lead to them being denied loans, mortgages, employment, or even rental housing. To resolve the damage done by this data breach, they will likely spend months, if not years, trying to correct resulting errors and problems with their financial records.

Sen. Warner has been a leader in calling for better consumer protections from data theft. He has introduced legislation to prevent data breaches and hold credit reporting agencies (CRAs) like Equifax accountable, giving the FTC more direct supervisory authority over their data security, imposing mandatory penalties on CRAs to incentivize adequate protection of consumer data, and providing robust compensation to consumers for stolen data.Following the Equifax data breach, Sen. Warner asked the Federal Trade Commission (FTC) to examine whether credit reporting agencies such as Equifax have adequate cybersecurity safeguards in place for “the enormous amounts of sensitive data they gather and commercialize.” He slammed the credit bureau for its cybersecurity failures and weak response at a Banking Committee hearing with Securities and Exchange Commission (SEC) Chairman Jay Clayton last year.

In addition to Sen. Warner, others joining the letter include Sens. Brian Schatz (D-HI), Bob Menendez (D-NJ), Elizabeth Warren (D-MA), Sherrod Brown (D-OH), Jeanne Shaheen (D-NH), Jon Tester (D-MT), Chris Van Hollen (D-MD), Tom Udall (D-NM), Heidi Heitkamp (D-ND), Tammy Duckworth (D-IL), Catherine Cortez Masto (D-NV), Jeff Merkley (D-OR), Jack Reed (D-RI), Ed Markey (D-MA), Joe Donnelly (D-IN), Tina Smith (MN), Tammy Baldwin (D-WI), Kirsten Gillibrand (D-NY), Gary Peters (D-MI), Patty Murray (WA), Bernie Sanders (I-VT), Richard Blumenthal (D-CT), Angus King (I-ME), Ron Wyden (D-OR), Maggie Hassan (D-NH), Dianne Feinstein (D-CA), Amy Klobuchar (D-MN), Debbie Stabenow (D-MI), Dick Durbin (D-IL), Chris Murphy (D-CT), and Doug Jones (D-AL).

A PDF of the letter can be found here. Full text can be found below. 

Dear Acting Director English and Director Mulvaney,

We write to express serious concerns that, according to recent news reports, the Consumer Financial Protection Bureau (CFPB) may have halted an investigation into the massive Equifax data breach, which compromised the personal information of 145.5 million Americans. 

The Equifax breach exposed significant gaps in cybersecurity standards in an industry that collects a substantial amount of personal information on virtually every adult in the country.  The three largest consumer reporting agencies alone collect information on more than 200 million Americans—information that is used in more than 3 billion consumer reports a year.  The data collected and reported by consumer reporting agencies determines Americans’ access to credit and the cost of that credit for individuals and small businesses.  This data also impacts Americans’ ability to get a job or secure housing.  By letting criminals gain access to its databases, Equifax has put nearly half the US population at risk for identity theft and fraud, which can ruin the financial lives of its victims and increase risk in our financial system. 

Unfortunately, in the immediate aftermath of the breach, Equifax’s response caused more consumer harm and confusion.  Just to name a few examples, the company responded by promoting its affiliated paid credit monitoring service (i.e., LifeLock), asking consumers to waive their rights to access free credit monitoring, and charging consumers to protect their data by freezing their credit reports.  Not only do we need to better understand how this breach has impacted consumers, we also must ensure that consumer reporting agencies are taking the steps necessary to mitigate this harm—not misleading consumers or taking advantage of the situation for their own financial gain.

As established by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has a statutory mandate to implement and enforce federal consumer protection laws.  This mandate specifically includes protecting consumers from “unfair, deceptive, or abusive acts and practices” and ensuring that “federal consumer financial laws are enforced consistently.”  Dodd-Frank specifically includes the Fair Credit Reporting Act as one of the enumerated federal consumer financial laws.  The CFPB also has clear supervisory authority over the largest consumer reporting agencies.  Consumer reporting agencies and the data they collect play a central role in consumers’ access to credit and the fair and competitive pricing of that credit.  Therefore, the CFPB has a duty to supervise consumer reporting agencies, investigate how this breach has or will harm consumers, and bring enforcement actions as necessary. 

