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PacWest Considering "All Options" As Shares Plunge; Jury: Sheeran Did Not Infringe On Copyright Of "Let's Get It On"; Homeland Security Secretary At Border Ahead Of Expected Migrant Surge; Labor Dept: 305 Kids Worked Illegally At McDonald's In KY, IN, MD, OH; Iowa Lawmakers Pass Legislation To Roll Back Child Labor Protections. Aired 1:30-2p ET
Aired May 04, 2023 - 13:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[13:33:11]
JIM SCIUTTO, CNN HOST: Another regional bank is in turmoil today, squeezed in the nation's worst banking crisis since 2008.
California-based PacWest Bank losing half its value today after confirming it's exploring all options, including a possible sale. This comes days after First Republic Bank became the second-largest bank failure in U.S. history.
CNN's Matt Egan has been covering.
Matt, the hope had been from regulators that this was contained, and yet now a third major regional bank in danger. What's happening?
MATT EGAN, CNN REPORTER: Yes, PacWest losing almost half of its value today. You know, any time you see a major bank down by that much in a single day, it is, of course, very concerning.
PacWest confirming that it's exploring all options, that is basically code for they need some help right now.
Importantly, though, PacWest, they say that they have not experienced any, quote, "out-of-the ordinary deposit flows" after the failure of First Republic.
But this is not just about PacWest. Another regional bank, Western Alliance down sharply as well today after the "Financial Times" reported that it, too, is up -- potentially up for sale.
Western Alliance, though, pushing back very strongly, saying this is categorically false, they are not exploring a sale.
All of this weighing on the broader stock market. We see U.S. stocks down again several days in a row at this point.
U.S. officials, they are stressing that the banking system is sound. We heard that from Jerome Powell just yesterday. It's important, Jim, to emphasize there's a difference between what's
happening with bank stocks and banks deposits. Deposits, according to officials, have stabilized. Stocks not so much.
SCIUTTO: Well, the concern is these become self-fulfilling prophecies, right, because one thing can spark another thing. That is the concern.
[13:35:04]
I do want to show you something and get your thoughts. In 2008, the banking crisis, 25 banks failed. The total value of those banks, $364 billion.
In 2023, the three bank failures so far exceeds that, almost by, well, almost by -- almost double, $552 billion.
Different causes to these crises. Of course, 2008 was a failure of mortgage-backed securities. This one a -- really a combination of not predicting or adjusting to higher interest rates.
How do -- when I look at that I think, goodness, we're in a similar danger zone.
EGAN: This is not 2008. This is -- this is different. I mean, banks are much stronger today than they were in 2008 because regulators made them get much stronger. And this is not a full-blown financial meltdown.
But there are clearly major weaknesses in parts of the banking system. And this is happening, in large part, because the Federal Reserve spiked interest rates to try to get inflation under control.
History shows that when they do that, something tends to break, and we have seen something break in the banking system.
But here's why I think this is really important. The risk is a credit crunch that really slows the economy. Because the more nervous bankers are, the less likely they are to lend to all of us. And that can have a real impact on the economy.
SCIUTTO: And we should note, tighten regulations for some banks but not regional banks. They were tightened and rolled back, legislation passed during the Trump administration, and we're seeing some effects of that.
Matt Egan, thank you so much.
Brianna?
BRIANNA KEILAR, CNN HOST: We do have singer, Ed Sheeran, giving a statement live after he was found not liable in his copyright trial. Let's listen.
(BEGIN VIDEO CLIP)
ED SHEERAN, SINGER: -- being fueled by individuals who are -- Good morning, good afternoon, everyone. Thank you so much for being
out here.
I'm obviously very happy with the outcome of the case, and it looks like I'm not having to retire from my day job after all.
At the same time, I'm unbelievably frustrated that baseless claims like this are allowed to go to court. Absolutely.
We spent the last eight years talking about two songs with dramatically different lyrics, melodies, and four chords, which are also different and used by some writers every day all over the world.
These chords are common building blocks, which are used to create music, one before "Let's Get It On" was written, and will be used to make music long after we are all gone.
They are in a songwriter's alphabet, our tool kit. And they should be there for all of us to use. No one -- the way "All the Way There" played in the way that nobody owns "The Color Blue."
