Durbin Amendment’s Disparate Impact on Low-Income Consumers

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Posted by Justin Sykes on Friday, April 28th, 2017, 8:51 AM PERMALINK

When the Durbin Amendment was passed as part of the Dodd-Frank Act of 2010, proponents billed the Durbin Amendment as a measure that would benefit America’s financial consumers. By instituting the anti-free market policy of price caps on debit card swipe fees, Durbin proponents promised savings by merchants would be passed onto consumers in the form of reduced prices in stores. Yet not only has this promise not come to fruition, the Durbin Amendment has now been shown to have had a disparate impact on America’s low-income financial consumers.

According to a study by the Federal Reserve Bank of Richmond, since enactment of the Durbin Amendment 75 percent of merchants surveyed in the study reported no reduction in prices and 23 percent of merchants actually increased prices since enactment.

Not only did Durbin fail to deliver relief to consumers in the form of lower prices, but as a result of Durbin price caps and other Dodd-Frank regulations, the amount of banks offering free checking accounts dropped dramatically. Banks also increased average minimum deposits, monthly checking account maintenance fees, and many eliminated debit card reward programs.

The cumulative impact of reduced access to traditional banking services resulting from Durbin and Dodd-Frank was that many low-income financial consumers were pushed out of the traditional banking system. A recent study by George Mason University found the impact of the Durbin Amendment has led over 1 million Americans being “unbanked.”

This is a direct result of Durbin’s impact on banks offering free checking accounts. In 2009 75 percent of banks offered free checking accounts. After Durbin was enacted in 2010, that number dropped to 45 percent the following year, and has now fallen to less than 40 percent today. 

Banks are estimated to have recouped approximately 30 percent of their annual revenue loss cause by the Durbin Amendment through higher bank fees, and this impact has played out in truly regressive fashion. According to an April 2017 study by the International Center for Law and Economics, in 1999 the average minimum deposit required in order to avoid fees on non-interest-bearing accounts was $562.27. That minimum fell to $109.28 in 2008, but after Durbin passed the minimum skyrocketed to $732.02 in 2012 and stands at $670.74 as of 2016.

Furthermore, before Durbin average monthly checking account maintenance fees were $5.90 in 2009, yet fees have now climbed to all time highs of $13.25. Debit card rewards programs have also been reduced, seeing a massive 30 percent drop in the availability of debit card rewards programs in the first year Durbin became effective.

While high-income households are able to absorb the impact of reduced free checking, increased minimum balance requirements, and other increases in fees resulting from Durbin, the effect on low-income households has been quite different. Since enactment of Durbin debit card adoption for lower-income households (less than $25,000 per year) has fallen by roughly 10 percentage points relative to households earning between $50,000 and $75,000 annually. 

For America’s low-income financial consumers, higher minimum requirements, the absolute destruction of free checking accounts, and increased maintenance fees means extremely reduced access too much needed traditional banking services for those who need it most. Instead of helping America’s consumers the Durbin Amendment has instead failed to pass on cost savings and increased the number of unbanked Americans. Such impacts fall hardest on the nation’s most vulnerable.

The 115th Congress should make 2017 the year that lawmakers stand up and protect American financial consumers, especially those of limited means, and repeal the failed and anti-free market price caps of the Durbin Amendment. 

 

Photo credit: Paul G. 

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ATR Statement In Support Of Title II Rollback

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Posted by Americans for Tax Reform on Thursday, April 27th, 2017, 1:59 PM PERMALINK

ATR & Digital Liberty support FCC Chairman Pai's proposal to roll back title II regulations on the Internet

On Wednesday FCC Chairman Ajit Pai announced a plan to roll back government micromanagement of the internet based on a tenuous claim evoking a half-century old monopoly telephone regulation. In contrast to the shadow politics of the FCC under the prior administration, the current Chairman has released to the public the plan for a new framework well ahead of the next FCC Open Meeting. 

