Budget Leaves Poultry Inspection at Risk

As Congress was putting the finishing touches on the 2014 federal budget, the Safe Food Coalition and the Worker Health and Safety Coalition sent a letter to House and Senate appropriators opposing budget reductions for USDA’s Food Safety Inspection Service (FSIS) and urging Congress to strip out provisions in the bill directing the U.S. Department of Agriculture (USDA) to move forward with its proposal to substantially change the poultry inspection program.  Ultimately, while the language on poultry inspection was removed but the funding reductions were retained, increasing the likelihood that the agency will move forward with changes that reduce poultry inspection effectiveness.

“USDA’s proposed poultry rule has serious deficiencies,” said Chris Waldrop, Director of CFA’s Food Policy Institute. “USDA shouldn’t be forced into finalizing the proposal because of budget pressure.”

In their letter, the groups raised serious concerns  about USDA’s poultry inspection proposal and its impact on public health.  They pointed to a recent report by the U.S. Government Accountability Office (GAO, which  identified major deficiencies in the data and analysis of the poultry pilot program upon which FSIS based its poultry slaughter proposal.

Among the most troubling features of the USDA proposal identified by the groups are:

• Its failure to require plants to test for Salmonella or Campylobacter, the two pathogens most frequently associated with raw poultry;
• Its failure to set uniform standards, instead allowing each plant to decide the level of bruises, feathers, bile or ingesta appropriate for birds going down the processing line; and
• Its failure to limit fast line speed, which already is a major cause of high injury rates among poultry processing workers.

“USDA’s poultry inspection system does need to be modernized, but this proposal raises serious food safety and worker safety concerns,” the group wrote. “We urge you to remove the report language from the final appropriations report and to restore the budget cut of $11.73 million.”

Major Banks End Payday Loans

Fifth Third Bank, Guaranty Bank, Regions Bank, US Bank and Wells Fargo announced earlier this month that they would no longer offer bank-based payday loans, referred to as deposit advance loans, to their checking account customers. “The Consumer Federation of America applauds the elimination of these products, which harm consumers through high rates and an insufficient consideration of borrowers’ ability to repay without additional borrowing. This is a very positive step for consumers,” said CFA Director of Financial Services Tom Feltner in a press statement.

Recent findings from a report issued by the Consumer Financial Protection Bureau found that deposit advance products had many of the same terms and conditions as payday loans offered through storefronts or online.  A CFA analysis of one deposit advance program found consumers were charged the equivalent of 391 percent APR for a seven day loan and that the bank did not consider the borrower’s income and expenses when extending credit.

The withdrawal of the products came after a November 2013 guidance issued by the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency requiring strong new consumer protections designed to limit the safety and soundness risks posed by deposit advance products.  The Federal Reserve, which regulates Regions Bank and Fifth Third Bank, expressed concern about deposit advance products in a letter to the institutions it supervises but did not join the FDIC and OCC

guidance.

CFA Issues Data Breach Consumer Protection Tips

In the wake of massive data breaches at Target and Neiman Marcus data breaches, CFA issued advice for consumers on how to protect themselves.  “In this era of ‘Big Data,’ with an ever-increasing amount of information about individuals being amassed, there needs to be a stronger focus on data practices,” said CFA Director of Consumer Protection Susan Grant.

CFA recommends that consumers who used their credit or debit cards at Target stores between November 27 and December 15, 2013 contact their card issuers to check for unauthorized transactions and ask for new account numbers. Though consumers have limited liability for unauthorized charges and debits, dealing with fraud after the fact can be a hassle, Grant said.

Target customers should also be on the alert for “phishing” attacks, Grant warned. This is when fraudsters pose as someone else that consumers may trust – in this case they might claim to be from Target, consumers’ card issuers, an ID theft protection service, or a government agency investigating the breach – and ask for their personal information or direct them to click on something that plants malware in their computers or smartphones in order to steal their personal information.  “If consumers get calls, letters, text messages or emails from anyone about the Target breach and asking for their personal information or directing them to do something, they should be very cautious,” Grant warned.

Report Explores Potential Benefits and Pitfalls of Internet Disclosure

With the financial services industry increasing relying on the Internet to deliver information to investors, CFA has released a new report examining whether delivery over the Internet has the potential to improve the effectiveness of disclosures.   CFA has distributed the report to federal and state securities regulators, members of the Senate Banking Committee and House Financial Services Committee, industry leaders and investor advocates.

“We are at an important point in the transition to a largely Internet-based disclosure system,” said CFA Director of Investor Protection and report author Barbara Roper.  “The decisions we make today will largely determine whether electronic delivery realizes its potential to improve the timing, accessibility, and format of financial disclosures.  Do “it right and we could increase the likelihood that investors will read and understand the disclosures they receive.  Do it wrong, and we could worsen an already dysfunctional disclosure system.”

Supported by funding from the Financial Industry Regulatory Authority, the report examines the potential benefits and pitfalls of Internet disclosure, the conditions necessary for effective Internet disclosure, barriers to disclosure effectiveness, and how Internet delivery could be used to reduce those barriers.  It was based on an extensive literature review, surveys of both investors and financial professionals, interviews with experts, and a review of a sample of industry websites.

“This report is just the first step in what we hope will be a broader examination of this issue,” Roper said.  “We hope to dig deeper in coming months into the policy implications of our findings.”