Consumer Groups Urge FIO to Focus on Insurer’s Role in Addressing the Cost of Climate Change on Consumers
CFA led several consumer and economic justice organizations in calling on the Federal Insurance Office (FIO) to take a leading role in addressing climate change and its impact on insurance costs for consumers and impacted communities, and how insurers contribute to and benefit from this crisis.
In the letter, the organizations urged the FIO to lead the insurance industry toward a Net Zero emissions goal which will protect consumers from the risks of increasingly dangerous climate change, including hurricanes, wildfires, floods, and rising sea levels, and escalating insurance premiums. The groups urged the FIO to develop Climate Risk work streams in the following areas:
- Focusing on insurers’ investing and underwriting practices that impact climate change;
- Ensuring the availability and affordability of property insurance in the face of climate change, especially for lower-income communities and communities of color;
- Coordinating a national effort to develop and implement strategies for mitigating climate risk, and reducing exposure to that risk; and
- Developing federal and regional strategies to meet expanding capital needs for insurance, especially for catastrophic risks and critical needs.
Major insurance companies contribute to and benefit from climate change by underwriting fossil fuel projects that increase greenhouse gas emissions, which makes the planet warmer and causes more extreme weather events, and which in turn increases insurance costs. Insurers invest in climate-changing fossil fuel projects, which worsen climate change, and insurance risks and losses become more severe. These increased losses and risks lead to higher premiums for consumers, even as insurance coverage becomes harder to get.
The organizations also wrote that the FIO should convene thought leaders, collect data, and develop strategies for confronting climate risk in insurance that emphasize mitigation and resilience, affordability and availability, and that “the insurance industry, its regulators, and its consumers have too much at stake to think small or avoid challenging topics, and we look forward to working with FIO as it takes on this very big challenge.”
The insurance industry is in a perfect position to bring about change. Much as they did years ago when they participated in bringing about significant improvements in auto safety, today they can use that model to reduce the claims generated, in part, by corporate polluters.
“Avoiding cataclysmic results requires the global community, and highly industrialized nations particularly, to make dramatic changes that will both reduce long-run exposure to climate risk and improve resiliency in the face of persistent near-and medium-term risks,” the consumer organizations wrote. “The insurance sector is central to effectuating those responses.”
CFA Calls on Congress, Regulators to Provide Necessary Oversight of New Consumer Credit Products in Statement for the Record to U.S. House Task Force on Financial Technology
At a hearing earlier this month, the Consumer Federation of America submitted a statement for the record to the U.S. House Committee on Financial Services Task Force on “Buy Now, Pay More Later? Investigating Risks and Benefits of BNPL and Other Emerging Fintech Cash Flow Products,” arguing that these products should be regulated at the state and federal level and covered by consumer protections.
CFA’s statement addressed three types of innovative, emerging forms of credit: Buy Now, Pay Later (BNPL) loans; Earned Wage Access (EWA) programs; and faux Earned Wage Access, overdraft protection, and cash advance products that collect “tips.” Each of these products could help consumers manage their finances, but they are not risk free and have potential to further burden financially struggling Americans.
“Although innovation has an important role in the financial marketplace, it must be pursued in a way that protects consumers,” said Rachel Gittleman, CFA’s Financial Services Outreach Manager, in the statement. “It should not shield innovators from enforcement and supervision nor limit state and federal regulatory authority. The products and fee models discussed during the hearing, although each unique, share similarities in how they operate and how they use ‘innovation’ to claim that they do not fit within the existing regulatory framework.”
To combat the potential undermining of consumer protection laws, CFA’s recommendation to the Task Force is for the products to be “…subject to the host of state and federal consumer protection laws that regulate credit products,” and that they need, “to be covered by basic consumer protections, including interest rate limits, underwriting for ability-to-repay, cost transparency, dispute rights, and fair lending laws. It is also important that they be examined for unfair, deceptive, or abusive practices independently of compliance with credit laws.”
