Consumer Financial Protection Agency

The Congressional Research Service (CRS) recently issued a comparative analysis of the Consumer Financial Protection Agency Act as proposed by the Obama Administration and HR 3126, the Consumer Financial Protection Agency Act of 2009, introduced by Rep. Barney Frank.

The Obama proposal, also called the Consumer Financial Protection Agency Act of 2009 (CFPA Act) (pdf, 152pp), is based on a report (pdf, 89pp) that presents five objectives:
  • Promote robust supervision and regulation of financial firms
  • Establish comprehensive supervision and regulation of financial markets
  • Protect consumers and investors from financial abuse
  • Improve tools for managing financial crises
  • Raise international regulatory standards and improve international cooperation
CRS questions whether the CFPA, as a dedicated agency for consumer protection, would be an improvement: whether it would add a redundant layer of regulation to federal banking statutes; whether it would stifle financial innovation; and whether the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) would retain their consumer protection role in securities and derivatives markets.

Financial Regulatory Reform: Analysis of the Consumer Financial Protection Agency (CFPA) as Proposed by the Obama Administration and H.R. 3126, R40696 (pdf, 14pp/168kB), from Open CRS, July 17, 2009

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12 to life

New York Time's editorial for July 27 online and July 28 in print expresses concern for the children caught in the adult court machinery.
[States] have continued to mete out barbaric treatment - including life sentences - to children whose cases should rightly be handled through the juvenile courts.
Suggesting Congress should correct these states' practices by amending the Juvenile Justice and Delinquency Prevention Act of 1974, NYT mentions a new study by Michele Deitch, of the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin:
According to the study, every state allows juveniles to be tried as adults, and more than 20 states permit preadolescent children as young as 7 to be tried in adult courts.
The study reports such alarming findings as:
  • Policy makers lack reliable data on the numbers of children "shunted into the adult system by state statutes or prosecutors."
  • Children 13 and under who commit crimes like burglary and theft are just as likely to be sent to adult courts as children who commit serious acts of violence against people.
  • Transferring juveniles to the adult system is counter-productive as a strategy for preventing or reducing violence.
  • Juveniles held in adult facilities are five times as likely to be victims of sexual abuse and rape as youth kept in the juvenile system.
  • Children under age 14 are as poorly prepared to participate in their trials as adults with severe mental illness.
The study concludes offering ten policy changes, among which include:
  • Keep young children in the juvenile justice system.
  • Disallow mandatory sentencing of young children in adult criminal court.
  • Always provide an opportunity for parole for young children transferred to the adult criminal justice system.
  • Young children in the adult criminal justice system should be housed in juvenile facilities.
  • Improve data collection on young children in the adult criminal justice system.

From Time Out to Hard Time: Young Children in the Adult Criminal Justice System
(pdf/134 pp, 1.1 MB) Lyndon B. Johnson School of Public Affairs, July 2009

Executive summary (pdf/4pp, 228kB)

LBJ School Alumni Discuss Work: Survey of Statutes of 50 States Began as Supreme Court Certiorari Petition (html)

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Recent GAO reports

From the Government Accountability Office (GAO):

COMBATING GANGS: Better Coordination and Performance Measurement Would Help Clarify Roles of Federal Agencies and Strengthen Assessment of Efforts, GAO-09-708 (pdf 89pp/2.5MB), July 24, 2009

There are approximately 1 million gang members in the U.S., operating in every state, according to Dept. of Justice (DOJ) estimates. A problem of urban areas, in the 1980s and 1990s gangs began migrating into suburban and rural communities as well. DOJ and Immigration and Customs Enforcement (ICE) of the Dept. of Homeland Security (DHS) are the key federal agencies combating gang crime. GAO reviews federal programs and their collaboration with state and local agencies in anti-gang efforts.

WILDLAND FIRE MANAGEMENT: Federal Agencies Have Taken Important Steps Forward, but Additional Action Is Needed to Address Remaining Challenges, GAO-09-906T (pdf, 19pp/256Kb), July 21, 2009

The Forest Service and four Dept. of Interior agencies are responsible for wildland fires on federal lands. In the past decade, both average annual acreage burned and federal appropriations for fire management have doubled. In this testimony, GAO recommends: developing a cohesive strategy, establishing a cost-containment strategy, clearly defining financial responsibilities for fires that cross jurisdictions, and mitigating effects of rising fire costs on other agency programs.

SCHOOL MEAL PROGRAMS: Experiences of the States and Districts That Eliminated Reduced-price Fees, GAO-09-584 (pdf, 44pp/648kB), July 17, 2009

In FY2008, 31 million children participated in the National School Lunch Program and more than 10 million in the School Breakfast Program, both providing meals for free or at reduced price for low-income students, based on federal poverty guidelines. Some states and school districts have eliminated the reduced-price fee (ERP) programs, providing free meals to increase participation. GAO reviewed ERP programs and concluded:
Some state- and district-level officials believe that there is an even greater need for this type of program at a time when some families are experiencing increased economic hardship. However, state and local fiscal conditions have continued to deteriorate since we began our audit work and the effect of the changes in the economic climate on ERP programs is unknown.

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Steady pays off for 401(k)s

From its annual EBRI/ICI 401(k) database update report, the Employee Benefit Research Institute (EBRI) examined how a consistent group of participants accumulated retirement assets for the eight-year period 1999-2007 (consistent meaning those with accounts at the end of each year from 1999 thru 2007).

