Teachers in Michigan are testing the new Right-to Work law by deciding whether to stay in their union. Michigan has one of several Republican-controlled legislatures that passed laws making union membership and dues voluntary. Many of the 112,000 active members have until the end of August 2014 to decide whether to stay. About 1,500 left the union last August during an early opt-out period. Some teachers feel that the $1,000 spent in union dues per year would be better saved since oftentimes teachers work several years without a raise in salary.
Michigan’s new law has not affected the state’s other unions yet as their collective bargaining agreements will not reach the opt-out period until 2015. Proponents of the law say that it increases workplace freedom and helps attract business.
Since 2011, more than one-third of Wisconsin’s teachers dropped their union. In contrast, Alabama, which is also a right-to-work state, has been able to retain about 80 percent of their members.
Bank of America reached a settlement with federal prosecutors over the sale of mortgage-backed securities in the run-up to the 2008 financial crisis. BofA will pay 10 billion cash and about 7 billion in consumer aid. Most of BofA’s trouble is inherited from its purchase of Countrywide Financial. BofA was charged with misrepresenting the quality of loans it sold to investors.
BofA sold residential mortgages from borrowers who were unlikely able to repay their loans; yet, these securities were promoted as safe investments. Subsequently, the housing market collapsed and investors suffered billions of dollars in losses.
The consumer aid component should come in the form of reducing the principal on loans BofA knows it cannot recover in full. This is one of the “consumer-friendly” activities BofA can engage in order to achieve “credits.” Credits consist of a multiple for each dollar spent on each form of consumer relief. Critics claim that because of credits, tax write-offs, and “other tricks” the fines paid by banks who break the law are worth only a fraction of the amount.