Contrary to longstanding, bipartisan tradition, the most recent prior FCC leadership loudly dismissed the call for transparency, and ultimately passed an Order without giving the public opportunity to comment. Restoring the prior openness of the Commission, Chairman Pai said "you may disagree with what is in the proposed rule-making, but, this time, you will know what is in it."

The following can be attributed to Grover Norquist, President of Americans for Tax Reform:

The Telecommunications industry is now 16% of our economy – roughly the same amount as healthcare. The Obama Administration wanted government control of communications just as it wanted to control our healthcare choices through Obamacare and capital flows through Dodd-Frank.

Because of deregulation, the internet has grown into the creative and economic engine that has kept America at the forefront of worldwide innovation without meddling government bureaucrats. 

But in 2015 the Obama administration claimed government control was better than consumer control and competition. They ignored existing competition and innovation and imposed utility regulations based on a law designed for the economy of the Great Depression, known shorthand as Title II.

Customers should be able to access what they want online. Title II moves us away from this goal, not towards it. Government created utilities – a nice word for monopolies – operate like all monopolies in history.  Poorly.

Thank you to Chairman Pai for taking the steps to roll back excessive regulation.

The following can be attributed to Katie McAuliffe, Executive Director of Digital Liberty:

By rolling back Title II regulations from the Obama era, Chairman Pai’s plan, unveiled today, focuses on keeping the internet free, protecting online privacy and preventing government micromanagement of communications infrastructure. This paves the way for revitalized investment in American broadband infrastructure that will bring more jobs and economic benefits to Americans everywhere.

Chairman Pai's proposed rulemaking suggests we restore the same bipartisan approach under Clinton and Gingrich, who agreed that the aggressive regulation of the 1930 copper wire telephone network was inappropriate for the future. They were right. Since then, competition and innovation engendered by the Internet has dramatically changed every aspect of American life. 

We all agree access to online content should be preserved. We firmly disagree that this heavy-handed Title II nonsense achieves that, or anything good for that matter. Laws should be made in Congress, not at the FCC.

Photo Credit: The Hill Events


Norquist Statement in Support of Alexander Acosta to Lead DOL

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Posted by Justin Sykes on Thursday, April 27th, 2017, 1:56 PM PERMALINK

ATR President Grover Norquist today issued the following statement in support of President Trump's nominee Alexander Acosta to lead the Department of Labor (DOL):

“Senate lawmakers this week should vote to confirm Alexander Acosta to be the next Secretary of Labor so we can begin reversing some of the harm done to the American economy by the Department of Labor under President Obama. Mr. Acosta is a dedicated public servant with years of experience handling complex legal issues and a record of proven management and federal agency experience, and is a highly qualified candidate to lead the DOL.

"Under President Obama the DOL took a hostile approach to American businesses and industry, issuing a number of costly and burdensome rules and regulations such as the Department’s Fiduciary Rule. Since taking office President Trump has vowed to undo Obama’s regulatory legacy by acting to roll back barriers to economic growth, such as his Executive Order addressing the DOL’s Fiduciary Rule.

“Mr. Acosta has committed to supporting President Trump’s goal of reining in agency overreach, and would be a force for good at the Department of Labor by serving the Department’s mission in a way that foster’s economic growth, instead of setting up regulatory roadblocks. 

“The Senate has previously confirmed Mr. Acosta on three occasions with bipartisan support – once for the National Labor Relations Board, once as an Assistant Attorney General, and also as U.S. Attorney for the Southern District of Florida – and the Senate should again do so. 

“I urge Senate lawmakers to vote in support of Alexander Acosta’s nomination to be Secretary of Labor, and look forward to working with Mr. Acosta to begin undoing the Obama regulatory regime and creating a regulatory climate that helps grow our economy." 

 

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Norquist: “Trump’s First 100 Days a Boon for U.S. Energy”

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Posted by Justin Sykes on Thursday, April 27th, 2017, 11:57 AM PERMALINK

Americans for Tax Reform President Grover Norquist this week issued the following statement praising actions taken by President Trump in his first 100 days to boost U.S. energy independence and growth.

