CFA News Update - June 6, 2013
Advocates Petition CPSC to Make Window Covering Cords Safer for Children
Consumer and safety groups, including CFA, filed a petition with Consumer Product Safety Commission (CPSC) last month requesting that the agency promulgate mandatory standards to make operating cords for window coverings inaccessible.
Named as one of the “top five hidden hazards of the home,” window covering cords have long been identified by the CPSC to be a danger for children. According to data from the CPSC, 293 children have been killed or seriously injured by accessible window covering cords between 1996 and 2012. The rate of injuries and deaths has not been significantly reduced since 1983, despite six industry attempts at developing adequate voluntary standards.
In a press release announcing the petition, the groups urged strong action. “Every voluntary standards process for window coverings has resulted in a standard that has failed to address approximately 40 percent of the injuries and deaths caused by window covering cords,” stated CFA Legislative Director Rachel Weintraub. “Feasible and cost-effective designs that eliminate the risk of window cord strangulations already exist, but the voluntary standard does not require their use. This continuing failure, coupled with on-going resistance by the window covering industry to make cordless window coverings the industry norm, indicates that mandatory action by the CPSC is needed to prevent further needless deaths and injuries.”
Treasury’s Voluntary Labeling Plan for Alcoholic Beverages Called Insufficient
The Tax and Trade Bureau (TTB) at the Department of Treasury approved a plan last week to allow voluntary labeling of serving facts for alcoholic beverages. TTB’s decision came in response to government action against Four Loko, a popular alcoholic beverage that includes caffeine. As part of the agreement, Four Loko was required to apply to TTB for permission to include an alcoholic facts panel on their product.
“While we recognize the challenges inherent in developing new labeling, and see this as a good first step, we are somewhat troubled that TTB has decided to allow voluntary labeling rather then moving forward with long delayed rulemaking regarding mandatory labeling,” said Chris Waldrop, Director of CFA’s Food Policy Institute, in a statement on the decision released with the National Consumers League and Shape Up America! “Consumer groups will continue to push for mandatory, standardized and comprehensive labels on all alcoholic products,” Waldrop added.
CFA Urges FCC to Set Spectrum Auction Rules
As the Federal Communications Commission (FCC) proceeds with plans to auction off what may be the last high-quality, low frequency spectrum (below 1 GHz) to be made available in the foreseeable future, CFA filed comments this week urging the agency to set rules for the auction to prevent “excessive concentration of control over high-quality spectrum” and “promote greater competition in a market that is currently highly concentrated.”
In a press statement highlighting the issue, CFA Research Director Mark Cooper noted that the Department of Justice had found that AT&T and Verizon already hold licenses for almost four-fifths of the high-quality, low frequency spectrum. “Unless the FCC sets reasonable limits on how much high-quality, low-frequency spectrum the two dominant firms can acquire in the auction and hold, competition will be stifled in the wireless market,” he stated.
In its comments, CFA endorsed an analysis of the wireless market submitted by the Department of Justice and refuted arguments put forward by AT&T and Verizon. “Following the Department of Justice recommendation is one of the most important steps the FCC can take to lower prices and improve consumer choice in the wireless market,” Cooper said.
Consumer Groups Praise FDIC and OCC Proposed Guidance on Bank Payday Lending
In a joint comment letter filed with the agencies last week, consumer groups expressed strong support for the underwriting requirements and limits on repeat loans included in the proposed guidance on deposit advance products, or bank payday lending, issued earlier this year by the Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC). “These critical provisions address a central problem with payday lending: lenders’ failure to verify the borrower’s ability to repay the loan, and meet other expenses, without reborrowing, leading to a destructive cycle of repeat loans that trap borrowers in long-term debt,” they wrote.
The comment letter contains additional recommendations, including clarifying that safe and sound banking principles require that interest and fees be reasonable; limiting imposition of mandatory automatic repayment; and backing up the guidance with effective oversight and strong enforcement. “When consumers turn to their bank for short-term credit options, they should be able to do so with the expectation that the credit they receive is safe and sustainable,” said CFA Financial Services Director Tom Feltner. “The proposed guidance, if adopted, will ensure that consumers are protected from the worst abuses in the short-term credit market.”
House Considers Bill to Impede SEC’s Ability to Protect Customers of Broker-Dealers
As part of its ongoing effort to reverse key aspects of financial reform, the House Financial Services Committee held a legislative hearing last week to consider four bills to roll back pro-investor reforms and rein in financial regulators. Among the legislative proposals considered was a discussion draft to impede the ability of the Securities and Exchange Commission to strengthen protections for customers of broker-dealers.
CFA and Americans for Financial Reform submitted a joint letter opposing the discussion draft on the grounds that it would “place unreasonable conditions on the Securities and Exchange Commission as it considers whether to raise the standard of conduct that applies to brokers when they give personalized investment advice to retail investors.”
“Middle income Americans pay millions of dollars in excess costs because brokers are free to make recommendations that place their own financial interests ahead of their clients’ even as they market themselves as trusted advisers,” said CFA Director of Investor Protection Barbara Roper. “After more than a decade of study, the SEC is finally on the brink of acting to fix this long festering problem. It is unfortunate that, instead of spurring the agency to take forceful action, some members of Congress are putting their energy into protecting brokers from having to act in their customers’ best interests.”
Also included in the hearing were bills to: repeal the Dodd-Frank Act provision requiring public companies to disclose the ratio of CEO to worker pay (H.R. 1135); weaken oversight of private equity funds (H.R. 1105); and prohibit the Public Company Accounting Oversight Board from requiring mandatory auditor rotation (H.R. 1564).
CFA Awards Dinner to Honor Consumer Champions
CFA will honor consumer champions at its 43rd annual Awards Dinner Wednesday, June 26 in Washington, D.C. Rep. Carolyn Maloney and Rep. Jan Schakowsky will receive Philip Hart Public Service Awards. The Esther Peterson Consumer Service Award will be presented to former National Rural Electric Cooperative Association CEO Glenn English. And CFA Public Affairs Director Jack Gillis will receive the Betty Furness Consumer Media Service Award. Additional information on the dinner, including an online registration form, is available on the CFA website.