News wasn’t all bad for immigrants — the study found the largest job growth for foreign-born workers since 2000 was in middle-skilled jobs, which allow for higher pay and more opportunities for upward mobility. Less educated immigrants may have trouble entering sectors that require them to speak English, such as health care, hospitality and information technology. This means construction jobs were particularly important for new immigrants and those who could not speak English.

Health care, construction, information technology and hospitality were studied because they employ about 40 percent of foreign-born workers and 30 percent of the overall workforce. In all four, immigrants suffered lower job growth or higher job loss than native-born workers.

The study’s findings counter some arguments against the family-based visa system, which doles out more visas based on relatives in the U.S. than it does based on strategic employment interests. Proponents of a visa overhaul argue the system should be changed to ensure immigrants with specific skill sets are entering the country to help grow certain industries, but the report found immigrants are filling jobs in middle-skill sectors even though visas are not set aside for them.

The deal keeps most of Durbin’s language intact. But it keeps authority over swipe fees with the Federal Reserve, rather than transferring authority to the new Consumer Financial Protection Agency. It also lets the Fed consider fraud-prevention costs when determining fee limits. The language does not impact credit card fees.

Durbin’s office released a good summary of the changes to the “swipe fee” provision, named after the banks’ term for the charges for using a debit card. Alterations are in italics. I’ve trimmed down to just some of the changes.

Government administered cards

The Senate-passed amendment would regulate the interchange fees associated with debit or prepaid cards issued by large banks on behalf of government-administered payment programs (e.g., unemployment insurance, TANF, child support).

The compromise exempts federal, state and local government program debit and prepaid cards from interchange regulation, provided that after a two-year grace period the prepaid cardholding beneficiaries are not charged any overdraft fees or fees for the first monthly in-network ATM withdrawal.

• Definition of “interchange transaction fee”

The Senate-passed amendment defined “interchange transaction fee” to include debit card fees that are established by a payment card network (e.g., Visa and MasterCard) and that accrue to either the card-issuing bank or to the network itself.

The compromise provides that the Fed cannot regulate network fees (i.e., the fees that Visa and MasterCard charge and that accrue to themselves) except to ensure that the fees are not used to circumvent interchange fee regulation. These changes are a different way of accomplishing the same goal of protecting consumers from loopholes which would allow banks to raise fees to cover any loss in interchange revenue.

• Reloadable prepaid cards

The Senate-passed amendment would regulate the interchange fees associated with reloadable prepaid debit cards, which are in common use by consumers who lack bank accounts.

The compromise exempts these cards from interchange regulation, provided that after a two-year grace period the issuing bank must not charge cardholders any overdraft fees or fees for the first monthly in-network ATM withdrawal. The compromise is an attempt to protect the unbanked from being driven to payday lenders and other non-bank entities for their financial needs. It further ensures that fees won’t be charged on those who can least afford them.

• Authority of the Federal Reserve Board vs. the Consumer Financial Protection Agency/Bureau

The Senate-passed amendment provided for regulatory authority under the amendment to migrate to the Consumer Financial Protection Agency/Bureau after the CFPA/B is established.

The compromise provides that regulatory authority under the amendment shall remain with the Fed.

Consumer advocates will be happy with the changes to exclude government-issued cards and prepaid debit cards from the new regulations. Democrats were concerned that banks would have stopped offering the products under the initial swipe-fee language.

Durbin’s amendment to the Senate financial regulatory reform bill prevents big card issuers like Visa and MasterCard from charging high “swipe fees” — which netted $48 billion for credit and debit cards in 2008 — even though the cost of processing transactions has decreased. The amendment is targeted at lowering swipe fees for small businesses.

Here is the full text of the letter:

Dear Mr. Saunders and Mr. Selander:

I write in regard to the unfortunate coordinated campaign your companies have launched distorting the impact of my recently-passed interchange amendment on small banks and credit unions.

