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Wow if anything this is quite worse than the article says. You can read Equifax's original letter in all of its Orwellian double-speak: https://www.regulations

by Top19 9y ago

Wow if anything this is quite worse than the article says. You can read Equifax's original letter in all of its Orwellian double-speak: https://www.regulations.gov/contentStreamer?documentId=CFPB-2016-0020-3961&attachmentNumber=1&contentType=pdf https://www.regulations.gov/contentStreamer?documentId=CFPB-... It's absolutely shocking to me how many times they use the words "serve the public interest". The sell-out that wrote that letter btw is this guy: https://www.cov.com/en/professionals/s/david-stein https://www.cov.com/en/professionals/s/david-stein

Top19 9y ago
oh man even worse this guy used to work in regulation for the government as part of the Consumer Financial Protection Bureau. Such a clear case of "regulatory capture", or the process where former employees of regulatory agencies leave to go reveal all their thinking and decision making tactics to the highest bidder.
- amluto 9y ago
  That's not really what regulatory capture means...
  - Top19 9y ago
    Would you say it's part of the process though?
    - LeifCarrotson 9y ago
      No,the problem is not that they reveal anything about what they were thinking. That's pretty much public knowledge, and doesn't need protection. It's that they modify their thinking and their actions while in the regulatory agency in ways that benefit the business interests, in exchange for a cushy job after their time in office. Or the reverse, that they originate from the businesses and go to the agency to implement the business policies.
  - c3534l 9y ago
    Regulatory capture is when regulators later join the people they were regulating This compromises their ability to regulate because they anticipate working that industry later. David Stein used to regulate the financial industry. Now he works in it. That's exactly what regulatory capture is.
    - acjohnson55 9y ago
      I'd say that that's a mechanism of regulatory capture, but not the phenomenon, itself. As Wikipedia puts it: "Regulatory capture is a form of government failure that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or political concerns of special interest groups that dominate the industry or sector it is charged with regulating." There are many ways this happens without a revolving door.
      - jacquesm 9y ago
        IE, the EPA at the moment.
      - vermontdevil 9y ago
        Yep look at hairdressing, taxi, funeral homes industries for examples.
        jnbiche 9y ago
        And banking, for another example.
    - tacomonstrous 9y ago
      What you've described is the revolving door, which is logically disjoint from regulatory capture.
- ethan_g 9y ago
  To be clear, regulatory capture is when the regulator advances the interests of the industry rather than of the public. Revolving door is a separate issue. There's an interesting argument that the revolving door actually prevents regulatory capture through encouraging regulators to be more strict. The idea is that the more onerous the regulations, the more desireable it is for corporations to hire former regulators who know the system. "Keep your friends close, and your enemies closer." Matt Levine's take on it: https://www.bloomberg.com/view/articles/2014-06-26/strict-regulation-makes-the-revolving-door-spin-faster https://www.bloomberg.com/view/articles/2014-06-26/strict-re...
  - willvarfar 9y ago
    The problem with civil servants taking high paid jobs when they leave is that it can be a payoff for being biased for the company. If companies can dangle the carrot of an eventual job the civil servant will avoid actions that sink their chances. There's a lot of stuff on real revolving doors in the UK in the magazine Private Eye. Stomach turning really.
    - anigbrowl 9y ago
      Nobody is arguing in favor of the revolving door, they're just pointing out how it differs from regulatory capture. Don't argue for the sake of argument.
  - michaelt 9y ago
    The revolving door doesn't require regulators to be more strict. All it needs is for companies to give big rewards (six figure salary for a day a month of work) to regulators who have previously done things the companies like. Then their replacements will know strengthening regulations is against their personal interests. You don't hire an ex-regulator for their expertise, you hire them as payment for services already rendered.
  - joe_the_user 9y ago
    There's an interesting argument that the revolving door actually prevents regulatory capture through encouraging regulators to be more strict. So "interesting" now means is "deceptive and ingenuous". In a hypothetical world where corporations were akin to mom-and-pop bakeries that would need to hire power, sophisticated regulators to guide them through a very tough state, that argument might be plausible. In the real world where corporations are powerful, forward-looking institutions who know full well that paying people involves a process of rewarding behavior, this argument says more about the person advancing it than anything else. And sure, a lot of smart people might claim this, just as similar stable of smart people operate in the stable of the corporations writing arguments for newspapers and magazine. But maybe all those people aren't at all tainted in their views. I'm sure they could come up with hypothetical situations where they aren't.