We are deeply troubled by recent news reports that, under Director Mulvaney’s leadership, the CFPB may have stopped its investigation into the Equifax breach.  According to these reports, the CFPB has not taken even the most preliminary steps to conduct an investigation.  While we are aware of reports that the Federal Trade Commission (FTC) may be taking the lead in investigating Equifax’s failure to maintain adequate data security standards, the CFPB still has a duty to investigate the harm to consumers and whether other federal consumer financial laws have been violated.  We are also concerned that the CFPB appears to be scaling back its supervision of large consumer reporting agencies.  The agency has reportedly scrapped plans to conduct on-site exams of Equifax and other consumer reporting agencies and turned down offers from the Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency to help with such on-site exams.

The responsibility of consumer reporting agencies as custodians of consumers’ personal and financial information is of paramount importance to us and our constituents.  Several committees in both the House and Senate have held hearings to investigate the causes of the breach and the inadequate post-breach response.  The CFPB has a statutory mandate to participate in this process by conducting an investigation.  If that investigation exposes wrongdoing or consumer harm, the CFPB has the authority, and indeed a duty, to bring appropriate enforcement actions.

We respectfully ask for more information about the CFPB’s actions with respect to investigating the Equifax breach.  Specifically, please answer the following questions by February 19, 2018:

1.      In September, then-CFPB Director Richard Cordray announced that the CFPB would begin a probe into the Equifax breach.  Has the CFPB stopped this or any other investigation related to this matter?

a.      If so, why was that or any investigation halted?

b.      Who directed the ending of any investigation?

2.      Is the CFPB planning to conduct on-site exams of Equifax and the other consumer reporting agencies under its supervisory authority?

a.      Has the CFPB conducted an examination of a consumer reporting agency following the Equifax hack?

3.      If the CFPB is conducting an investigation, what specific steps has the CFPB taken pursuant to this investigation?

a.      Has the CFPB issued Civil Investigative Demands (CIDs)?

b.      Has the CFPB interviewed Equifax personnel?

c.       Have the CFPB personnel examined Equifax systems or gone onsite to Equifax facilities?

4.      Is the CFPB coordinating with the FTC, state law enforcement officials, or other Federal regulators in their investigations?


Thank you for your prompt attention to this important issue.

Sincerely,


###

WASHINGTON — U.S. Sen. Mark R. Warner, a member of the Senate Banking Committee, and Sen. Tim Kaine (both D-VA) joined a group of 40 Senate Democrats in standing up for the Consumer Financial Protection Bureau’s (CFPB) independence and power to obtain justice for consumers who have been wronged by large financial institutions. 

In a letter today, the Senators urged Senate leaders Mitch McConnell and Chuck Schumer to preserve the agency’s independent funding stream and protect the CFPB from political interference. The Consumer Financial Protection Bureau’s independent funding structure has been key to its success, which in just six years has returned nearly $12 billion to more than 29 million impacted consumers.

“The administration has already undermined the effectiveness of the CFPB by appointing Office of Management and Budget Director Mick Mulvaney as part-time Director of the Bureau,” the Senators wrote in a letter. “Altering the funding stream of the Consumer Financial Protection Bureau would further jeopardize the agency and its ability to conduct independent investigations into financial wrongdoing. The Dodd-Frank Wall Street Reform and Consumer Protection Act established the CFPB as an independent agency to protect it from political interference by Congress or the Executive Branch.”

In addition to Warner and Kaine, the letter was signed by Sens. Jeff Merkley (D-OR), Sherrod Brown (D-OH), Elizabeth Warren (D-MA), Catherine Cortez Masto (D-NV), Bernie Sanders (I-VT), Kirsten Gillibrand (D-NY), Edward J. Markey (D-MA), Mazie K. Hirono (D-HI), Jack Reed (D-RI), Sheldon Whitehouse (D-RI), Bob Menendez (D-NJ), Maggie Hassan (D-NH), Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Debbie Stabenow (D-MI), Cory Booker (D-NJ), Chris Van Hollen (D-MD), Bob Casey (D-PA), Gary Peters (D-MI), Tammy Duckworth (D-IL), Ben Cardin (D-MD), Maria Cantwell (D-WA), Dianne Feinstein (D-CA), Bill Nelson (D-FL), Ron Wyden (D-OR), Michael Bennet (D-CO), Brian Schatz (D-HI), Patty Murray (D-WA), Kamala Harris (D-CA), Tom Udall (D-NM), Dick Durbin (D-IL), Chris Murphy (D-CT), Tina Smith (D-MN), Tom Carper (D-DE), Jeanne Shaheen (D-NH), Martin Heinrich (D-NM), Joe Donnelly (D-IN), and Amy Klobuchar (D-MN).