It appears that, in an effort to frighten small banks and credit unions into opposing the amendment, your companies are threatening to make changes to your small bank interchange fee rates and to your network operating rules. These changes, which are not in any way required by the amendment, are unnecessary and would disadvantage small card-issuing institutions.

I ask you each to state unequivocally that you are neither threatening nor planning to take steps that would purposefully disadvantage small institutions, should the amendment become law. Further, I warn you that if your companies coordinate with each other or collude with your largest member banks to make changes to your fees and rules, it would raise serious concerns that you are engaging in an unlawful restraint of trade.

The amendment I offered, which was passed by the Senate in a bipartisan vote of 64-33, would establish a reasonable interchange fee standard for transactions involving debit cards issued by banks with assets of over $10 billion. The amendment would also prevent your companies from punishing merchants who provide discounts to customers for use of a particular card network (e.g., Visa vs. MasterCard) or a particular form of payment (e.g., cash vs. debit card vs. credit card), or who set minimum or maximum dollar thresholds for use of a credit card.

This language was carefully drafted in order to avoid creating any disadvantage for small banks and credit unions, and I went to great lengths to protect the ability of these small institutions to successfully compete with big banks in offering payment cards to consumers.

As you know, the amendment does not in any way require changes to the interchange fee rates that your companies have established for small banks and credit unions. In fact, 99% of all U.S. financial institutions are exempted from the amendment’s debit fee regulations.

Nor does the provision in any way permit merchants to discriminate against cards issued by small issuers. It does not touch your current network operating rules that require that cards be honored in the same way regardless of the identity of the bank that issued the card.

The only way that small banks or credit unions could experience interchange rate reductions or be discriminated against is if your companies decide to cut small bank interchange rates and rescind your operating rules that currently prohibit discrimination between card-issuing banks.  Sadly, it appears from your companies’ public statements and other communications that you are contemplating just such steps.

In a May 20 statement, Visa charged that the amendment “could especially harm community banks and credit unions that depend on interchange to offer competitive banking services to firefighters, police officers, teachers, veterans, congressional staffers and other customers.”  Also in a May 20 statement, MasterCard said the amendment will “punish banks on Main Street because the ‘carve-out’ for banks with assets below $10 billion is a sham.”  The simple fact is, however, that small banks would not be harmed or punished under the amendment unless your companies decide to harm or punish them.

If your companies were to coordinate such punitive actions in the same way that you appear to have coordinated your messaging tactics, serious concerns would be raised that you are engaging in an unlawful restraint of trade.  Further, I would caution you not to collude with your largest member banks to change your fees and rules in an effort to protect the big banks against competition from smaller card-issuing banks.  Such steps would also raise serious antitrust concerns.

I know that your companies strongly oppose the amendment that was adopted by the Senate, and I am not surprised by your opposition.  The provision would correct anti-competitive aspects of a system that has brought enormous revenue to your companies and to the largest banks at the expense of America’s small businesses and consumers.  Nevertheless, I urge you to commit that if this amendment becomes law, you will not take steps to purposefully disadvantage small issuers.  By making such a commitment, you will provide much-needed reassurance that you are not attempting to protect the biggest banks you serve by threatening the smallest.

Please respond in writing to this letter by June 14.  I look forward to receiving your responses.

Sincerely,
Richard J. Durbin
United States Senator

- Yesterday, President Obama met with members of the Domestic Policy Council to talk strategy on immigration reform, focusing on ways to advance the efforts of Sens. Charles Schumer (D-N.Y.) and Lindsey Graham (R-S.C.), who have been working on a bill for several months. The White House has agreed that the bill should include a path toward citizenship for the millions of illegal immigrants, but that it would come with penalties for violating the law and a fine.

