USDA Finalizes Poultry Rule without Addressing Food Safety Concerns

The U.S. Department of Agriculture (USDA) finalized a revised poultry slaughter inspection rule last week without adequately addressing multiple food safety concerns raised by consumer groups.

Among the rules most glaring shortcomings: it removes inspectors from the slaughter line and turns over certain inspection activities, previously conducted by federal inspectors, to plant employees but does not require plant employees to be trained in their new duties.  It also fails to require plants to test for Salmonella or Campylobacter, the two pathogens most frequently associated with raw poultry.  “USDA has rejected a clear opportunity to better assure the safety of poultry products by not requiring testing for these pathogens,” said Chris Waldrop, Director of CFA’s Food Policy Institute, in a press statement critical of the final rule.

Members of the Safe Food Coalition had responded to an earlier announcement that the revised rule was being sent to the Office of Management and Budget (OMB) for review with a letter calling on both USDA and OMB to release the revised version of the proposed rule, open the rule up for a comment period of 120 days, and hold public meetings on the revised rule. The coalition noted that stakeholders have no information about what the changes to the proposed rule entail.

“We have raised numerous concerns about the negative impact USDA’s proposal will have on food safety and consumer protection,” the groups said in a press statement. “Many other public interest groups, members of Congress and even other government agencies have raised concerns as well. Considering the importance of this rule, the public should be given an opportunity to comment on the changes made to the proposal before the rule is finalized.”

CFPB Proposes New Rules for Lenders’ Mortgage Reporting

The Consumer Financial Protection Bureau (CFPB) has announced the publication of new proposed regulations governing the information that mortgage lenders are required to report each year under the Home Mortgage Disclosure Act (HMDA).  The rules are open for comment until October 22, 2014.

The Dodd-Frank Act made a number of significant changes to the 1975 HMDA, expanding the amount of information and level of detail that lenders are required to report.  This proposed rule-making implements those legislative changes.  HMDA is the major source of information about mortgage lending in the US and has been used by advocates and bank regulators to understand what kinds of credit is available for home purchases and refinances.  The Dodd-Frank amendments, and this rule, expanded reporting requirements in the wake of the financial crisis to include significantly more information about the terms of first-lien mortgage loans.

“The publication of these proposed regs is an important step in the continuing effort to increase transparency in the mortgage lending market,” said Barry Zigas, Director of Housing Policy at CFA.  “The new reporting requirements, however, are only the beginning of this process, as the Bureau has delayed until it receives comments on this proposal specifying how the data will be disclosed and made available to the public once it is collected from lenders.”

CFPB Director Richard Cordray noted in releasing the proposed regulation that, “It is critical that we shed more light on the mortgage market – the largest consumer financial market in the world.  The Home Mortgage Disclosure Act helps financial regulators and public officials keep a watchful eye on emerging trends and problem areas in the mortgage market. Today’s proposal would help us understand better how to protect consumers’ access to mortgage credit while simplifying the reporting requirements for financial institutions.”

Bill Would Hold Corporate Officers Accountable for Concealing Product Hazards

Senators Richard Blumenthal (D-CT), Bob Casey (D-PA), and Tom Harkin (D-IA) introduced legislation last month, the “Hide No Harm Act,” that would hold corporate officers criminally accountable if they knowingly concealed serious dangers that led to consumer or worker deaths. Consumer safety, public health, environmental and other public interest groups applauded the legislation.

“This bill will provide an important deterrent to companies and their executives who knowingly sell and distribute unsafe products to consumers,” said CFA Legislative Director Rachel Weintraub in a press statement. “The consequences to consumers can be dire while the consequences for companies may be negligible. This legislation seeks to ensure that the consequences of selling an unsafe product are significant.”

“The recent case involving General Motors vehicle ignition defects has been linked to at least 13 deaths and many more injuries and went unreported to authorities for more than a dozen years,” the groups wrote in a letter to the Senate last month. “Similar examples of corporate disregard for public safety and health, with no criminal corporate accountability, have occurred related to dangerous children’s products such as Simplicity Cribs, whose defective cribs lead to the deaths of 11 infants and numerous injuries to other infants.”

The groups called on senators to co-sponsor the legislation “to ensure that corporations’ highest priority is the safety of their workers and consumers.”

On CFPB Anniversary, Group’s Laud Bureau’s Accomplishments

In recognition of the fourth anniversary of Dodd-Frank and the third anniversary of the Consumer Financial Protection Bureau (CFPB) last month, consumer and community groups sent a letter to congress detailing the bureau’s accomplishments.  The letter urged members of Congress to support the CFPB in its mission to make sure consumers are better informed, have safer financial options, and are protected from abusive practices.

“The CFPB is a data-driven, deliberative and accountable regulator,” said CFA Legislative Director Rachel Weintraub in a press statement. “In its short history, it has already established an impressive record of listening, learning, and acting in the interest of better financial products and more transparent markets.”

Since its establishment, the CFPB has forced credit card companies to return $1.5 billion to consumers that were deceived by unfair products or practices; stopped an auto lender from targeting service members with deceptive marketing practices and junk auto loan fees; enforced much-needed consumer protections against companies perpetuating the payday loan debt trap; and given a voice to consumers through its consumer complaint system that identifies new problems before there is a crisis.

“There is still much more to be done,” said CFA Financial Services Director Tom Feltner.  “Steadfast support from policymakers is critical to preserving a strong CFPB and ensuring that it has the ability to respond decisively to abusive practices.”

Groups Urge House to Support Operation Choke Point

With the Department of Justice’s Operation Choke Point coming under attack in some quarters, community, consumer and civil rights groups sent a letter to members of the U.S. House of Representatives last month urging them to support the program. The letter urged members to oppose any bills to defund or weaken efforts to fight payment fraud or to insulate from accountability banks and payments processors that do not conduct due diligence or that ignore red flags.

The groups noted that many scams, frauds and illegal activity could not occur without access to the payment system. They said banks and payment processors that originate payments play a critical role in enabling wrongdoers to debit victims’ bank accounts and to move money around. And though banks are not always aware that they are being used to facilitate illegal activity, they become a target for enforcement action when they choose profits in the face of blatant signs of illegality, they said.

“To date the DOJ has brought a single enforcement action as part of Operation Choke Point – against a bank that processed payments for money launderers, unlicensed payday lending, a Ponzi scheme and other frauds,” said CFA Director of Financial Services Tom Feltner.  “We applaud DOJ for protecting consumers and the financial system and urge Congress to ensure that they have every tool at their disposal to prevent illegal activity.”