CFA News Update- June 5, 2012

Proposed Poultry Inspection Inadequate to Protect Consumers

In comments submitted last week to the U.S. Department of Agriculture

Food Safety and Inspection Service (USDA FSIS), CFA raised serious concerns about the department’s proposal to modernize poultry slaughter inspection.  “The proposal will replace federal inspectors sworn to protect the public health with plant employees who answer only to their company and will not be required to have any training,” Chris Waldrop, Director of CFA’s Food Policy Institute, wrote. “Plants will be allowed to set their own standards for pathogen testing and … defects on birds entering the chiller. Performance standards establishing limits on pathogen contamination on birds at the end of the slaughter line which have been in effect since the beginning of HACCP will be rescinded and replaced with guidance which does not have the force of law. These are key elements of the agency’s proposal. CFA does not believe that the proposal, taken as a whole, will provide the necessary level of safety for consumers and the agency should substantially revise the proposal before moving forward.”  The CFA letter outlines a number of steps the department should take to improve the proposal before moving forward.

Servicemembers Still Exposed to Dangerous Financial Practices, Report Finds

Five years after the landmark Military Lending Act (MLA) took effect, some forms of abusive credit to servicemembers have been reduced, but other equally harmful loans continue to flourish, according to a report released last week by CFA.   Enacted as part of the John Warner National Defense Authorization Act of 2007, the MLA  set a 36 percent inclusive rate cap on credit and banned loans secured by the servicemember’s bank account, vehicle or pay check. Under rules adopted by the Department of Defense, MLA protections apply to payday loans, car title loans, and tax refund anticipation loans, but not to military installment loans, rent-to-own transactions or retail sales financing.  “Servicemembers are safer today from predatory small loans due to the Military Lending Act,” said CFA Director of Financial Services Jean Ann Fox. “The law’s protections should be extended to more forms of credit, and loopholes must be closed to achieve the full protections intended by Congress to protect servicemembers and their families.”  A copy of the full report is available here.  A fact sheet on predatory lending protections for military families is available here.

Consumer Mobile Payment Rights Need Clarification, Strengthening

As mobile phones become ubiquitous and mobile payments rise in popularity, consumer rights with regard to mobile payments need to be strengthened and clarified, CFA and Consumers Union wrote in comments submitted to the Federal Trade Commission in May.  The FTC has undertaken a review of the legal and regulatory framework for consumer protections for mobile payments.  That system is in need of extensive revisions to ensure the consumer rights are protected and that consumers understand their rights, the groups wrote.  “Consumers need consistent and guaranteed protections regardless of the mobile payment method or product used.  Whether consumers link their mobile payments to credit cards, debit cards, prepaid cards, gift cards or bill directly to their mobile phones, consumers should have strong guaranteed protections against losing their money if their mobile device is lost or stolen, or used to make unauthorized payments, or for other erroneous charges due to fraud or mistake.”

Groups Urge Improvements to Appliance Labels

As the Federal Trade Commission considers improvements to its appliance labeling rule, CFA joined with seven other national consumer and energy efficiency organizations to submit comments last month in general support of the FTC proposed revisions.  However, the groups also called on the agency to take additional steps to improve the label to better assist consumers in making informed purchase decisions.  “Because the proposed rule presents an opportunity to correct deficiencies in the existing framework and more effectively communicate crucial energy and cost information to consumers,” the groups wrote, “we call upon FTC to enact further changes to fulfill its statutory mandate of ensuring that the label for ‘each covered product in the type or class of covered products… discloses’ the estimated annual operating cost of the product and ‘that the label be displayed in a manner that the Commission determines is likely to assist consumers in making purchasing decisions.”  The comments also emphasized the need for on-line retailers to display the full EnergyGuide on covered products that are listed.

Consumers Benefit from FDA Decision on “Corn Sugar”

The Food and Drug Administration has denied a petition from the Corn Refiners Association to rename high-fructose corn syrup “corn sugar.” The agency said renaming the product would confuse consumers and could pose a health risk to those suffering from fructose intolerance.  CFA had written in strong opposition to the petition. “Thousands of consumers wrote to the FDA urging the agency to deny the petition,” said Chris Waldrop, Director of the Food Policy Institute at Consumer Federation of America. “FDA’s decision preserves information on the ingredient label that consumers want to know.”