Sens. Warner and Kaine have urged President Trump to swiftly nominate a permanent director of the CFPB who will put working families ahead of Wall Street.

The full text of the letter is available here and below.

 

January 17, 2018 

 

Dear Majority Leader McConnell and Minority Leader Schumer,

As Congress works to finalize the Fiscal Year 2018 Appropriations bill, we respectfully request that you reject any language that alters the funding stream of the Consumer Financial Protection Bureau (CFPB). Independent funding for the CFPB is critical for the agency to continue vigorously enforcing consumer protection laws without any political interference. We write to highlight the importance of excluding any such language because the recommendation and explanatory statement for the FY2018 Financial Services and General Government Appropriations bill regrettably included language to do just that. 

The administration has already undermined the effectiveness of the CFPB by appointing Office of Management and Budget Director Mick Mulvaney as part-time Director of the Bureau. Altering the funding stream of the Consumer Financial Protection Bureau would further jeopardize the agency and its ability to conduct independent investigations into financial wrongdoing. The Dodd-Frank Wall Street Reform and Consumer Protection Act established the CFPB as an independent agency to protect it from political interference by Congress or the Executive Branch. To ensure its independence, the CFPB receives its funding from the Federal Reserve, rather than from the Congressional appropriations process. 

The CFPB was designed with an independent Director and an independent funding stream and has successfully advocated on behalf of hardworking Americans. The CFPB’s funding should not be treated any differently from the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the National Credit Union Administration (NCUA), or the Federal Reserve. Subjecting any banking regulator, including the CFPB, to the appropriations process would jeopardize the ability of that agency to fulfill its mission and hold bad actors accountable. 

The CFPB has done its job well and there is no basis for dramatically altering its funding source and undermining its ability to protect consumers.  In just six years, the CFPB has returned $11.9 billion to over 29 million cheated American consumers. From when it opened its doors in 2011 through 2016, the CFPB brought a total 164 enforcement cases. Comparatively, during the height of predatory lending crisis from 2000 to 2008, the five federal financial regulators, including the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the now defunct Office of Thrift Supervision (OTS), the Federal Reserve Board, and the Federal Trade Commission (FTC), brought a total of only 79 consumer enforcement actions – despite the rampant consumer abuses and frauds that occurred in the build up to the 2008 financial crisis. 

The CFPB has fought against Wall Street abuses, including its record-breaking settlement in the Wells Fargo fake-accounts matter. The agency worked alongside the Office of City Attorney for Los Angeles and the OCC to uncover the bank’s illegal practices that led to millions of Americans having accounts opened in their names without their knowledge. Most recently, the CFPB returned more than $100 million to consumers in response to the credit repair company Morgan Drexen charging illegal fees. 

We appreciate your consideration of our request to preserve the independent funding stream of the CFPB and look forward to working with you on this important matter for all American consumers.

Sincerely,

###

WASHINGTON — U.S. Sens. Mark R. Warner (D-VA) and Elizabeth Warren (D-MA) introduced today the Data Breach Prevention and Compensation Act to hold large credit reporting agencies (CRAs)—including Equifax—accountable for data breaches involving consumer data. The bill would give the Federal Trade Commission (FTC) more direct supervisory authority over data security at CRAs, impose mandatory penalties on CRAs to incentivize adequate protection of consumer data, and provide robust compensation to consumers for stolen data.

In September 2017, Equifax announced that hackers had stolen sensitive personal information – including Social Security Numbers, birth dates, credit card numbers, driver’s license numbers, and passport numbers – of over 145 million Americans. The attack highlighted that CRAs hold vast amounts of data on millions of Americans but lack adequate safeguards against hackers. Since 2013, Equifax has disclosed at least four separate hacks in which sensitive personal data was compromised.