- A Texas judge has publicly denounced the volume of court cases involving non-violent undocumented immigrants in Texas. The mounting number of cases has become increasingly problematic for courts across the country, and U.S. District Judge Sam Sparks of Austin has issued an order challenging the U.S. attorney’s office to justify each illegal re-entry case brought before him. His action is unprecedented, say lawyers. “It appears the United States Attorney is not screening these cases to eliminate those persons who need no federal prosecution and should simply be returned to their own country,” he wrote in his order. Sparks noted that these cases spend money and time on immigrants who could be deported without prosecution. His critique seems to be aimed at exactly what the Bush’s administration’s Operation Streamline, which has been continued by Obama, strives to do: prosecute all illegal immigrants criminally, regardless of criminal history.

- A Florida language school has been under investigation for what’s been called “the largest visa fraud investigation in the [U.S. Immigration and Custom Enforcement's] history.” The school’s owner and an employee are responsible for applying for student visas for students who never attended class. They apparently sold student visas without any requirements and made about $2.4 million over the past three years from their operation.

- Mexican drug gangs have been using U.S. public lands to grow marijuana for decades, but their presence is now more persistent than ever. About a million more pot plants were found by local, state and federal agents each year between 2004 and 2008. Mexican drug traffickers, using smuggled immigrants who are often extorted into working on the farms, can grow up to 30 tons a year.

- A new bill would offer legal residence status to immigrant entrepreneurs who secure a minimum of $250,000 to start up their businesses. The Start-Up Visa Act of 2010, proposed by Sens. John Kerry (D-Mass.) and Richard Lugar (R-Ind.) last week, could also create jobs. This two-year visa would require that entrepreneurs create five or more jobs and collect an addition $1 million in investment or revenue during that time to obtain a green card. “It’s a more accessible version of the existing EB-5 Immigrant Investor visa program which grants legal permanent residency to immigrants who can prove that their investment (of at least $500,000 to $1 million) in a U.S. business preserves or creates at least 10 U.S. jobs after two years,” points out the pro-immigrant Immigration Impact.

- In New York City, advocates have denounced the police department’s failure to help victims who are in the process of applying for, or in need of, a U visa. The visa programs allows immigrants who were mentally or physically abused and who cooperate with the police during investigations to stay in the country legally and work up to four years while they apply for permanent residency. But several reports from Spanish-language newspapers have found that the NYPD has ignored many of these cases after women cooperated with officials.

- California’s GOP gubernatorial candidates are using illegal immigration as a central issue to distinguish themselves from one another to get ahead in the primary. Candidates Steve Poizner and Meg Whitman have been recently been using the issue of immigration in their speeches to appeal to different sides of the Republican Party. Poizner has had a firm stance on immigration, saying he plans on “stopping it once and for all.” Whitman, a moderate on the issue, has said she favors working on creating a path for illegal immigrants toward legalization, but opposes amnesty. Whitman is currently leading in the polls.

- In an NPR interview, Tomás Jiménez, an author and professor of sociology, discusses how drug and gang violence along the U.S.-Mexico border is changing the relationship between Mexican immigrants living in the U.S. and their relatives on the other side. Read the interview here.

- Here’s a look at the Census Bureau’s history of complicating and narrowing the cultural and ethnic compositions of Hispanic immigrants in the U.S.

- “In the past year, Texas saw an 85-percent increase in all official refugee arrivals,” The Texas Observer reports. Much of that might be attributed to North Texas refugee organizations. Since 2006, the Dallas-Fort Worth area has been a central refugee destination for Middle Eastern families, especially for Iraqis. “Between 2006 and 2009, 2,822 Iraqis officially resettled in Texas. Thousands more are on the way.”

Case in point: Wells Fargo CEO John Stumpf. His compensation for 2009 — if you count the bonus he got mid-year — will be around $24 million. Well Fargo’s profit for 2009, however, was $7.99 billion, far shy of Chase’s $11.7 billion or Goldman’s $13 billion profit last year. Unlike Chase and Goldman, Wells Fargo didn’t pay off its TARP money until the very end of 2009, just in time to free Stumpf from the strictures of executive compensation limits. And while Dimon and Blankfein didn’t get bonuses in 2008, Stumpf took home a cool $13.8 million on Wells Fargo’s $2.66 billion profit in that year, which was less than half of the profit seen under Dimon’s leadership at Chase in the same year.

