In a win for consumers, Volcker Rules take effect – National Consumers League

By Sally Greenberg, NCL Executive Director
This week marked a milestone for the Dodd-Frank law: a new set of rules to prevent banks from taking huge risks with other people’s money. The new regulations come under the umbrella of the Volcker Rule, named after former Federal Reserve Chairman Paul Volcker.  The Volcker rule was just approved by five of the nation’s Government regulators and is a sweeping set of new rules for the nation’s biggest banks. Thankfully, the Volcker Rule bans financial institutions from the kind of ultra-high-risk trading that nearly collapsed the world’s financial system.

Despite a fierce lobbying effort to prevent the new measure, it won out. The Volcker Rule will prohibit banks from trading for their own profit rather than on behalf of customers. We are pleased that the rules came out stronger than anyone expected. Commentators believe that consumers won this round. “Big banks lost,” said Mark Williams, a former Fed bank examiner who now teaches at Boston University. “Wall Street aggressively fought the Volcker rule.”


The new rule will ban federally insured banks from betting on risky investments such as private equity and hedge funds. Private equity funds buy companies and turn them around before selling them, while hedge funds often employ complex trading strategies. These investments have proved highly profitable in the past, but are also extremely risky because they are often so complicated that most of the world, including experts in this stuff, often don’t understand how these investments work. That is by design.


The Volcker Rule also closes a critical loophole. “The Volcker rule will make it illegal for firms to use government-insured money to make speculative bets that threaten the entire financial system, and demand a new era of accountability from CEOs who must sign off on their firms’ practices,” President Obama said in a statement. The rule goes into effect in April but banks have until July 2015 to comply.


Also, financial firms may buy and sell securities as a way to hedge bets, but they also take a lot of risks in the process and when they fail, they can bring down others with them. For example, JPMorgan Chase & Co. suffered more than $6 billion in losses from positions by a trader who was known as the “London Whale” for his oversized hedges. JPMorgan Chase is the nation’s largest bank and this risky trading has huge repercussions in the financial industry.


Now the Volcker rule will require banks to continually monitor and adjust hedging strategies to ensure they don’t become overly risky bets that damage investors.


Another feature of the new rule is that institutions will have to document rationales for hedges.  Fed Gov. Daniel Tarullo, who heads the agency’s bank supervision and regulation committee, said the “Whale” episode provided “a real-world example of what should not happen in a banking organization.”


Banks will be required to keep records to back up their positions, and chief executives will be required to sign off on their firms’ compliance. They are also being asked under the new rule to structure employee compensation so that it does not “reward or incentivize” engaging in prohibited proprietary trading practices or expose the bank “to excessive or imprudent risk.”


Two Senators who pushed for the rule back in 2010, Jeff Merkley (D-Ore.) and Carl Levin (D-Mich.), said they were pleased that it was tougher than what regulators originally proposed.


Merkley, who is a great consumer and worker champion, joined Levin in a statement on the new regulation, saying the Volcker rule “was intended to change the culture and practices at our nation’s largest financial firms, to prevent Wall Street and the big banks from making swing-for-the-fences bets that put depositors and taxpayers at risk. The regulators have taken a serious step forward in mandating critical changes.”


This is an important victory for taxpayers and the public and a defeat for Wall Street.


For that we need to thank the heads of the five regulatory agencies who hung tough in the face of strong industry lobbying and opposition, including Comptroller of the Currency Thomas J. Curry, who said at a recent FDIC board meeting, “Issuing a final rule is only the beginning of the process. The OCC will be especially vigilant in developing a robust examination and enforcement program that ensures our largest institutions will remain compliant.” It’s about time.

National Consumers League statement on tech industry efforts to address government surveillance – National Consumers League

December 10, 2013

Contact: NCL Communications, Ben Klein, (202) 835-3323,

Washington, DC – The National Consumers League (NCL), the nation’s pioneering consumer and worker advocacy organization, today applauded the announcement by eight major technology industry companies of a coordinated effort to address the widespread collection of consumer data by the U.S. government.

In an open letter to Congress and the Obama Administration, the companies – AOL, Apple, Facebook, Google, LinkedIn, Microsoft, Twitter, and Yahoo — urged the federal government to abide by a set of principles limiting the massive collection of data about American citizens by federal intelligence agencies.