“In today’s information economy, data is an enormous asset. But if companies like Equifax can’t properly safeguard the enormous amounts of highly sensitive data they are collecting and centralizing, then they shouldn’t be collecting it in the first place,” said Sen. Warner. “This bill will ensure that companies like Equifax – which gather vast amounts of information on American consumers, often without their knowledge – are taking appropriate steps to secure data that’s central to Americans’ identity management and access to credit.”

“The financial incentives here are all out of whack – Equifax allowed personal data on more than half the adults in the country to get stolen, and its legal liability is so limited that it may end up making money off the breach,” said Sen. Warren. “Our bill imposes massive and mandatory penalties for data breaches at companies like Equifax – and provides robust compensation for affected consumers – which will put money back into peoples’ pockets and help stop these kinds of breaches from happening again.”

The Data Breach Prevention and Compensation Act would establish an Office of Cybersecurity at the FTC tasked with annual inspections and supervision of cybersecurity at CRAs. It would impose mandatory, strict liability penalties for breaches of consumer data beginning with a base penalty of $100 for each consumer who had one piece of personal identifying information (PII) compromised and another $50 for each additional PII compromised per consumer. To ensure robust recovery for affected consumers, the bill would also require the FTC to use 50% of its penalty to compensate consumers and would increase penalties in cases of woefully inadequate cybersecurity or if a CRA fails to timely notify the FTC of a breach.

The Data Breach Prevention and Compensation Act is supported by cybersecurity experts and consumer groups:

“U.S. PIRG commends Senators Warren and Warner for the Data Breach Prevention and Compensation Act. It will ensure that credit bureaus protect your information as if you actually mattered to them and it will both punish them and compensate you when they fail to do so,” said U.S. PIRG Consumer Program Director, Ed Mierzwinski.

"This bill establishes much-needed protections for data security for the credit bureaus. It also imposes real and meaningful penalties when credit bureaus, entrusted with our most sensitive financial information, break that trust," said National Consumer Law Center staff attorney, Chi Chi Wu. 

"Senator Warner and Senator Warren have proposed a concrete response to a serious problem facing American consumers,” said Electronic Privacy Information Center President, Marc Rotenberg.

"This bill creates greater incentive for these companies to handle our data with care and gives the Federal Trade Commission the tools that it needs to hold them accountable,” said Director of Consumer Protection and Privacy at Consumer Federation of America, Susan Grant.

Sen. Warner has been a leader in calling for better consumer protections from data theft. Following the Equifax data breach, Sen. Warner asked the Federal Trade Commission (FTC) to examine whether credit reporting agencies such as Equifax have adequate cybersecurity safeguards in place for “the enormous amounts of sensitive data they gather and commercialize.” He slammed the credit bureau for its cybersecurity failures and weak response at a Banking Committee hearing with Securities and Exchange Commission (SEC) Chairman Jay Clayton last year. Similarly, in the aftermath of the 2013 Target breach that exposed the debit and credit card information of 40 million customers, Sen. Warner chaired the first congressional hearing on protecting consumer data from the threat posed by hackers targeting retailers’ online systems. Sen. Warner has also partnered with the National Retail Federation to establish an information sharing platform that allows the industry to better protect consumer financial information from data breaches.Warner, Warren Introduce Legislation to Hold Credit Reporting Agencies like Equifax Accountable for Data Breaches 

To view a fact sheet about the legislation, click here. The bill text can be found here.  

 

###

WASHINGTON — U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) joined 44 Senators in a letter urging President Trump to follow the law and swiftly nominate a permanent director of the Consumer Financial Protection Bureau (CFPB) who will put working families ahead of Wall Street.

In their letter, the senators cited the CFPB’s much-needed “aggressive enforcement and supervision,” which has resulted in $12 billion in relief to 29 million American consumers who were cheated by financial companies.

The senators also expressed serious concerns with the White House installing Budget Director Mick Mulvaney as part-time acting director on November 24th. Mulvaney has a clear record opposing the CFPB, calling it a “sick joke,” and has sought to abolish it.

In his first act as part-time acting director, Mulvaney moved to freeze the payments to working Americans who’ve been cheated.