Dash notes other executives that seem to be getting paid even as their companies continue to founder: Morgan Stanley CEO James Gorman is set to get $11 to 13 million for 2009, even though his company posted an annual loss. Bank of America’s highest-paid executive this year is Gregory Curl, who got $9.2 million in stock even as his employer was coming to a deal to avoid prosecution over the acquisition of Merrill Lynch that he led. And Visa’s now-former president, Hans Morris, took home $24 million just for retiring in 2009.

Obviously, there’s only so much begrudging one President can do.

As Spencer has pointed out, the State Department says it passed along the warning about Abdulmutallab from his father to the rest of the government through an interagency process. That does not appear to have alerted the FBI, which itself seems odd. But even if it had, there’s no guarantee that would have landed Abdulmutallab on the terrorism watchlist — also called the “no-fly list.”

As the 2008 FBI audit released last May explained, the FBI’s practices for nominating people to the terror watchlist were a mess. Although “FBI policy allows for the nomination of known or suspected international terrorists for whom the FBI does not have a terrorism investigation,” the controls over those nominations were “weak or nonexistent,” the report concluded. The report further found that in 15 percent of cases, terror suspects who should have been nominated for the terror watchlist were not — including one suspect who was under investigation for four years.

When Congress takes up the matter next month, it should consider why the FBI wasn’t informed about a Nigerian Muslim flying to the United States after his own father warned he was an Islamic extremist presenting a safety risk — and whether the FBI and the rest of the government has cleaned up its own procedures enough to flag a suspect like this in the future.

Today, in a press briefing, State Department spokesman Ian Kelly confirmed that the information acquired about Abdulmutallab from his father was insufficient to revoke his visa to enter the U.S., which the department issued in June 2008, long before it had any basis for considering him a threat. Kelly all but implored reporters not to blame State for the security lapse:

MR. KELLY: Once we issue the visa, and there comes – there is information subsequent to that issuance, the State Department role is to pass that information on, which is what we did after this November 19 visit. So we sent in what’s called a VISAS VIPER cable. This is a system that was set up after November – September 11, 2001, and under this system, when we receive information that could cause the – cause us concern, we send it in to the counterterrorism community for their review. There was also set up, as you all know, the National Counterterrorism Center. And this is the interagency process that reviews the information as this information comes in.

QUESTION: Can I stop you –

MR. KELLY: And the information in this VISAS VIPER cable was insufficient for this interagency review process to make a determination that this individual’s visa should be revoked. It wasn’t – it’s not – it’s insufficient, and it is not a State Department determination per se in these kinds of issues under – let me give you the name of the act of Congress – under the Enhanced Border Security and Visa Entry Reform Act of 2002, the State Department is mandated to utilize this VISAS VIPER system when we get information, like we did on November 19.

Kelly clarified later in the briefing that the interagency process for reviewing the revocation of visas after the VIPER process falls under the aegis of the National Counterterrorism Center.”I think it’s incumbent upon the NCTC, as I understand it, for them to come to us and ask us to revoke the visa,” he said. So expect next month’s congressional hearings on Abdulmutallab to focus on why that process determined that the alleged would-be bomber could keep his visa.

Did you know that since 2003, when the subprime market really took off, April has been Financial Literacy Month? Now you do. But in an age where financial expertise seems so discredited what qualifies someone to be financially literate?

It’s a fair question. Unfortunately, the answers aren’t reassuring. First, as Konczal notes, “financial literacy” as a course of study doesn’t exactly exist in the economics field. There’s no incentive to get published on it; there’s little academic research as a result. What fills the gap? As we pointed out, subprime lenders align themselves with mainstream financial literacy groups and fund their efforts as a way to distract from the controversies surrounding their products. Konczal explains the problem goes even further, with unqualified “experts” dispensing their alleged personal finance wisdom.