“President Trump’s first 100 days in office have been a boon for US energy. The President has signed a historic number of Executive Orders to foster energy production and used the Congressional Review Act to reverse harmful Obama-era regulations that threatened to kill thousands of American jobs and reduce U.S. economic output.”  

While on the campaign trail then candidate Trump promised to repeal “needless job-killing regulation” and to put in place a requirement that “for every new federal regulation, two existing regulations must be eliminated.” Trump also promised that under his presidency he would accomplish “American energy independence” by undoing Obama-era energy policies and approving pro-growth projects such as the Keystone XL pipeline.

During his first 100 days in office President Trump has successfully delivered on his promises on energy development through his use of Executive Orders and by using the Congressional Review Act (CRA) to roll back Obama-era regulations.  Below is a list of actions President Trump has taken in his first 100 days that will boost U.S. energy independence and growth.

  1. Executive Order Reducing Regulation and Controlling Regulatory Costs. Signed shortly after taking office, Trump’s Executive Order on regulation took aim at peeling back costly federal regulations perpetuated under President Obama. Branded as a “one-in, two-out” regulatory approach, President Trump said that the only way new regulations would be issued is if “we…knock out two regulations for every new regulation.”
  2. Executive Order Enforcing Trump’s Regulatory Reform Agenda. Signed by President Trump in February, the Executive Order to enforce regulatory reform was issued to “alleviate unnecessary regulatory burdens” by ordering federal agency heads to designate a Regulatory Reform Office to oversee implementation of regulatory reform initiatives.
  3. Executive Order Requiring a Review of the “Waters of the U.S. Rule” (WOTUS). President Trump’s Executive Order on WOTUS requires the EPA and Army Corps of Engineers to review the rule and publish a proposed rule rescinding or revising WOTUS. WOTUS would have expanded to EPA’s jurisdiction to “anywhere water can conceivably flow” thus requiring new burdens on energy operations as well as farmers and private landowners.
  4. Executive Order Promoting Energy Independence and Economic Growth. Signed by President Trump in March, the Executive Order promoting energy independence and growth required that “executive departments and agencies immediately review existing regulations that potentially burden the development or use of domestically produced energy resource and…suspend, revise, or rescind those that unduly burden the development of domestic energy.”
  5. Executive Order Reviewing Designations under the Antiquities Act. Signed by President Trump in April, the Executive Order addressing the Antiquities Act focused on the importance of developing America’s natural resources and ordered a review of national monument designations. Under President Obama the Antiquities Act was used to restrict activities on public lands such as mining, pipelines, and commercial development.
  6. Executive Order Expanding Access to Fossil Fuels. On the 100th day of his presidency, Trump is expected to sign an Executive Order that would open up waters in the Atlantic and Artic Oceans to offshore drilling, areas that were previously made off limits by the Obama Administration.
  7. Approval of Keystone XL and Dakota Access Pipelines. In late March President Trump announced his administration had approved the Keystone XL pipeline and the Dakota Access pipeline, which reversed the Obama Administration’s decision to block the projects, both of which are projected to spur new economic growth and job creation.
  8. CRA Repeal of SEC Resource Extraction Rule (Sec. 1504 of Dodd-Frank). Issued as part of the Dodd-Frank Act, Sec. 1504 required the disclosure of proprietary information relating to resource extraction to the Securities and Exchange Commission (SEC). This rule put American energy firms at a severe competitive disadvantage internationally. President Trump in February signed off on the CRA repealing the Resource Extraction Rule.
  9. CRA Repeal of the Stream Protection Rule. Issued by the Department of Interior under Obama, the Stream Protection Rule was an egregious and unlawful example of federal regulatory overreach that infringed on the authority of state regulatory bodies and increased targeted burdens on energy production and distribution. President Trump successfully signed off on a CRA repealing this costly rule, in line with his promise to bring relief to America’s coal industry.
  10. CRA Repeal of BLM Management Planning 2.0. Under President Obama the Bureau of Land Management (BLM) issued a rule known as the BLM Management Planning Rule 2.0 that gave the federal government more authority over land use decisions by state and local governments. The CRA signed by President Trump repealing the rule will give state and local governments more control over decisions regarding land use.  