“Assigning leadership of the CFPB to someone who already has a full-time job reporting to the White House and who does not believe in the CFPB’s mission jeopardizes the agency’s independence and effectiveness,” the senators wrote.  “We urge you to nominate a CFPB Director who will bring to the job both bipartisan support and a track record of being tough on Wall Street. Following the Dodd-Frank succession provision and nominating a Director who will fight for consumers allows the CFPB to continue its work without political interference.”

The full text of the letter is below and available here.

 

The Honorable Donald J. Trump

President

The White House

1600 Pennsylvania Avenue NW

Washington, D.C. 20500

 

Dear President Trump,

After the 2008 financial crisis wiped out trillions of dollars of wealth and the jobs of millions of Americans, Congress passed important financial reforms and created the Consumer Financial Protection Bureau (CFPB), an independent watchdog to protect people from financial scams.[1]

Through aggressive enforcement and supervision, CFPB actions have resulted in $12 billion in relief for more than 29 million American consumers who were cheated by financial companies.[2] The CFPB has taken almost 200 enforcement actions: against mortgage schemes that rip off struggling borrowers, against predatory financial firms that set up shop next to military bases to target servicemembers, against scam for-profit schools that take advantage of veterans’ benefits, and against companies that train their employees to trap consumers in debt.[3]

These are the enforcement results that the National Fraternal Order of Police and a bipartisan group of state attorneys general expected when they endorsed Rich Cordray’s nomination and said he would be “an effective partner in combating fraud and other illegal schemes[.]”[4]

His nomination passed the Senate with 66 votes, including 12 Republicans.[5]

In a 2016 campaign speech, you said “…[T]his election is a choice between taking our government back from the special interests, or surrendering our last scrap of independence to their total and complete control.”[6] Polling shows that the vast majority of Americans agree that the CFPB has been doing great work holding special interests accountable. 74% of Americans -- Republicans and Democrats -- approve of the CFPB’s mission and 55% of Republicans who voted for you believe that the CFPB should be left alone to do its work or even be given expanded authority to do more.[7]

Assigning leadership of the CFPB to someone who already has a full-time job reporting to the White House and who does not believe in the CFPB’s mission jeopardizes the agency’s independence and effectiveness. We urge you to nominate a CFPB Director who will bring to the job both bipartisan support and a track record of being tough on big banks and other financial firms that rip off consumers. Following the Dodd-Frank succession provision and nominating a Director who will fight for consumers allows the CFPB to continue its work without political interference.

Please stand up for American military service members and veterans, students, seniors and workers.

Sincerely, 

###

WASHINGTON – U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) urged Federal Communications Commission (FCC) Chairman Ajit Pai to delay a planned December 14th vote to roll back net neutrality rules until an investigation can be completed into reports that internet “bots” – automated computer programs designed to pose as people – filed hundreds of thousands of comments to the FCC during the net neutrality policymaking process.

“A free and open Internet is vital to ensuring a level playing field online, and we believe that your proposed action may be based on an incomplete understanding of the public record in this proceeding,” the Senators wrote in a letter to Chairman Pai. “In fact, there is good reason to believe that the record may be replete with fake or fraudulent comments, suggesting that your proposal is fundamentally flawed.”

“Without additional information about the alleged anomalies surrounding the public record, the FCC cannot conduct a thorough and fair evaluation of the public’s views on this topic, and should not move forward with a vote on December 14, 2017,” the Senators continued.

“The FCC must invest its time and resources into obtaining a more accurate picture of the record as understanding that record is essential to reaching a defensible resolution to this proceeding,” the Senators concluded.

In addition to Sens. Warner and Kaine, the letter was signed by Sens. Maggie Hassan (D-NH), Jeanne Shaheen (D-NH), Sherrod Brown (D-OH), Bernie Sanders (I-VT), Ed Markey (D-MA), Catherine Cortez Masto (D-NV), Sheldon Whitehouse (D-RI), Tammy Duckworth (D-IL), Michael Bennet (D-CO), Richard Blumenthal (D-CT), Elizabeth Warren (D-MA), Gary Peters (D-MI), Patty Murray (D-WA), Amy Klobuchar (D-MN), Ron Wyden (D-OR), Tammy Baldwin (D-WI), Mazie Hirono (D-HI), Chuck Schumer (D-NY), Jack Reed (D-RI), Ben Cardin (D-MD), Dianne Feinstein (D-CA), Jeff Merkley (D-OR), Kirsten Gillibrand (D-NY), Angus King (I-ME), Al Franken (D-MN), and Cory Booker (D-NJ). 