“Reforms addressing the mass surveillance of ordinary Americans is long overdue,” said NCL Executive Director Sally Greenberg. “Consumers expect that the corporations to which they entrust their data will not turn it over to the government without very specific goals and parameters tied closely to achieving specific national security goals.”

NCL supports legislation, like that introduced by Senators Jeff Merkley (D-OR), Mike Lee (R-UT) and Ron Wyden (D-OR), that would require the Department of Justice to unseal certain rulings by the Foreign Intelligence Surveillance Act (FISA) courts. This would do much to shine a spotlight on the workings of this court and start to restore consumers’ trust in the telecommunications and technology industry.

NCL appreciates that many companies have said no to demands for bulk data and commends these eight companies for asking for scrutiny over government intrusion into the private data of ordinary citizens.


About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit

Did you know another American falls victim to ID theft #every3seconds? – National Consumers League

By John Breyault, Vice President of Public Policy, Telecommunications and Fraud

NCL’s “State of ID Theft” Conference To Put National Spotlight on Continuing Problem

For thirteen years, the crime of identity theft has generated more complaints to the Federal Trade Commission than another other fraud. In 2012, more than 12 million Americans were affected by identity theft, costing the U.S. economy $20.9 billion. Every three seconds, a consumer’s identity is comprised by this pernicious crime.


Seven years ago, President George W. Bush, recognizing the seriousness of the threat of ID theft, created the federal Identity Theft Task Force. Made up of eighteen federal agencies, the task force was charged with implementing a range of recommendations to address the threat of ID theft. The task force made thirty-one recommendations, from reducing the use of Social Security Numbers by federal agencies, to improving coordination by law enforcement, to passing a national data breach notification standard, to name a few. The implementation of these recommendations by the federal government, as well as improved anti-fraud procedures in the private sector, have done much to make life harder on ID thieves.

Despite these advances, ID theft is still a major threat to consumers, business and the government. According to one conservative estimate, more than 1.1 billion records have been comprised by identity theft. Data breaches, which put information on millions of consumers in the hands of fraudsters, are still occurring at a rate of at least one per day.

Just as troubling, it appears that we may be on the cusp of a new wave of ID theft. With ever larger amounts of data being collected about consumers by government and the private sector, data breaches become more likely. Identity thieves are shifting towards scams that are harder to detect, such as tax-related ID theft and medical ID theft. And the criminal themselves — often located overseas — are becoming more professional and organized.

How will these new factors affect consumers’ vulnerability to identity theft? What can we learn from the last seven years of fighting this problem? What should consumers expect from regulators, law enforcement and the private sector as this crime evolves?

To examine these and other questions, the National Consumers League will be hosting our first State of ID Theft conference on December 12 in Washington, DC. The event will bring together some of the brightest minds in the country for panel discussion examining the continuing threat of ID theft and what can be done to better protect consumers. Headlining the conference will be a lunchtime conversation between FTC Chairwoman Edith Ramirez and Former Chairwoman Deborah Platt Majoras, who co-chaired the federal Identity Theft Task Force from 2006-08.

Registration is free but space is limited. Please RSVP here. For more information please contact John Breyault at


Statement on Nelson Mandela’s passing – National Consumers League

December 6, 2013

Contact: NCL Communications, Ben Klein, (202) 835-3323,

Washington, DC — The following statement can be attributed to NCL Executive Director Sally Greenberg:

The National Consumers League mourns the death of Nelson Mandela, one of the most transformational and inspirational leaders in the modern era. Mr. Mandela was willing to give his life to the cause of dismantling South Africa’s vicious and oppressive system of racial apartheid. He spent 27 years in prison before being released in 1990, going on to become President of South Africa. Mandela stood for dignity and respect for people the world over. Admirably, when he accepted the role of leader of his nation, he did so without turning to rancor or vengeance against his earlier tormentors. In so doing, he inspired his countrymen and women to put down their weapons, reject anger and recrimination, and strive for a peaceable and harmonious transition to democracy.

The National Consumers League’s 114 year commitment to championing the rights of consumers and the dignity of working people is very much in keeping with the causes to which Nelson Mandela was devoted.   In the pantheon of great leaders throughout human history, Mandela surely stands at the top. We salute his life and mourn his passing.