- smsm42 9y ago
  > former employees of regulatory agencies leave to go reveal all their thinking and decision making tactics to the highest bidder. This implying thinking and decision making tactics of regulators should be some kind of closely guarded secret? These people are essentially writing the laws that rule our economy, I'd think if anything should be public that's their thinking and decision making tactics.
  - ethan_g 9y ago
    Unfortunately, regulations are complicated, vague, and enforced unequally. And yes, sometimes they're even secret, because of fear that if their exact model is publicized, the banks will just optimize around it. "Security through obscurity", essentially. http://www.marketwatch.com/story/fed-says-stress-test-models-will-stay-a-secret-2015-06-25 http://www.marketwatch.com/story/fed-says-stress-test-models...
    - smsm42 9y ago
      > Unfortunately, regulations are complicated, vague, and enforced unequally. All true, they are. But how implying helping somebody to navigate this mess is somehow bad thing? The bad thing is complicated, vague and capriciously enforces law, not people trying to deal with it. > And yes, sometimes they're even secret, because of fear that if their exact model is publicized, the banks will just optimize around it This is the opposite of how the law should work. It's like the argument of making the laws and the courts secret because otherwise criminals would know the law and would learn how to avoid being prosecuted, and would also be able to hire lawyers for the same purpose. Yes, they are, and that's how a normal country works. The opposite is how a totalitarian police state works. Sure, it's probably harder to get away with a financial crime in North Korea - but it's also impossible to live a normal life and enjoy freedoms we all have. I'd rather let some crooks slip through now and then than turn the country into North Korea.
maxxxxx 9y ago
Fun fact: Obama's attorney general, Eric Holder, works at the same firm. These guys are the embodiment of the revolving door.
- ohthehugemanate 9y ago
  Well here's your chance to agree with Donald trump: he made everyone sign an ethics pledge that they would not lobby within 5 years of their tenure in government. https://www.whitehouse.gov/the-press-office/2017/01/28/executive-order-ethics-commitments-executive-branch-appointees https://www.whitehouse.gov/the-press-office/2017/01/28/execu... getting Congress to pass a law that puts some teeth behind the promise is another question.
  - Pxtl 9y ago
    Even without lobbying, large corps can still use sweetheart positions in the private sector as a "reward" for friendly legislators who retire. Obviously targeting lobbying is an improvement, but it's not enough. And also, I'm wondering how that impacts a not-for-profit that a politician decides to champion after retirement... Is that "lobbying"?
  - maxxxxx 9y ago
    From what I have read he is stacking agencies with lobbyists from industries they are supposed to regulate. So no, there is no reason to agree with him.
  - rgbrenner 9y ago
    saying "everyone" isn't correct, because trump will give you a waiver if he wants you in his cabinet: https://www.washingtonpost.com/news/post-politics/wp/2017/05/31/white-house-grants-ethics-waivers-to-17-appointees-including-four-former-lobbyists/ https://www.washingtonpost.com/news/post-politics/wp/2017/05...
  - fencepost 9y ago
    > here's your chance to agree with Donald trump: he made everyone sign an ethics pledge that they would not lobby This seems like a case of "Do as I say, not as I do." Ignoring the question of what percentage of senior people have left due to being fired, the potential for legal cases against them, inability to personally pay for anticipated legal expenses, or some combination thereof, there's also the fact that it's still early in the Trump administration. The bigger factor is likely the massive number of (former?) lobbyists being hired into positions of influence. In fact, it seems that the lobbying ban you pointed to also removed a lot of restrictions that had been in place [1], and that there's been both noticeable granting of waivers and significant resistance to releasing information on those waivers [2]. [1] http://www.politico.com/story/2017/01/trump-lobbying-ban-weakens-obama-ethics-rules-234318 http://www.politico.com/story/2017/01/trump-lobbying-ban-wea... [2] https://www.nytimes.com/2017/06/07/us/politics/lobbyists-ethics-waivers-trump-administration.html https://www.nytimes.com/2017/06/07/us/politics/lobbyists-eth...
sillysaurus3 9y ago