 

Photo credit: Gage Skidmore

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Norquist: Trump Plan Will Turbocharge the Economy

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Posted by ATR on Wednesday, April 26th, 2017, 3:17 PM PERMALINK

Today ATR President Grover Norquist issued the following statement in praise of President Trump’s tax reform announcement:

“President Trump has re-energized the drive for fundamental tax reform that creates growth and jobs. The plan cuts taxes for businesses and individuals and simplifies the code so Americans can file on a postcard. Reducing taxes on all businesses down to 15% will turbocharge the economy.

The Trump administration has made it clear that spending on infrastructure will be kept separate from tax reform. This will allow tax reform to lower tax rates, abolish the Death Tax, and move to a territorial tax system that will allow us to compete internationally.”

Photo Credit: Gage Skidmore


ATR Supports USA Act of 2017 to Stop Unauthorized Spending

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Posted by Natalie De Vincenzi on Wednesday, April 26th, 2017, 3:00 PM PERMALINK

Congresswoman Cathy McMorris Rodgers (R-Wash.) today introduced the Unauthorized Spending Account (USA) Act of 2017, legislation designed to restore Congressional authority over the power of the purse by ensuring all federal programs are properly authorized.

As it stands, unauthorized spending programs make up nearly 30 percent of the government’s discretionary budget. The USA Act will put a stop to this trend by subjecting all unauthorized programs to be subject to a sunset schedule. Additionally, this bill would establish a commission to conduct oversight and create the reauthorization schedule.

The USA Act would restore Congressional authority and ensure that Congress conducts oversight on programs that may no longer be necessary, but still come at a cost to taxpayers. ATR supports this important legislation and encourages all members of Congress to support and co-sponsor the USA Act. Please read the letter here or below.

April 26, 2017

The Honorable Cathy McMorris Rodgers
United States House of Representatives
1314 Longworth House Office Building
Washington, D.C. 20515

Dear Congresswoman McMorris Rodgers,

I write in support of the “Unauthorized Spending Accountability” (USA) Act, legislation that implements several reforms designed to restore Congressional authority over the power of the purse by ensuring all programs are properly authorized.

At present, unauthorized federal programs make up $310 billion, or nearly 30 percent of the government’s discretionary budget. This includes important programs at the State Department, the Department of Justice, and the Department of Veterans Affairs. For years, Congress has ceded its authority to fund these programs and they are rolled over each year with little scrutiny or oversight.

The USA Act fixes this problem by implementing several reforms.

First, this legislation subjects all existing unauthorized programs to a three-year sunset schedule. In year one, programs receive just 90 percent of funding and in years two and three, programs receive 85 percent before sun setting after year three. This gives lawmakers a chance to reauthorize important programs before they sunset.

Second, the USA Act establishes the “Spending Accountability Commission” (SAC), to establish authorization schedules for all discretionary programs, conduct rigorous oversight over discretionary spending, and suggest areas to cut. To ensure Congress does not resume bad habits, the commission is required to establish a three year reauthorization schedule for federal programs funded by discretionary spending.

For too long, Congress has shied away from exerting its power of the purse when it comes to many spending programs. By overhauling Congressional authority over the power of the purse, this legislation will ensure lawmakers exert appropriate scrutiny over hundreds of billions in unauthorized spending. ​

ATR supports this important legislation and encourages all members of Congress to support and co-sponsor the USA Act.

Onward,

Grover G. Norquist
President, Americans for Tax Reform

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Norquist Statement in Praise of Trump Tax Reform Announcement

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Posted by Americans for Tax Reform on Wednesday, April 26th, 2017, 12:31 PM PERMALINK

Today ATR President Grover Norquist issued the following statement in praise of President Trump’s tax reform announcement:

“President Trump has re-energized the drive for fundamental tax reform that creates growth and jobs. The plan cuts taxes for businesses and individuals and simplifies the code so Americans can file on a postcard. Reducing taxes on all businesses down to 15% will turbocharge the economy.