About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit

Drinking raw milk is a raw deal – National Consumers League

kelsey By Kelsey Albright, Linda Golodner Food Safety & Nutrition Fellow

Over the past decade, food movements centered around eating local foods, “locavore”, organic, and ethically produced foods have sky rocketed. Being that many of these forms of producing and labeling food are the start of a new frontier, plenty of laws and regulations have been put in place to ensure that consumers are not misinformed about their food.  As part of this movement, many Americans have turned to drinking raw milk. Surprisingly little is known about raw milk, and current regulations are lax to say the least.

More and more frequently consumers, especially children and others with weaker immune systems, are getting sick thanks to bacteria like Salmonella, E. coli and Listeria that can easily live and grow in unpasteurized milk.  Maddie Powell is just one example of a child gravely sickened by E. coli found in raw milk.  She developed hemolytic uremic syndrome (HUS ) and was hospitalized for weeks at great cost to her family. So why do people keep drinking raw milk if it’s so potentially dangerous?  Overwhelmingly, people are misinformed about how risky it is and assume that it must be more nutritious because it’s less processed. 

No scientific evidence supports raw milk having more nutrients.  The CDC estimates that between 1993 and 2006, 1500 people have fallen ill from drinking raw milk and consumers are 150 times more likely to contract a food borne illness from raw milk than pasteurized dairy products.  Pregnant women should be especially careful because even if they don’t feel sick, bacteria in raw milk can cause miscarriage, fetal death or illness, and even death among newborns. In this day and age of high fat, sugar, and salt, it can be tempting to search for foods that are the least processed.  Fortunately there are alternatives to raw milk.  Light pasteurization or “low-temperature vat pasteurization” heats smaller amounts of milk to a temperature cooler than is typical with regular pasteurization for a longer amount of time.  Also buying milks that aren’t homogenized, meaning the fat hasn’t been broken up so it remains suspended in the milk, is a viable option for those who might think raw milk is simply tastier.  Please, for your own sake, don’t drink raw milk.

Consumers League applauds DC Council vote – National Consumers League

December 3, 2013

Contact: NCL Communications, Ben Klein, (202) 835-3323,

Washington, DC–The National Consumers League (NCL) today applauded the DC City Council for votes that would boost workers’ pay and expand their paid sick days.

“These are great first steps, very welcome, and long overdue,” said Sally Greenberg, NCL Executive Director.

The two measures approved would expand the city’s 2008 law on paid sick leave to include workers whose incomes rely on tips and increase the minimum wage in the District for all other workers from $8.25 to $11.50 per hour over a three-year period.

“Consumers have spoken very clearly in overwhelming support of tipped workers who serve them at dining establishments, for improving their wages and providing them with paid sick leave,” Greenberg said. “It’s not just a matter of compassion; it’s a matter of public health and food safety.”  

“If the proposals are ultimately adopted, thousands of tipped workers will have the freedom to stay home to recover when they are sick, instead of coming to work and potentially infecting coworkers and customers,” said Greenberg. “This is especially critical now that cold and flu season is upon us.”

According to the DC Fiscal Policy Institute, the gap between high-income and low-income households in the District is the third-highest among the 50 largest cities, after Atlanta and Boston. The $3.25 increase in the minimum wage will help some 51,000 workers who now struggle to make ends meet and help to lift them out of poverty.

The typical minimum-wage worker is 34 years old, supports a family, and works full time. The new wage floor would mean a full-time salary of $23,920 a year, which will lift a family of three to just above the poverty level. “This is still not enough money to cover basic expenses, but it is a vast improvement of the current minimum wage,” said Michell McIntyre, NCL’s Outreach Director, Labor & Worker Rights.

Although the new minimum wage bill does not raise the tipped minimum wage (currently $2.77 an hour), Councilmember Mary Cheh introduced a measure that would make the tipped minimum wage the same as the standard minimum wage.

“We look forward to seeing both bills signed into law and working with Councilmember Cheh on a tipped minimum wage bill,” said Greenberg.


About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit

Help support NCL’s mission #GivingTuesday – National Consumers League

For the first time this year NCL will participate in Giving Tuesday, a national day of giving to help kick off the holiday season. Following Black Friday and Cyber Monday, more than 8,300 non-profits will aim to grab a piece of the post-Thanksgiving spending flurry. Consumers spent more than $12 billion on Black Friday, the biggest spending day of the year.

Billions more were spent on Thanksgiving and will be spent on Cyber Monday. This year, direct your charitable giving to the National Consumers League. Just a small donation can help:

Donate today, help support NCL’s 114-year legacy protecting America’s consumers and workers!