The sell-out that wrote that letter btw is this guy: I don't think it's a good idea to post someone's personal information in such a flippant way. He's not a public official and the whole point here is to witch hunt him. It comes up with his name, phone number and email address.
- yardie 9y ago
  He's a lobbyist. Every interaction he has with the government is a matter of public record. If he felt he didn't want that information public then he shouldn't be a lobbyist.
  - sillysaurus3 9y ago
    Posting the document is fine. Posting a link to his contact page while calling him a sellout is probably overstepping. The sole reason for posting the second link is to say "Look at this person. Isn't he horrible? Here's his name, phone number and email address." HN is almost a top-500 website by traffic. A lot of people come here. How likely is it that people here will start harassing him just because it's easy? His info is right there.
    - jweir 9y ago
      If posting the document is fine - which you didn't read - then posting a link to his corporate bio is fine. It is in the effing document. It is already public record.
      - sillysaurus3 9y ago
        I'm well aware. There's a major distinction between someone's info being in a document vs linking to his info with "This guy is a sellout:" This post is currently #1 on HN. The comment is the top comment. That means all of HN's traffic that reads comments is going to that person's contact info. If you don't agree, just downvote and move on. Personal swipes are unnecessary.
samstave 9y ago
>>>David Stein advises clients on retail financial services, credit reporting, financial privacy, payments, fair lending, and technology and e-commerce issues. He assists banks, non-bank lenders, consumer reporting agencies, payments and technology companies, and their vendors with regulatory, compliance, supervision, enforcement, and transactional matters. Notice hw he in no manner of speak "assists" any of the consumers/users of said services? This guy is a shill POS.
deleted 9y ago
[deleted]
smsm42 9y ago
Why you call him a "sell-out"? He seems to be professional consultant. His main argument seems to be that CFPB does not have legal right to enforce the regulations he is talking about. That may be true or false - I have no idea, for that one needs to be a lawyer specializing in regulation law and parse the documents establishing CFPB and all accompanying regulations and caselaw. Which is way beyond my abilities, and I suspect, most of people here. But how it is "Orwellian"? He also raises a very correct argument that considering only benefits of successful class action and not the costs of the litigation and the fallout for both consumers and credit industry is just wrong. I mean, if you win $10 from successful lawsuit but would be forced to pay $20 more next time you need a credit check (numbers are just an invented example, of course), then this setup won't be worth it for you. Again, his point may be wrong - maybe benefits of class actions are much larger than the costs - but this point is certainly in no way is "Orwellian". And if he is right, avoiding such regulation would definitely be in the public interest, in a very direct sense of the term. We have tons of regulations which serve as nothing more than a feeding ground for unsavory opportunistic plaintiff lawyers, with no benefit for purported victims (which get peanuts while lawyers are getting millions, and often the lawyers just buy plaintiffs for minuscule sums in order to mass-file lawsuits) and huge costs for everybody else. Last thing we need is more of these.
- joe_the_user 9y ago
  He also raises a very correct argument that considering only benefits of successful class action and not the costs of the litigation and the fallout for both consumers and credit industry is just wrong. I mean, if you win $10 from successful lawsuit but would be forced to pay $20 more next time you need a credit check (numbers are just an invented example, of course), then this setup won't be worth it for you. This argument confuses a payoff to plaintiffs with costs to the credit bureau's customers - but the plaintiffs would not be the customers of the credit bureau but everyone monitored (involutarily!) by the credit bureau. Just as much, the purpose of the state allowing a lawsuit would not be to give money to the plaintiffs but rather to give the credit bureau a disincentive for doing what they did - manage their subjects' (now victims) data poorly. Which is to repeat what other have noted - the average American isn't the credit bureau's customer, they are the credit bureau's product (the customers are employers and landlords). If having a secure credit-check system costs more, let the credit bureau's actual customers pay more. And sure, landlords sometimes pass credit-check costs on to tenants but that's just one more part of the whole abusive system that it would be nice to see reigned-in (though naturally I'm not optimistic).
VeronicaJJ123 9y ago
Is using words like "sell-out" for a professional doing his job consistent with HN policies? This is a genuine question and not a rhetorical one.

