CFA News Update- June 23, 2011
As the House Appropriations Committee prepared to mark up the financial services appropriations bill this week, CFA urged the committee members to avoid devastating cuts to consumer protection from unsafe financial and consumer products alike. In a statement issued in advance of the scheduled markup, CFA Legislative Director Travis Plunkett decried the bill’s proposal to slash 2012 funding for the new Consumer Financial Protection Bureau nearly in half while simultaneously changing the funding mechanism in a way that increases costs to taxpayers. “By choking off funding for the CFPB and requiring that taxpayers support the agency, this legislation would simultaneously hobble the CFPB and saddle Americans with the cost of funding the agency,” he said. This is further proof, he said, that House leaders “are trying to ensure that the CFPB will be a weak and timid agency, without the will or ability to curb the kind of financial abuses that caused the nation’s worst financial crisis since the Great Depression.”
While the bill spares the Consumer Product Safety Commission from major funding cuts, it includes provisions that would nonetheless hamper the agency’s ability to protect consumers from unsafe products. A group of safety organizations, including CFA, wrote to committee members this week in opposition to provisions that they said would “result in the waste of government resources” while taking away “important public health protections.” One such provision would halt the consumer product safety database that has been up and running since March, providing consumers with valuable information about products that have harmed other consumers. “Gutting the important new consumer incident database, weakening the scope of the current lead limits, and requiring an unnecessary cost benefit, analysis has the combined result of harming consumers and wasting resources,” said CFA Senior Counsel Rachel Weintraub.
In addition, the bill would hold funding for the Securities and Exchange Commission to 2011 levels even as the agency takes on massive new responsibilities for oversight of derivatives, credit rating agencies, and hedge funds. “Denying the SEC the funds it needs to provide effective oversight doesn’t provide a dime in savings for the American taxpayer, since the agency’s budget is fully offset by the fees it collects,” said CFA Director of Investor Protection Barbara Roper. “Meanwhile, funding at this level would leave the agency without the resources it needs to prevent the kind of Wall Street excesses that helped land the nation in its current fiscal difficulties.”
The Department of Energy issued new efficiency standards earlier this month establishing regional standards for central air conditioners and furnaces and strengthening national standards for heat pumps. CFA praised the standards for providing meaningful savings to consumers. “CFA has long supported regional efficiency standards for residential products whose energy consumption is largely dictated by the climate,” said CFA Energy Projects Manager Mel Hall-Crawford. “A more efficient air conditioner in hot weather climates and a more efficient furnace in colder climates mean a greater reduction in energy consumption, resulting in lower energy bills for consumers. These are important pocketbook savings, especially when you consider that residential heating and cooling costs comprise almost 50 percent of home energy consumption.”
CFA Food Policy Institute submitted a letter to the Food Safety and Inspection Service (FSIS) last week in support of the agency’s proposed policy that would prohibit meat and poultry products from entering commerce until negative pathogen test results from agency testing are available. In its notice, FSIS identified 44 Class I recalls during the period from 2007 to 2009 in which an establishment did not hold the sampled product and the sample turned out to be positive for an adulterant. “CFA has long supported the concept of ‘test and hold’ and believes that the requirement to hold product from commerce until negative test results are received should apply to tests conducted by establishments as well,” Chis Waldrop, Director of the CFA Food Policy Institute, wrote. “All establishments should test and hold products pending confirmation of both company and FSIS tests to better assure that contaminated product does not enter commerce.”
Fake check scams, in which consumers are lured into accepting genuine-looking phony checks or money orders and sending cash somewhere in return, come in many forms. But it is easy to spot and avoid these frauds, if you know what to look for, according to experts at CFA and National Consumers League (NCL). To assist consumers in identifying the scam in its various forms and avoid losing their money, CFA and NCL have issued new tips, Five Things You Should Know to Avoid Fake Check Scams, along with new videos about the most common versions of the scam. “The videos use humor to make a serious point,” said CFA Director of Consumer Protection Susan Grant. “These scams can cost you thousands of dollars, and once you’ve sent cash to a crook, it’s likely gone for good.” Links to a variety of educational materials, including both the tips and the videos, are available here.
CFA held its 41st annual Awards Dinner June 15. Former Congressman Paul Kanjorski received the Philip Hart Public Service Award. The Esther Peterson Consumer Service Award was presented to CFA Life Insurance Actuary James Hunt. And recently retired personal finance columnist Humberto Cruz received the Betty Furness Consumer Media Service Award. The dinner also featured a special recognition of Consumers Union in honor of their 75th anniversary. The awards dinner news release, which includes brief bios of the award recipients, is available here.