The full text of the letter appears below. A copy of the letter is available here.

 

December 4, 2017

 

The Honorable Ajit Pai

Chairman

Federal Communications Commission

445 12th Street Southwest

Washington, DC 20554

 

Dear Chairman Pai:

 

We are deeply concerned by your recently released proposal to roll back critical consumer protections by dismantling the Federal Communications Commission’s (FCC) current net neutrality rules. A free and open Internet is vital to ensuring a level playing field online, and we believe that your proposed action may be based on an incomplete understanding of the public record in this proceeding. In fact, there is good reason to believe that the record may be replete with fake or fraudulent comments, suggesting that your proposal is fundamentally flawed.

 

To this end, we request a thorough investigation by the FCC into reports that bots may have interfered with this proceeding by filing hundreds of thousands of comments. Furthermore, an additional 50,000 consumer complaints seem to have been excluded from the public record in this proceeding, according to Freedom of Information Act (FOIA) requests filed by the National Hispanic Media Coalition.  Without additional information about the alleged anomalies surrounding the public record, the FCC cannot conduct a thorough and fair evaluation of the public’s views on this topic, and should not move forward with a vote on December 14, 2017. 

 

New York Attorney General Eric Schneiderman has spent the past six months conducting an investigation into the fraudulent comments, and found that “hundreds of thousands” of comments may have impersonated New York residents, a violation of state law. He further asserts that the FCC has not cooperated with requests for additional data and information. Data scientist Jeff Kao has also run an analysis of the public record, and estimates that over a million comments filed in support of repealing net neutrality may have been fake. These reports raise serious concerns as to whether the record the FCC is currently relying on has been tampered with and merits the full attention of, and investigation by, the FCC before votes on this item are cast. 

 

A transparent and open process is vitally important to how the FCC functions. The FCC must invest its time and resources into obtaining a more accurate picture of the record as understanding that record is essential to reaching a defensible resolution to this proceeding.  As a result, we are requesting that you delay your planned vote on this item until you can conduct a thorough review of the state of the record and provide Congress with greater assurance of its accuracy and completeness.  

 

Thank you for your immediate attention to this matter.

 

Sincerely,

 

 

###

 

WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), Ranking Member of the Senate Banking Subcommittee on Securities, Insurance and Investment, today pressed Uber CEO Dara Khosrowshahi on the company’s recent disclosure that hackers accessed the personal information of 57 million users last year.  Uber paid the hackers $100,000 to pledge to destroy the data – which included the names and driver’s license numbers of 600,000 drivers, and names, phone numbers, and email addresses of millions of riders – and did not disclose the hack to regulators or users until last week.

Warner posed the following questions to Khosrowshahi: 

  1. According to reports, Uber’s systems were breached after the attackers discovered log-in credentials to an AWS account used to handle payments. Why weren’t more robust access management mechanisms, including strong multi-factor authentication, enabled to prevent unauthorized access to passenger and driver data?
  2. Who conducted the initial investigation for Uber that successfully identified the hackers? What “assurances” were provided by the hackers to prove they did, in fact, delete the compromised data? 
  3. Unlike ransomware payments, in which payment is made to recover or regain access to inaccessible data or systems, it appears the motivation behind this payment was principally to prevent the public or authorities from learning of the breach. What rationale was provided by senior executives for covering up this breach?
  4. Uber has alleged that it was required to provide information relating to the breach and subsequent cover-up to prospective investors. Can you explain why Uber chose not to disclose the breach to drivers and users prior to, or at least at the same time as, a prospective investor?
  5. Reports indicate that Uber successfully “tracked down the hackers and pushed them to sign nondisclosure agreements.” While some information necessary to accomplish this could certainly have been gleaned from traditional digital forensic tools, these reports – combined with Uber’s past pattern of conduct – raise serious questions about how Uber was able to track down the criminals who breached Uber’s systems and blackmailed the company, and whether these actions might have constituted violations of the Computer Fraud and Abuse Act. As you know, no private right exists for companies to “hack back” those who compromise their systems. In the process of tracking down these hackers, did Uber or any authorized party acting on its behalf engage in unauthorized access of third party systems?
  6. Uber’s decision to identify the responsible parties and commit them to a non-disclosure agreement thwarts law enforcement’s ability to bring criminal hackers to justice. To the extent Uber had lawfully acquired information enabling it to identify the hackers who had compromised its systems, ensure they would abide by agreements to delete the data and not to disclose the breach, and transfer them $100,000, it conceivably had enough information at hand to assist law enforcement in the apprehension of these criminals. Why did Uber choose not to provide relevant forensic information to law enforcement and has this information been provided to law enforcement in the last week?