Unfortunately, unfounded claims like this are being fueled by individuals offered as music experts for musical analysis.
In this instance, the other side's musicologist left out words and notes and, by doing so, created what I think we proved for all to see were misleading comparisons and disinformation to find supposed similarities where none exist.
And I think we proved for all to see that they tried to manipulate my song to try and convince the jury that they had genuine claim. I'm very grateful that the jury saw through the attempts.
This may seem -- this seems so dangerous to me both potential claimants who may be convinced to bring a bogus claim as well as songwriters facing them. It's simply wrong.
By stopping this practice, we can also properly support genuine music copyright claims with the end result.
If the jury had decided this matter the other way, we might as well say good-bye to the creative -- (INAUDIBLE).
We need to be able to write our original music and engage in independent creation without worrying that every step of the way that such creativity would be wrongly called into question.
Like artists everywhere, Amy and I work hard to independently create songs, which are often based around real-life personal experiences. It's devastating to be accused of stealing someone else's song when we put so much work into our livelihoods.
I'm just a guy with a guitar who loves writing music for people to enjoy. I am not and will never allow myself to be a piggy bank for anyone to shake. Having to be in New York for this trial has meant that I've missed
being with my family, my grandmother's funeral in Ireland, and I will never get that time back.
These trials take a significant toll on everyone involved, including Catherine.
I want to thank the jury for making the decision that will help protect the creative process of songwriters here in the United States and all around the world.
I also want to thank my team, these guys, who supported me throughout this difficult process and to all the songwriters, musicians, and fans, who reached out with support over the last few weeks.
Finally, I would like to thank Amy. Neither of us ever expected that, nine years ago, from our wonderful writing session that we would be here having to defend our integrity.
I feel lucky to have you in my life. Thank you.
We need writers and the wider communities to bring back common sense. These claims made it to be stopped so the creative process can carry on and we can go back to making music.
[13:40:05]
And at the same time, we absolutely need trusted individuals, real experts, who help support the process and protecting copyright.
Thank you.
(END VIDEO CLIP)
KEILAR: All right. Clearly, a relieved Ed Sheeran, but also one frustrated by the process of this court case that has taken a lot of time and many years.
But this is what it said -- ultimately, the jury deciding Ed Sheeran did not infringe on the copyright of that song by Marvin Gaye, "Let's Get It On."
Jessica?
JESSICA DEAN, CNN HOST: Still ahead this afternoon, Homeland Security Secretary Alejandro Mayorkas is headed to the border. His message, as cities brace for a surge of migrants in the coming days.
And a little later, children working at McDonald's, including a 10- year-old who operated a deep fryer. Shocking revelation from a government investigation and how the fast-food giant is responding.
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[13:45:24] DEAN: Homeland Security Chief Alejandro Mayorkas is on the U.S.-Mexico border today to oversee preparations for the end of Title 42. You'll remember that is the public health policy that allowed officials to turn away certain migrants from the U.S. during the coronavirus pandemic.
It's going to end a week from today. As a result, the government is anticipating a major surge in border crossings. President Biden has already deployed 1,500 troops to assist federal agents.
And just yesterday, two busloads of migrants from Texas were dropped off in New York City. Local officials say the city has been averaging roughly 200 arrivals a day. And it's running out of space to house them. More than 50,000 migrants have arrived in New York since last spring.
CNN White House reporter, Priscilla Alvarez, is here.
Priscilla, there are some preparations under way. Walk us through what those are.
PRISCILLA ALVAREZ, CNN WHITE HOUSE REPORTER: The preparations can be broken down into the short term and long term.
In the short term, the administration is racing to bolster capacity, transportation, as you mentioned, send additional troops to help in a support capacity, non-law enforcement capacity.
In the long term, setting up a regional processing center, recognizing that migrants continue to traverse up to the U.S. southern border. So setting up centers where they can apply to come to the United States instead of coming all the way up to the border.
But still, officials I've spoken with and even Homeland Security secretary Alejandro Mayorkas recognizes that this is a challenge. So today, he is observing that in south Texas.