by Top19 9y ago

Top19 9y ago

oh man even worse this guy used to work in regulation for the government as part of the Consumer Financial Protection Bureau. Such a clear case of "regulatory capture", or the process where former employees of regulatory agencies leave to go reveal all their thinking and decision making tactics to the highest bidder.

amluto 9y ago
That's not really what regulatory capture means...
- Top19 9y ago
  Would you say it's part of the process though?
  - LeifCarrotson 9y ago
    No,the problem is not that they reveal anything about what they were thinking. That's pretty much public knowledge, and doesn't need protection. It's that they modify their thinking and their actions while in the regulatory agency in ways that benefit the business interests, in exchange for a cushy job after their time in office. Or the reverse, that they originate from the businesses and go to the agency to implement the business policies.
- c3534l 9y ago
  Regulatory capture is when regulators later join the people they were regulating This compromises their ability to regulate because they anticipate working that industry later. David Stein used to regulate the financial industry. Now he works in it. That's exactly what regulatory capture is.
  - acjohnson55 9y ago
    I'd say that that's a mechanism of regulatory capture, but not the phenomenon, itself. As Wikipedia puts it: "Regulatory capture is a form of government failure that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or political concerns of special interest groups that dominate the industry or sector it is charged with regulating." There are many ways this happens without a revolving door.
    - jacquesm 9y ago
      IE, the EPA at the moment.
    - vermontdevil 9y ago
      Yep look at hairdressing, taxi, funeral homes industries for examples.
      - jnbiche 9y ago
        And banking, for another example.
  - tacomonstrous 9y ago
    What you've described is the revolving door, which is logically disjoint from regulatory capture.
ethan_g 9y ago
To be clear, regulatory capture is when the regulator advances the interests of the industry rather than of the public. Revolving door is a separate issue. There's an interesting argument that the revolving door actually prevents regulatory capture through encouraging regulators to be more strict. The idea is that the more onerous the regulations, the more desireable it is for corporations to hire former regulators who know the system. "Keep your friends close, and your enemies closer." Matt Levine's take on it: https://www.bloomberg.com/view/articles/2014-06-26/strict-regulation-makes-the-revolving-door-spin-faster https://www.bloomberg.com/view/articles/2014-06-26/strict-re...
- willvarfar 9y ago
  The problem with civil servants taking high paid jobs when they leave is that it can be a payoff for being biased for the company. If companies can dangle the carrot of an eventual job the civil servant will avoid actions that sink their chances. There's a lot of stuff on real revolving doors in the UK in the magazine Private Eye. Stomach turning really.
  - anigbrowl 9y ago
    Nobody is arguing in favor of the revolving door, they're just pointing out how it differs from regulatory capture. Don't argue for the sake of argument.
- michaelt 9y ago
  The revolving door doesn't require regulators to be more strict. All it needs is for companies to give big rewards (six figure salary for a day a month of work) to regulators who have previously done things the companies like. Then their replacements will know strengthening regulations is against their personal interests. You don't hire an ex-regulator for their expertise, you hire them as payment for services already rendered.
- joe_the_user 9y ago
  There's an interesting argument that the revolving door actually prevents regulatory capture through encouraging regulators to be more strict. So "interesting" now means is "deceptive and ingenuous". In a hypothetical world where corporations were akin to mom-and-pop bakeries that would need to hire power, sophisticated regulators to guide them through a very tough state, that argument might be plausible. In the real world where corporations are powerful, forward-looking institutions who know full well that paying people involves a process of rewarding behavior, this argument says more about the person advancing it than anything else. And sure, a lot of smart people might claim this, just as similar stable of smart people operate in the stable of the corporations writing arguments for newspapers and magazine. But maybe all those people aren't at all tainted in their views. I'm sure they could come up with hypothetical situations where they aren't.
smsm42 9y ago
> former employees of regulatory agencies leave to go reveal all their thinking and decision making tactics to the highest bidder. This implying thinking and decision making tactics of regulators should be some kind of closely guarded secret? These people are essentially writing the laws that rule our economy, I'd think if anything should be public that's their thinking and decision making tactics.
- ethan_g 9y ago
  Unfortunately, regulations are complicated, vague, and enforced unequally. And yes, sometimes they're even secret, because of fear that if their exact model is publicized, the banks will just optimize around it. "Security through obscurity", essentially. http://www.marketwatch.com/story/fed-says-stress-test-models-will-stay-a-secret-2015-06-25 http://www.marketwatch.com/story/fed-says-stress-test-models...
  - smsm42 9y ago
    > Unfortunately, regulations are complicated, vague, and enforced unequally. All true, they are. But how implying helping somebody to navigate this mess is somehow bad thing? The bad thing is complicated, vague and capriciously enforces law, not people trying to deal with it. > And yes, sometimes they're even secret, because of fear that if their exact model is publicized, the banks will just optimize around it This is the opposite of how the law should work. It's like the argument of making the laws and the courts secret because otherwise criminals would know the law and would learn how to avoid being prosecuted, and would also be able to hire lawyers for the same purpose. Yes, they are, and that's how a normal country works. The opposite is how a totalitarian police state works. Sure, it's probably harder to get away with a financial crime in North Korea - but it's also impossible to live a normal life and enjoy freedoms we all have. I'd rather let some crooks slip through now and then than turn the country into North Korea.