The Trump administration has made it clear that spending on infrastructure will be kept separate from tax reform. This will allow tax reform to lower tax rates, abolish the Death Tax, and move to a territorial tax system that will allow us to compete internationally.”


Senate Should Confirm Alexander Acosta as Secretary of Labor

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Posted by Justin Sykes on Tuesday, April 25th, 2017, 3:40 PM PERMALINK

This week the Senate will vote on the confirmation of President Trump’s nominee R. Alexander Acosta as Secretary of Labor. Mr. Acosta is a dedicated public servant who has spent his career handling complex legal issues and has a record of proven management and federal agency experience. Lawmakers in the upper chamber this week should vote to confirm Mr. Acosta as the next Secretary of the Department of Labor (DOL).

During President Obama’s tenure the DOL issued a number of burdensome rules that threatened the U.S. economy and the livelihoods of millions of Americans. Since taking office President Trump has worked to reverse the DOL’s heavy-handed approach under Obama by issuing a number of Executive Orders to give relief to the business community, as well as by nominating Mr. Acosta to lead DOL.

Mr. Acosta has committed to supporting Executive Orders put forth by President Trump, primarily Trump’s order directing the DOL to review the Fiduciary Rule.

During a recent confirmation hearing before the Senate Health, Education, Labor and Pensions Committee, Acosta stated in regard to the fiduciary rule, “There is an executive action that directs how the Department of Labor will approach this rule. If I am confirmed as secretary of labor, I believe and support my following executive orders of the president.”

Acosta’s commitment to carry out Trump’s Executive actions on the Fiduciary Rule would be a welcome relief for American’s saving for retirement. As a result of the Rule, 7 million IRA holders could be disqualified from receiving investment advice, and the number of IRA’s opened annually would be reduced by up to 400,000.

Thankfully Mr. Acosta could soon be in a position to stop the rush to implementation of the Fiduciary Rule, among other onerous DOL rules put forth under Obama.

The U.S. Senate has previously confirmed Mr. Acosta on three occasions with bipartisan support – once for the National Labor Relations Board, once as an Assistant Attorney General, and also as U.S. Attorney for the Southern District of Florida.

Lawmakers in the Senate this week should vote to confirm Mr. Acosta as the next Secretary of Labor. Acosta’s credentials show he not only has the necessary experience but the ability to lead the DOL in a way that serves the Department’s mission but does so in a way that foster’s economic growth, instead of deterring growth through regulatory hurdles and bureaucratic red tape. 

 

Photo Credit: Adam Polak

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Infrastructure Bill Provides Golden Opportunity for Ohio Legislature

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Posted by Marc Dupont on Tuesday, April 25th, 2017, 2:05 PM PERMALINK

 

Today, the Ohio House’s Committee on State and Local Government will hold a hearing on HB 121, legislation that would yield significant taxpayer savings by opening up competition for water infrastructure.

HB 121, if enacted, would save the state’s taxpayers millions of dollars per year by lifting local laws that restrict which piping materials can be used for water infrastructure projects. As is the case in other states, a number of cities and counties throughout Ohio dictate what materials can be used, which results in higher costs for taxpayers across the Buckeye state.

According to the American Chemistry Council, the average cost to replace water pipes in a “closed competition” jurisdiction is $51.83 per foot. In a city like Columbus that utilizes such a system, these costs can amount to almost $300,000 per mile. Compare that with nearby Delaware County, which does not impose such restrictions and has a competitive market for pipe materials. Their capital costs are a modest $33.33 per foot, which saves taxpayers a whopping $97,680 per mile when stacked up against cities like Columbus. It is estimated that by ensuring open competition across the country through the lifting of local restrictions, the cost savings could add up to more than $317 billion nationally.  

