The Jubilee Blog

7th Anniversary of Dodd-Frank

By Nomin Angarag

President Barack Obama signed the Dodd–Frank Wall Street Reform and Consumer Protection Act into federal law seven years ago today. Dodd-Frank was a widespread reform created in direct response to the 2008 market crash. It promotes financial stability, improves accountability and transparency, and prevents future crises from happening again. Among other things, Jubilee USA worked on the initial passage of the Cardin-Lugar amendment, or Section 1504 of Dodd-Frank, which requires oil and mining companies to disclose financial activity and payments to governments in the countries where they operate.

Jubilee USA believes Section 1504 is not only an important anti-corruption tool, but also an important anti-poverty tool. Developing countries lose more than $1 trillion a year due to corruption and tax evasion. Countries with substantial natural resources are particularly vulnerable to corrupt practices given the high demand for those resources. Bribes and other illicit transactions, including outright theft, by leaders of resource-rich countries perpetuate poverty, fuel conflict and threaten our national security.

Since Dodd-Frank was signed into federal law, it has received a number of attacks, including a congressional vote that voided the SEC rule implementing Section 1504 and more recently through the Financial Choice Act, which passed the House. Congress voided the SEC rule using the Congressional Review Act, which lets Congress strike down regulatory measures using expedited procedures. Just this past June, the House passed the Financial Choice Act. This legislation weakens the regulatory power of the Consumer Financial Protection Bureau (CFPB) over big banks and payday lending and if passed in the Senate, would undo much of Dodd-Frank, including repeal of Section 1504.  

While we celebrate the hard-won fight for transparency seven years ago today, we also realize that fight continues to defend these victories and ensure they stay in place.

You can email your Senators to tell them you oppose the Repeal of Section 1504 that passed the House of Representatives. Please take action to make sure repeal does not pass the Senate.

#DoddFrankAnniversary
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Consumer Bank and Credit Card Rule Under Threat

 By Abby Wilhelm

On Thursday, Members of Congress took aim at a new banking and lending rule from the Consumer Financial Protection Bureau. Senators and Representatives introduced companion measures to repeal the bureau's rule that makes it easier for consumers to take joint legal action against banks and lending companies.

‎"Congress should not repeal rules that make banks and lenders more transparent and accountable,"said Eric LeCompte, Executive Director of the religious debt watchdog group, Jubilee USA. "We cannot forget that it was a lack of accountability and transparency in the financial sector that helped create a global financial crisis."

Congress could vote to repeal the consumer rule as early as Tuesday.‎ Senators and Representatives are using the Congressional Review Act (CRA) to eliminate the regulation. Congress has used the CRA 14 times since the beginning of the year. 

 

"Unfortunately, Congress took similar actions earlier this year that weakened our protections against financial crises and voided transparency rules that protect poor countries," said LeCompte.

 

 

 

Mozambique Audit Reveals Corruption and Short Falls in Financial System; Trump and G20 Leaders Review New Guidelines to Prevent Debt Crisis on Friday

By Abby Wilhelm

Ahead of President Trump's first G20 meeting in Germany this weekend, Mozambique released an audit exposing violations of the country's laws to secure now-defaulted loans. Nearly $2 billion in loans were secured by the government of Mozambique but hidden from the public and Parliament. Last week, Business Insider reviewed CIA data and ranked Mozambique as one of the most indebted countries in the world. The United Nations Development Programme ‎lists Mozambique as one of the least developed countries in the world at 181 out of 188 countries. 

“We know that the financial crisis in Mozambique was caused by corruption at the national and international level,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA. “It seems a group of Mozambique's leaders and creditors conspired to steal from some of the world's poorest people.”

The financial scandal and debt crisis facing Mozambique will be discussed in Hamburg by G20 leaders in the context of new responsible lending and borrowing guidelines during their annual two day meeting. Finance Ministers for the Group of 20 supported these "Operational Guidelines for Sustainable Financing" at their March meeting in Baden-Baden, Germany.

“The G20 is calling on its member countries to pass stronger laws to stop corruption and enforce responsible lending and borrowing,” said LeCompte who serves on United Nation debt expert groups. “While the new G20 guidelines fall short on determining whether or not a country's debt is sustainable, the guidelines are progress in protecting vulnerable people from economic crisis."

The Operational Guidelines for Sustainable Financing are available here. 

The Executive Summary of the audit of Mozambique is available here. 

 

European Union Votes on Corporate Transparency Regulations; US Anti-corruption ‎Rules Under Attack

By Abby Wilhelm

The European Parliament is set to vote on landmark corporate transparency rules known as "country-by-country" reporting. Under the new law all major multinational corporations, including US businesses that work in Europe, will publicly disclose taxes and other payments made to governments in countries where they operate. The European Union (EU) Parliament likely will vote in favor of the regulations before Wednesday and then the EU Council will make the final decision. ‎

“This is exciting news. Europe is moving forward the most comprehensive rules to date to stop bribery and encourage corporations to pay taxes where they operate,” noted Eric LeCompte, Executive Director of the religious development group Jubilee USA. LeCompte served on United Nations expert groups that focused on these new rules. “Unfortunately as we are making progress in Europe less comprehensive transparency regulations are threatened with repeal in the United States.”

‎As new transparency regulations in Europe move forward, similar US provisions are under attack. Section 1504 of the US Dodd-Frank Act requires oil, gas and mining industries to perform similar US reporting to the European measure. Congress slowed the US provision from moving forward earlier this year and then the US House of Representatives voted to repeal Section 1504 entirely. ‎Jubilee USA leads a campaign to prevent the Senate from repealing the transparency measure.

“Corporate transparency rules are vital for combatting corruption and ensuring that our economy protects vulnerable communities,” said LeCompte.

The EU legislation includes an exemption for corporations to not disclose information if the disclosure would threaten commercial interests.