maxxxxx 9y ago

Fun fact: Obama's attorney general, Eric Holder, works at the same firm. These guys are the embodiment of the revolving door.

ohthehugemanate 9y ago
Well here's your chance to agree with Donald trump: he made everyone sign an ethics pledge that they would not lobby within 5 years of their tenure in government. https://www.whitehouse.gov/the-press-office/2017/01/28/executive-order-ethics-commitments-executive-branch-appointees https://www.whitehouse.gov/the-press-office/2017/01/28/execu... getting Congress to pass a law that puts some teeth behind the promise is another question.
- Pxtl 9y ago
  Even without lobbying, large corps can still use sweetheart positions in the private sector as a "reward" for friendly legislators who retire. Obviously targeting lobbying is an improvement, but it's not enough. And also, I'm wondering how that impacts a not-for-profit that a politician decides to champion after retirement... Is that "lobbying"?
- maxxxxx 9y ago
  From what I have read he is stacking agencies with lobbyists from industries they are supposed to regulate. So no, there is no reason to agree with him.
- rgbrenner 9y ago
  saying "everyone" isn't correct, because trump will give you a waiver if he wants you in his cabinet: https://www.washingtonpost.com/news/post-politics/wp/2017/05/31/white-house-grants-ethics-waivers-to-17-appointees-including-four-former-lobbyists/ https://www.washingtonpost.com/news/post-politics/wp/2017/05...
- fencepost 9y ago
  > here's your chance to agree with Donald trump: he made everyone sign an ethics pledge that they would not lobby This seems like a case of "Do as I say, not as I do." Ignoring the question of what percentage of senior people have left due to being fired, the potential for legal cases against them, inability to personally pay for anticipated legal expenses, or some combination thereof, there's also the fact that it's still early in the Trump administration. The bigger factor is likely the massive number of (former?) lobbyists being hired into positions of influence. In fact, it seems that the lobbying ban you pointed to also removed a lot of restrictions that had been in place [1], and that there's been both noticeable granting of waivers and significant resistance to releasing information on those waivers [2]. [1] http://www.politico.com/story/2017/01/trump-lobbying-ban-weakens-obama-ethics-rules-234318 http://www.politico.com/story/2017/01/trump-lobbying-ban-wea... [2] https://www.nytimes.com/2017/06/07/us/politics/lobbyists-ethics-waivers-trump-administration.html https://www.nytimes.com/2017/06/07/us/politics/lobbyists-eth...