So to give you a bit of a sense of what's happening, let me tick through some numbers. A Homeland Security official I spoke with said that, as of Wednesday, there were over 5,000 migrants in custody in just this portion of the border. And they are also dealing with around 2,000 daily encounters.
What do these numbers mean? They are already under strain. The numbers are creeping up, even though we're days away from this Covid-era restriction ending. And it's already causing challenges for each of -- each part of the sector.
That is what Mayorkas will see. He's also going to review CBP and ICE operations as well as work with and talk with the work force on the ground.
So all of that happening as we speak and as they continue to see these numbers creep up.
DEAN: Right. And something we will probably see continuing to go up as the days go on.
All right, Priscilla Alvarez, we know you'll be keeping an eye on that. Thank you so much.
Jim?
SCIUTTO: Coming up, a 10-year-old frying your French fries at McDonald's -- 10-years-old. That's happened. What a shocking government investigation has found about child labor in this country in the 21st century. That's coming up.
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[13:52:45]
KEILAR: Iowa is on track to roll back child labor protections. The Republican-led legislature there just passed a bill that includes allowing teens to work more hours.
This is the headline that follows a disturbing Labor Department report that looked into child labor law violations. The agency found that hundreds of children were working at McDonald's locations in Indiana, Maryland, and Ohio. And in Kentucky, two 10-year-olds were even found on the job.
We have CNN's Tom Foreman who is here with us now.
Tom, let's start actually with this McDonald's in Louisville specifically. What were 10-year-olds doing there?
TOM FOREMAN, CNN CORRESPONDENT: Pretty much everything, as far as we can tell. If you look -- they worked as late as 2:00 in the morning. They prepared and distributed food. They cleaned the store.
Beyond that, some of them were working the drive-through outside. They even had a case of one that was working the deep fryer in this place. All of which would be something that would be considered off limits here.
McDonald's Corporate, not very happy about these meals.
KEILAR: I'm sure.
FOREMAN: They put out a statement saying they're very unhappy about what they found. They're disturbed by what they found in the area there.
And the McDonald's statement essentially says, "This is not the kind of values that we represent as a company. These reports are unacceptable, deeply troubling, and run afoul of the high expectations we have more the entire McDonald's brand."
KEILAR: Because they're franchise holders, right at these stores. But these are McDonald's.
FOREMAN: Yes. KEILAR: They certainly have a stake in this.
We did mention that Iowa appears ready to be the latest state trying to roll back child labor laws. Walk us through some of what is being proposed but why it's being proposed.
FOREMAN: A lot of states are proposing versions of this saying, you know, there's a labor shortage, there are a lot of kids who can get valuable labor experience in the field.
But you have to remember that there are limits even in these cases. For example, for teens to serve alcohol, they must have written permission from the parent or guardian. They must have two adults present in Iowa.
There are other rules that are federal rules that govern the hours that kids can work, the -- the amount of time they can work, what times of day they can work. All of these things are out there.
Certain types of work that -- for 14 and 15-year-olds, industrial laundry services, in freezers and meat coolers, also in the Iowa provisions there.
So this is a lot of stuff that there is a -- an argument going on about that you can maybe have a legitimate argument about.
[13:55:00]
But the Labor Department is saying, look, there's no legitimate argument that depends on the idea of 10-year-olds doing the kind of work they found here.
And March unemployment rate in Iowa, 2.8 percent. They're fighting to find people there.
Beyond that, they have found hundreds and a rising number of violations of kids working around the country this year. So this isn't isolated to one state or another.
More and more places, businesses are trying to say, you know, if we can just get the kids to work more and bring a few more kids in, they may say they're getting valuable experience.
Others are saying what you're doing is you're endangering them, and you're pushing them away from finishing their educations, which could impact their whole lives even if it helps your business for now.
KEILAR: You can set them who a path that they may not return from.
FOREMAN: Absolutely. No question.
KEILAR: A 10-year-old. Pull up to the drive-through and imagine the double take you would do if you saw a 10-year-old.
FOREMAN: Yes, right.
KEILAR: Tom, thank you so much for this.
Jim?
SCIUTTO: Coming up, four members of the Proud Boys convicted of seditious conspiracy tied to their actions leading up to January 6th. Why the jury is still deliberating at this hour.
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