Sen. Warner is a former technology executive and the co-founder of the Senate’s bipartisan Cybersecurity Caucus. Sen. Warner is working to finalize bipartisan legislation to create a comprehensive, nationwide and uniform data breach standard, requiring timelier consumer notification for breaches of financial data and other sensitive information, and setting national data-protection standards for companies handling sensitive personal information. 

A PDF of the signed letter is available here.

 

 

###

WASHINGTON – U.S. Sen. Mark R. Warner (D-VA) released the below statement on the Federal Communications Commission's plan to repeal net neutrality rules:

“The FCC Chairman has decided to move forward to repeal net neutrality rules without any plan in place to uphold longstanding open internet principles supported by both Democratic and Republican Administrations. I am deeply concerned that the FCC’s current plan would amount to a green light for potential anti-competitive practices by certain internet service providers, with the Chairman signaling the Commission’s unwillingness to protect consumers and small businesses from potential abuse.”

WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), a member of the Senate Banking Committee, today joined Republicans and Democrats, including Senate Banking Committee Chairman Mike Crapo (R-ID) and Sen. Tim Kaine (D-VA), to introduce the Economic Growth, Regulatory Relief and Consumer Protection Act, bipartisan legislation to reduce regulatory burdens on community banks and credit unions and provide new protections to consumers.

The legislation is the result of bipartisan negotiations among Warner, Crapo, and Banking Committee members Sens. Joe Donnelly (D-IN), Heidi Heitkamp (D-ND) and Jon Tester (D-MT).

“This bipartisan bill is the result of years of tough negotiations among Democrats and Republicans,” said Sen. Warner. “The goal is simple: to help Main Street by rolling back unnecessary and burdensome regulations on credit unions and small community banks while ensuring that larger banks remain subject to the rules I helped put in place after the financial crisis to prevent another meltdown on Wall Street. This proposal makes targeted, commonsense fixes that will provide tangible relief to the community banks that are lifelines for smaller and rural communities. It also strengthens protections for veterans, the elderly and other consumers, and encourages community-based lending to boost economic growth and create jobs.”

“A strong and vibrant economy is important for American consumers, businesses, and the stability of the financial sector,” said Chairman Crapo. “The bipartisan proposals on which we have agreed will significantly improve our financial regulatory framework and foster economic growth by right-sizing regulation, particularly for smaller financial institutions and community banks.”

Following the 2008 financial meltdown, Sen. Warner helped write and pass into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, and he continues to support the important reforms included in the law. The legislation introduced today is carefully written to provide needed regulatory relief to main street—community banks and credit unions—which were inadvertently burdened by rules and regulations intended to hold Wall Street accountable. This bill will promote economic growth by making commonsense reforms to increase consumer lending, while protecting consumers.

Among provisions in the regulatory relief package are several proposals to protect and deliver relief to Virginia consumers:

  • Community Banks and Credit Unions: This package includes a number of provisions related to community banks and credit unions that would increase their ability to extend credit to Virginia small businesses and families, while maintaining important consumer protections.
  • Free Annual Credit Freeze for Consumers: This provision would require credit bureaus to include one free credit freeze and a free credit unfreeze per year, which would help protect consumers after the massive Equifax data breach that may have compromised the personal information of approximately 145 million Americans.
  • Protecting Veterans Credit: This provision would protect the credit ratings of veterans wrongly penalized by medical bill payment delays by the Department of Veterans Affairs (VA). This measure would prohibit medical debt from services received through the Choice Program and other VA community care programs from being reported to credit reporting agencies for one year. In addition it would establish a dispute process for veterans seeking to remove adverse actions already on their reports.