sillysaurus3 9y ago

The sell-out that wrote that letter btw is this guy: I don't think it's a good idea to post someone's personal information in such a flippant way. He's not a public official and the whole point here is to witch hunt him. It comes up with his name, phone number and email address.

yardie 9y ago
He's a lobbyist. Every interaction he has with the government is a matter of public record. If he felt he didn't want that information public then he shouldn't be a lobbyist.
- sillysaurus3 9y ago
  Posting the document is fine. Posting a link to his contact page while calling him a sellout is probably overstepping. The sole reason for posting the second link is to say "Look at this person. Isn't he horrible? Here's his name, phone number and email address." HN is almost a top-500 website by traffic. A lot of people come here. How likely is it that people here will start harassing him just because it's easy? His info is right there.
  - jweir 9y ago
    If posting the document is fine - which you didn't read - then posting a link to his corporate bio is fine. It is in the effing document. It is already public record.
    - sillysaurus3 9y ago
      I'm well aware. There's a major distinction between someone's info being in a document vs linking to his info with "This guy is a sellout:" This post is currently #1 on HN. The comment is the top comment. That means all of HN's traffic that reads comments is going to that person's contact info. If you don't agree, just downvote and move on. Personal swipes are unnecessary.

samstave 9y ago

>>>David Stein advises clients on retail financial services, credit reporting, financial privacy, payments, fair lending, and technology and e-commerce issues. He assists banks, non-bank lenders, consumer reporting agencies, payments and technology companies, and their vendors with regulatory, compliance, supervision, enforcement, and transactional matters. Notice hw he in no manner of speak "assists" any of the consumers/users of said services? This guy is a shill POS.

deleted 9y ago

[deleted]

smsm42 9y ago

Why you call him a "sell-out"? He seems to be professional consultant. His main argument seems to be that CFPB does not have legal right to enforce the regulations he is talking about. That may be true or false - I have no idea, for that one needs to be a lawyer specializing in regulation law and parse the documents establishing CFPB and all accompanying regulations and caselaw. Which is way beyond my abilities, and I suspect, most of people here. But how it is "Orwellian"? He also raises a very correct argument that considering only benefits of successful class action and not the costs of the litigation and the fallout for both consumers and credit industry is just wrong. I mean, if you win $10 from successful lawsuit but would be forced to pay $20 more next time you need a credit check (numbers are just an invented example, of course), then this setup won't be worth it for you. Again, his point may be wrong - maybe benefits of class actions are much larger than the costs - but this point is certainly in no way is "Orwellian". And if he is right, avoiding such regulation would definitely be in the public interest, in a very direct sense of the term. We have tons of regulations which serve as nothing more than a feeding ground for unsavory opportunistic plaintiff lawyers, with no benefit for purported victims (which get peanuts while lawyers are getting millions, and often the lawyers just buy plaintiffs for minuscule sums in order to mass-file lawsuits) and huge costs for everybody else. Last thing we need is more of these.

joe_the_user 9y ago
He also raises a very correct argument that considering only benefits of successful class action and not the costs of the litigation and the fallout for both consumers and credit industry is just wrong. I mean, if you win $10 from successful lawsuit but would be forced to pay $20 more next time you need a credit check (numbers are just an invented example, of course), then this setup won't be worth it for you. This argument confuses a payoff to plaintiffs with costs to the credit bureau's customers - but the plaintiffs would not be the customers of the credit bureau but everyone monitored (involutarily!) by the credit bureau. Just as much, the purpose of the state allowing a lawsuit would not be to give money to the plaintiffs but rather to give the credit bureau a disincentive for doing what they did - manage their subjects' (now victims) data poorly. Which is to repeat what other have noted - the average American isn't the credit bureau's customer, they are the credit bureau's product (the customers are employers and landlords). If having a secure credit-check system costs more, let the credit bureau's actual customers pay more. And sure, landlords sometimes pass credit-check costs on to tenants but that's just one more part of the whole abusive system that it would be nice to see reigned-in (though naturally I'm not optimistic).

VeronicaJJ123 9y ago

Is using words like "sell-out" for a professional doing his job consistent with HN policies? This is a genuine question and not a rhetorical one.