ATR sent the following letter to Ohio lawmakers urging them to support open competition and reduced costs by voting Yes on HB 121:

             Dear Representative,

On behalf of Americans for Tax Reform and our supporters across Ohio, I urge you to support House Bill 121, legislation that would enable Ohio to rebuild its aging water infrastructure while reducing costs to taxpayers through open competition.

Arcane laws and procurement codes in many localities across the country, including Ohio, restrict the piping materials that can be used in water infrastructure projects, without consideration for project specifics. These restrictions prohibit the use of other materials that are longer lasting, better performing, and less costly to taxpayers. Such restrictions on piping materials represent classic protectionism, and another example of public policy that picks industry winners and losers.

In this case, the big losers from local closed competition statutes for water infrastructure are taxpayers, who are forced to pay the heightened costs of lower-performing piping materials whose use is mandated. Enactment of HB 121 would fix this problem by opening competition to all piping materials, which would yield significant taxpayer savings.

Take Franklin County, which has a closed competition policy on water infrastructure, compared to Delaware County. Delaware County, unlike Franklin, allows for open competition. As a result, the average per mile cost of water infrastructure piping in open competition Delaware County is $97,680 less than closed competition Franklin County. Those are real taxpayer savings.

HB 121 is a free market, pro-taxpayer reform that deserves your support. ATR will be educating your constituents and all Ohio taxpayers as to how lawmakers in Columbus vote on HB 121, and other important fiscal and economic matters throughout the legislative session. Please look to ATR to as a resource on tax, budget, and other policy matters pending before you.

Sincerely,

Grover G. Norquist

President

Americans for Tax Reform

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IRS Data Breach Allows Hackers to Steal $30 Million from Taxpayers

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Posted by Elizabeth McKee on Tuesday, April 25th, 2017, 1:23 PM PERMALINK

IRS Commissioner Josh Koskinen testified before the Senate Finance Committee that a breach in the IRS Data Retrieval Tool (DRT) has allowed hackers to gain access to the personal information of 100,000 students, who use the tool to fill out the Free Application for Federal Student Aid (FAFSA). Identity thieves used this information to fill out fraudulent tax returns and steal an estimated $30 million from the U.S. government.

The tool works by importing students’ and families’ tax information - such as Adjusted Gross Income - directly from the IRS to their FAFSA application. The Data Retrieval Tool was popular among students, who used it to save time in applying for financial aid and student loans. It turns out that hackers were also fans of the online service; they could use fairly basic personal information to begin FAFSA applications in the guise of students. The DRT would then provide hackers with confidential tax information, which they could use to file fraudulent tax returns and steal money from American taxpayers.

Senator Orrin Hatch questioned Koskinen on why the IRS waited so long to take down the compromised Data Retrieval Tool. According to Koskinen, the IRS realized that the DRT may jeopardize taxpayer information, and therefore disabled the tool in order to address security concerns. However, most of the fraudulent tax returns in question were filed in January - months after the IRS realized the tool posed a security risk. Koskinen says he was alerted to the problem in September, but students continued to use the tool until it was taken down in March.

In 2015, as many as 17 million students had the option of using the Data Retrieval Tool to fill out their financial aid applications. This year, the IRS flagged 100,000 tax return applications that may have come from hackers who made of the DRT, although Koskinen says “that number may grow.” Of the 100,000 students whose information may have been stolen, the IRS has notified 35,000.

The exploitation of the Data Retrieval Tool is far from the only security breach that taxpayers need to worry about. Under Koskinen, the IRS has repeatedly failed to protect taxpayer information; in one breach in 2016, as many as 600,000 taxpayer accounts were jeopardized. The Government Accountability Office released a report accusing the agency of “significant deficiency” when it comes to protecting taxpayer data.

Koskinen, though, does not seem to be concerned about the IRS’s systematic failure to protect taxpayer information. “Fortunately, we were at the front end of this problem,” he testified. “We’ve been monitoring it. We have other areas we’re monitoring. We’re trying to anticipate where the criminals will attack next.”

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