For consistent participants at year-end 2007:
  • The average 401(k) account grew 9.5% annually to $137,430, double the average account balance among all database participants.
  • The median 401(k) account grew 15.2% annually to $76,946, more than four times the median account balance among all database participants.

What Does Consistent Participation in 401(k) Plans Generate? July 2009
      Issue Brief (pdf, 16pp/368kB),
      Executive Summary



Search and seizure in the cloud

Also in the June 2009 issue of the Minnesota Law Review is a Note on applying the Fourth Amendment to privacy in the cloud, where data is stored on distant servers. "With individuals and entities increasingly using the cloud to conduct business and store data, it is important to have a clear framework within which the government may conduct a search that meets constitutional requirements." The author proposes that courts should:
  • Recognize society's reasonable expectation of privacy in the cloud as the court did with the telephone in Katz
  • Adopt the virtual-container theory to standardize privacy appraisals in the cloud, and recognize virtual-concealment efforts
  • Treat cloud service providers as virtual landlords and apply the third-party doctrine narrowly to cloud content

Note, Defogging the Cloud: Applying Fourth Amendment Principles to Evolving Privacy Expectations in Cloud Computing (pdf, 35pp/236kB), Minnesota Law Review, June 2009

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Kelo backlash

In 2005 the U.S. Supreme Court held in Kelo v. City of New London that private property can be taken for private economic development to serve a public purpose. In the June 2009 issue of the Minnesota Law Review, Prof. Ilya Somin of George Mason University School of Law reviews the state legislation generated by Kelo. Somin writes: "The Kelo backlash probably resulted in more new state legislation than any other Supreme Court decision in history," and continues:
This Article challenges the validity of claims that the political backlash to Kelo has provided the same level of protection for property owners as would a judicial ban on economic development takings. It is the first comprehensive analysis of the Kelo backlash to date, and finds that the majority of the newly enacted post-Kelo reform laws are likely to be ineffective. It also suggests a tentative explanation for the often ineffective nature of post-Kelo reform: widespread political ignorance that enables state and federal legislators to pass off primarily cosmetic laws as meaningful reforms.

The Limits of Backlash: Assessing the Political Response to Kelo
(pdf, 79pp/424kB), Minnesota Law Review, June 2009



Just In...second life grid

Kimberly Rufer-Bach of The Magicians, a 3D interactive software development company, has authored a guide for organizations considering Second Life. The virtual world offers not only unbounded environs for personal development and social dynamics, but provides a platform for the expanded development of organizations as well.

Drawing on her involvement in several government agencies' and educational institutions' projects to establish their Second Life presence, Ms. Rufer-Bach initiates the reader into the creative and sometimes demanding social and cultural protocols for a successful Second Life.

the second life grid, the official guide to communication, collaboration, and community engagement, by Kimberly Rufer-Bach

GV1469.25 S425 R84 2009

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Clouds in my way

Issues in Science and Technology, a National Academy of Sciences publication, is "a forum for discussion of public policy related to science, engineering, and medicine." The Summer 2009 issue currently features an article on personal computing in the Cloud.
The Internet is entering a new phase that represents a fundamental shift in how computing is done. This phase, called Cloud computing, includes activities such as Web 2.0, Web services, the Grid, and Software as a Service, which are enabling users to tap data and software residing on the Internet rather than on a personal computer or a local server.
According to the author, Michael R. Nelson, the Cloud offers users:
  • Limitless flexibility
  • Better reliability and security
  • Enhanced collaboration
  • Portability
  • Simpler devices
Mr. Nelson discusses the importance public policy decisions will have on the Cloud's development and character, and the "key policy factors" influencing its pace of progress, which include:
  • Research
  • Privacy and security
  • Access to the Cloud
  • E-government and open standards
  • Competition and antitrust
  • Wiretapping and electronic surveillance
  • Intellectual property and liability
  • Consumer protection

The Cloud, the Crowd, and Public Policy, by Michael R. Nelson
(Issues in Science and Technology, Summer 2009, html)

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Sweatshops are not a game

New York Times posted a story online Tuesday (appearing in print July 1, 2009, B4) on China's latest attempts to restrict the trade and use of virtual money, banning virtual currencies being exchanged for real world goods...
The buying and selling of the make-believe currencies used in online gaming has become so widespread that Chinese authorities fear it will affect the real economy.
NYT writes that the China Internet Network Information Center found that nearly $2 billion in virtual currency was traded in China in 2008. Real world sweatshops producing earned virtual credits later to be resold at profit to overseas customers and online marketplaces trading in virtual goods for real goods and cash are two sides of the online coin.

NYT reports Edward Castronova, a professor of telecommunications at Indiana University Bloomington, approves China's response and considers virtual currencies pose a possible threat to world economies.
As virtual currencies take over more and more purchasing power, control over the effective money supply shifts from the central bank to the game developers.
Author of such works as, Exodus to the Virtual World: How Online Fun Is Changing Reality and Synthetic Worlds: The Business and Culture of Online Games, Castronova as early as 2001 predicted:
Unlike many internet ventures, virtual worlds are making money -- with annual revenues expected to top USD 1.5 billion by 2004 -- and if network effects are as powerful here as they have been with other internet innovations, virtual worlds may soon become the primary venue for all online activity.
While describing China's current regulations to rein in online gaming as their toughest, NYT points out the activity continues to grow.

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