Consumers Score Important Wins in Omnibus Rider

In good news for consumers, Congress announced this week that it had reached agreement on an omnibus spending bill that was largely, though not completely, free of policy riders attacking important consumer protections.  The bill must still be approved by Congress, always a tricky process for such a complex piece of legislation. Barring unforeseen circumstances, it is expected to come to a vote in the House on Friday and in the Senate after that.

“We applaud Congressional negotiators for working so hard to protect consumers and keep out policy riders in the omnibus that would have curtailed critical rulemaking or thwarted the work of important agencies,” said CFA Legislative Director Rachel Weintraub. “Unfortunately, the omnibus was not entirely free of ideological policy riders,” she added. “We are disappointed that, despite diligence from so many, this must-pass bill was used as the vehicle for these anti-consumer provisions.”

Among the most hotly contested policy riders was one that would have prevented the Department of Labor (DOL) from moving forward on its regulations to improve protections for retirement savers. “Financial firms have mounted one of the most aggressive lobbying campaigns in recent memory to defeat a rule that would require them to put their customers’ interests first when providing retirement investment advice,” said CFA Director of Investor Protection Barbara Roper in a press statement.  “Had they succeeded in getting a policy rider included in this must-pass bill, hopes that workers and retirees would finally get the protections they deserve when they turn to financial professionals for retirement investment advice would have been dashed.”

With no rider preventing the rulemaking from moving forward, DOL is expected to finalize its rule sometime in the first half of next year.  “Even as we celebrate this important victory, it is important to remember that, with billions of dollars of excess profits on the line, we have no doubt industry opponents will continue to seek every opportunity to kill this rule,” said CFA Financial Services Counsel Micah Hauptman. “Members of Congress must continue to stand with their constituents who are saving for a secure and dignified retirement in the face of this persistent industry opposition.”

Similarly, a host of policy riders to weaken the Consumer Financial Protection Bureau also escaped inclusion in the omnibus.  These included riders to eliminate the CFPB’s direct funding source, restructure it as a commission, and prevent it from implementing important rules related to forced arbitration. “It is significant that the CFPB, which has benefited so many consumers and worked to ensure a fairer financial marketplace every day since its doors were opened, was not stopped in its tracks by provisions in the Omnibus,”  Weintraub said.

On the other hand, the omnibus does include two riders that harm the public interest: a rider that prevents CPSC from moving forward with its Recreational Off-Highway Vehicle (ROV) rule and one to restrict country-of-origin labeling on certain foods.

The ROV rider both prevents CPSC from moving forward on a rule improving the safety of recreational off-highway vehicles and requires CPSC to expend funds from its limited budget to pay for the National Academy of Sciences to conduct an unnecessary study.  CFA and its partners have documented at least 78 fatalities associated with ROVs from January 2014 through December 2014.  From January 2015 through November 2, 2015, CFA and its partners have identified 63 deaths that involved an ROV.  In total, CFA found that from January 1, 2014, through November 2, 2015, there were 141 ROV fatalities. “Unfortunately, too many lives have been lost as a result of ROVs,” Weintraub said.  “Now, not only have CPSC’s efforts to reverse this trend been thwarted, but its broader efforts to protect consumers will also be limited by the unnecessary expense of a redundant study.”

The Omnibus’s country of origin or COOL rider repeals country of origin labeling (COOL) for beef, pork, and ground beef/pork but not for poultry or other food products. The vote came in the wake of a World Trade Organization ruling that authorized over a billion dollars in retaliatory tariffs, leading some in Congress to call for a repeal. COOL laws, which are strongly supported by ninety percent of Americans, give consumers information about where the fresh meat and poultry they consume is produced, noted CFA Director of Food Policy Thomas Gremillion.  The rider would not only harm American farmers and ranchers, but also consumers who have come to expect their food to be properly labeled, as poll after poll has shown. “Consumers would lose the right to know what country their beef and pork comes from,” Gremillion said in a press statement. “The repeal would also set a terrible precedent that threatens COOL laws for other foods-from fish and shellfish to fresh and frozen fruits and vegetables and many nuts. Congress is sending the message that it will repeal those laws too if another WTO panel orders it to do so.”