There’s little academic backing, there’s no money for journals, research grants, conferences, the development of theory and expertise that is deployable into policy. That leaves the field wide open to be funded by credit card companies, subprime lenders, and others with a vested interest in certain modes of thought becoming the norm. And for expertise to be filled by people who come from motivational speaking backgrounds, and theory to end up as a mess of common-sense adages and low-level morality plays. The theme of Financial Literacy Month for 2008 was “Financial Responsibility Begins with Me”; why didn’t they call it “caveat emptor”?

One of the biggest hurdles facing the creation of legitimate and useful financial literacy programs will continue to be funding for non-biased, professional counselors.  It’s not a great time to push the government to provide more money to the nation’s Cooperative Extension System — but that national educational network remains a valuable source of credible personal finance research. And as we said, some corporations are beginning to incorporate financial literacy into their human resources responsibilities, given the problem of employees burdened with distracting financial problems.

In the end, that may really be what it takes to get untainted financial literacy education going — the overwhelming debt crisis facing American consumers. Maybe the government and the private sector will come to realize that partnering with credit card companies and subprime lenders isn’t going to get the job done. As Calculated Risk has repeatedly asked, why aren’t consumers being educated on the perils of not paying their credit card bills off in full every month? Probably because, in the absence of untainted financial literacy advice, a company like Visa is backing a high-profile financial literacy initiative. It seems unlikely advising people to pay off their credit cards is the focus of that effort.

As credit tightens, so will the need for legitimate financial literacy education. And as consumer debt becomes something harder to ignore, maybe the unholy alliance of creditors with a stake in the game and financial literacy education programs often aimed at younger borrowers in particular, will finally come to an end.

On television it’s hard to miss the wildly popular band of slackers singing ruefully from a shabby apartment or while waiting tables in pirate regalia. The ruined credit that led to their financial misfortune might have been sparkling if only they’d tracked their status on freecreditreport.com.

The Federal Trade Commission is not amused. It has long believed that the company that owns freecreditreport.com is deliberately diverting people from a government-mandated site where consumers can get free credit reports by law, and using the reports as a lure for a $14.95 monthly service that alerts subscribers to important changes in their credit status.

The government even has put together a spoof video of those popular ads, with singers letting consumers know they can check their credit reports for free. But beyond the ads, the story explains, is the $1 billion credit monitoring industry, which allows consumers to check for real-time changes to their reports. With the exception of identity theft victims, few consumers have a need for that kind of monitoring. And if they do, they can check their credit themselves, without charge, several times a year.

The problem is that some consumers sign up unwittingly for these monitoring services, thinking they’re getting a one-time free credit score check, and finding themselves instead locked into a monthly fee as high as $30. And such services are peddled not just by those freecreditreport.com singers, but by the big three credit bureaus and major credit card companies.

The fact that consumers are signing up — and paying — for services they can get for free from the government tells you a lot about the state of financial literacy in this country. Our story mentioned car title dealers, payday lenders and other fringe banking services that cater mostly to low- and moderate-income consumers. But the Times story makes clear financial literacy knows no income boundaries, with consumers being tripped up by mainstream lenders as well. Magic Johnson isn’t the only celebrity endorsing predatory businesses, like Rent-A-Center. Former New York Times Sunday Business columnist Ben Stein got fired after doing commercials for a shady credit reporting company.

Good luck to the government trying to educate consumers about this. It won’t be easy. When I called up the New York Times piece to write this post, all kinds of ads for free credit scores and credit monitoring companies popped up on my screen. And as we mentioned, financial literacy efforts in this country often don’t come just from the government or other unbiased sources, but from corporations and lenders with a stake in the game.

Visa, for example, announced recently its goal of helping 20 million people worldwide with financial literacy skills, attracting some positive publicity for the effort. Wonder if the advice will include paying off your credit card balance in its entirety each month, or, better yet, avoiding the plastic altogether.