Full bill text is available here. A section-by-section can be accessed here.

“I thank Virginia's Congressional Delegation for their support of this legislation. Virginia's more than 725,000 veterans have served and sacrificed for our Nation and our Commonwealth. This service can sometimes lead to wounds and injuries that require ongoing care - which is not always fully covered by their veterans benefits. When they must incur out of pocket expenses for themselves and their families’ medical care, we must ensure that this does not also come with a bad credit score that could affect them for years to come. This bill will help our veterans in addressing credit issues or preventing a small credit problem from escalating,” said Virginia Secretary of Veterans and Defense Affairs Carlos Hopkins.

Virginia Bankers Association (VBA) President and CEO Bruce Whitehurst stated, “This package represents an important first step toward better tailoring of regulation to allow banks to serve their customers and communities more effectively and efficiently, much to their benefit. This bipartisan compromise also underscores the fact that the Dodd-Frank Act of 2010 took the regulatory pendulum too far and created unintended consequences for borrowers. It is great to see movement toward a more balanced approach to financial regulation and we appreciate the leadership of Senators Warner and Kaine.”

“This is a major step forward. Our community bankers are eager to do more to build their local economies, but over-regulation holds them back. The best provisions in this bill make getting a mortgage less complicated and more possible, and other good provisions simplify rules and reports, freeing bankers to do more good work with their customers and their communities,” said Virginia Association of Community Banks (VACB) President Steve Yeakel. “In particular, we want to acknowledge the leadership of both Senator Warner, who helped to forge the compromise, and Senator Kaine, whose early support gives the bill a strong foundation and a real chance at success on the Senate floor.”

“ICBA strongly supports the bipartisan regulatory relief package announced today and thanks Senate Banking Committee Chairman Mike Crapo and Sens. Joe Donnelly, Heidi Heitkamp, Jon Tester and Mark Warner for driving this agreement,” Independent Community Bankers of America (ICBA) President and CEO Camden R. Fine said. “Community bank regulatory relief is needed to improve lending and strengthen economic growth at the local level. We are pleased to see many provisions of ICBA’s Plan for Prosperity included in the agreement and thank all senators from both sides of the aisle who have contributed to this important initiative.”

“NAFCU thanks Chairman Crapo and his Democratic partners in the Senate for including provisions in this package that would lead to regulatory relief for credit unions,” said National Association of Federally-Insured Credit Unions (NAFCU) President and CEO Dan Berger. “We look forward to working with members of the Senate Banking Committee, their staff and other senators as this package moves through the legislative process. This bill is a step in the right direction, and we will continue to push for more relief for the industry and its 110 million member-owners.”

“This bill includes credit union-specific provisions that provide meaningful regulatory relief, a sign that policymakers are paying close attention to the needs of credit union members,” Credit Union National Association (CUNA) President/CEO Jim Nussle said. “We thank Sen. Crapo and his colleagues for working across party lines to advance regulatory relief legislation, and we look forward to continuing to work closely with them as the bill moves through the legislative process.”

In addition to Sens. Warner and Kaine, the bill was introduced by Democratic Sens. Joe Donnelly (D-IN), Heidi Heitkamp (D-ND), Jon Tester (D-MT), Joe Manchin (D-WV), Claire McCaskill (D-MO), Gary Peters (D-MI) and Michael Bennet (D-CO). Republican sponsors of the bill are Sens. Mike Crapo (R-ID), Bob Corker (R-TN), Tim Scott (R-SC), Tom Cotton (R-AR), Mike Rounds (R-SD), David Perdue (R-GA), Thom Tillis (R-NC), John Kennedy (R-LA), Jerry Moran (R-KS) and Jim Risch (R-ID). The bipartisan bill was also sponsored by Sen. Angus King (I-ME).

###

Today, U.S. Sens. Mark R. Warner (D-VA), Amy Klobuchar (D-MN) and Claire McCaskill (D-MO) led a group of 15 Senators in urging the Federal Election Commission (FEC) to take immediate action to improve transparency for political advertisements online. Today is the final day of a month-long comment period considering whether the FEC should update rules that currently exempt many online ads from the requirements applied to political ads that air on television and radio.