Data Breach Bill Would Do More Harm than Good

The House Financial Services Committee passed a data breach bill, H.R. 2205, the Data Security Act of 2015, that consumer groups say would do more harm than good. The groups sent a  letter to the Committee in advance of the mark-up outlining a number of problems with the bill.  Although the bill was amended in ways that address some of the concerns raised by the groups in their letter, the groups concluded that, even as revised, it would on balance still do consumers far more harm than good.

“This bill is a step backwards,” said CFA Director of Consumer Protection Susan Grant. “While some of the provisions, such as requiring covered entities to implement data security programs, are helpful, H.R 2205 fails to improve the level of protection that consumers already have under their state laws and would prevent states from enforcing those laws and from enacting new protections as needed.”

Among the key shortcomings in the bill as adopted, it would:

• eliminate strong existing state protections and prevent future state innovation;
• eliminate means of redress currently available to consumers in many states;
• eliminate critical flexibility to adapt data security and breach notification standards to address shifting threats;
• eliminate key protections under the Communications Act for telecommunications, cable, and satellite records;
• tie breach notification to a “harm trigger” that is much narrower than existing laws in the majority of states;

“We appreciate the fact that House members are concerned about the epidemic of data breaches,” Grant said.  “This legislation is not the right cure, however, and will leave consumers worse off than they were before.”

CPSC Urged to Protect Consumers from Certain Flame Retardants

Testifying last week at a hearing before the U.S. Consumer Product Safety Commission (CPSC), CFA Legislative Director Rachel Weintraub urged the Commission to adopt mandatory standards under the Federal Hazardous Substances Act (FHSA) to protect consumers from the health hazards caused by the use of non-polymeric, additive form, organohalogen flame retardants in children’s products, furniture, mattresses and the casings surrounding electronics.

The hearing was held to consider a petition, filed by a number of consumer and health organizations, including CFA, requesting that CPSC adopt mandatory standards under FHSA to address these hazards. “The CPSC has clear authority to take the actions requested in this petition,” said Weintraub.

In her testimony, Weintraub discussed CPSC’s legal authority to adopt standards under the FHSA, reviewed courts’ interpretation of FHSA and spoke of CPSC having a history of using its authority under FHSA to address chemical hazards in consumer products. She also explained why labeling would not offer sufficient protections.

Because consumers are unaware of the potential hazard associated with the chemicals, a warning that a product contains the chemicals would be ineffective, she explained.  “More importantly, there is no particular type of use, condition, or behavior that a consumer could take to avoid adverse health impacts from exposure to these flame retardants,” she said. “Knowledge of a potential health hazard, alone, without a clear alternative, will not provide consumers with sufficient information nor options to effectively limit their exposure. Knowledge could increase consumer awareness of health impacts but without clear alternatives to products, may lead to consumer confusion in this context.

“We urge the Commission to use this authority to grant the request made in the Petition to protect consumers from the documented hazards posed by the use of non-polymeric, additive form, organohalogen flame retardants in children’s products, furniture, mattresses and the casings surrounding electronics,” Weintraub concluded.

FDA Proposal Would Make Medical Cribs and Bassinets Safer

American Academy of Pediatrics, Consumer Federation of America, Consumers Union, and Kids In Danger filed joint comments last week in overall support of a Food and Drug Administration (FDA) rule proposal to improve the safety of pediatric medical cribs and medical bassinets.

“We commend the FDA for analyzing adverse events related to pediatric medical cribs and medical bassinets and proposing to make these devices safer,” the groups wrote. “Infants and children undergoing medical care are among our most fragile; the risks they face from illness and injury should not be compounded by hazards associated with the very devices intended to allow them to rest and to heal.”

The groups wrote in general support of the proposed requirement that that medical cribs and medical bassinets be used in homes and daycares under authorized prescription only and when medically necessary, the proposal to update flammability standards for mattresses used in medical cribs and medical bassinets, and the effort FDA has made to address damage to medical bassinets from both cleaning and tipping hazards.  In each case, however, they suggested ways in which the proposal could and should be strengthened.

“We hope that the FDA also includes a requirement for third party testing to ensure compliance with the new standard, as the U.S. Consumer Product Safety Commission requires for its mandatory crib safety rule,” said CFA’s Legislative Director and General Counsel Rachel Weintraub.