FDA Must Ensure Online Consumers’ Access to Nutrition Information
CFA and other consumer organizations have asked the U.S. Food and Drug Administration (FDA) to ensure that consumers purchasing food online have access to the same nutrition, ingredients and allergen information that they would have when purchasing foods in brick-and-mortar restaurants and retailers.
Online grocery shopping has grown dramatically in recent years, a trend accelerated by the COVID-19 pandemic. Yet many large retailers and services, such as Walmart, Instacart, and Amazon, often fail to present Nutrition Facts, ingredients, allergen warnings, and other label information for products at the point of sale. The groups’ letter cites examples of these omissions and urges the FDA to issue guidance on how nutrition information should be displayed online at the point of sale. In particular, the groups ask the FDA to require that:
- Online sellers present full Nutrition Facts information in the same format as on the products themselves,
- Nutrition, ingredients, and allergen information is readily accessible (including by removing any intervening marketing information and minimizing the number of “clicks” between the product listing and critical information),
- Nutrition, ingredients, and allergen information is presented in a format that makes it easy to read (for example, by providing an option to zoom in),
- Images of the package front include all statements required by law on the label, in a format that allows consumers to easily read each statement, and
- Selective or incomplete presentations of nutrition, ingredient, or allergen information can be considered inaccurate or misleading.
“Consumers have a right to complete, accurate information about their food, whether they buy it online or in-person,” said Thomas Gremillion, CFA Director of Food Policy. “The FDA should use its authority to protect that right.”
CPSC Proposed Window Covering Rules Will Save Children’s Lives
Product safety advocates applauded the issuance of a Notice of Proposed Rulemaking to address unsafe accessible cords in both stock and custom window coverings by the U.S. Consumer Product Safety Commission. This comes after over two-decades of consistent, targeted advocacy from CFA, Parents for Window Blind Safety, and Independent Safety Consulting, LLC.
The CPSC’s briefing package includes two rules for hazardous corded window coverings sold in the United States that would:
- Categorize stock window coverings that do not comply with the operating and inner cord requirements in ANSI/WCMA A100.1 – 2018, American National Standard for Safety of Corded Window Covering Products (ANSI/WCMA2018), and custom window coverings that do not comply with the requirements for inner cords in ANSI/WCMA-2018, as a substantial product hazard, and
- Establish a Safety Standard for Operating Cords on Custom Window Coverings.
“We petitioned the CPSC in 2014 because of the failure of the voluntary standard to adequately address the hazard posed by accessible window covering cords,” stated Rachel Weintraub, legislative director and general counsel with Consumer Federation of America. “In the last seven years, that failure has only become starker, and the need for a mandatory standard has become even more necessary. This briefing package is critical to effectively addressing these hazards.”
Call to Action – Sign Up to Participate in America Saves Week
America Saves will be celebrating its 15th Annual America Saves Week from February 21 – 25, 2022. The annual campaign calls for a collaborative effort across organizations like financial institutions, government, academia, the military, nonprofits, and more to encourage their constituents to pause, take part in a national conversation about the importance of building financial stability, and to have a check-in on their personal finances in an effort to save more successfully, reduce debt, and begin building wealth.
This year America Saves is inviting all CFA members to sign up and participate in this no-cost campaign. America Saves will provide members with a digital toolkit including ready-to-share content and communications for their staff and constituents.
“At CFA we’ve been encouraging our staff to sign up for automatic savings,” said Jack Gillis, CFA’s Executive Director. “I did it myself a few years ago and I can’t believe how pleasantly surprised I am when I check my account every so often and see how much is there with a very painless small deduction. If each of our members joined the campaign, promoted it to their staff, even those with small teams of 1 to 2, and to their constituents, we would make a significant contribution to increasing people’s personal savings.”
For additional questions, comments, and ways to support the campaign reach out to save@americasaves.org.