Judge Denies Injunction Seeking to Halt COOL Implementation

Food safety advocates won an important initial victory last week in their efforts to defend country-of-origin labeling (COOL) rules, when a U.S. District Court judge issued a ruling denying a request for a preliminary injunction to prevent implementation of the rules until the lawsuit is concluded.

The preliminary injunction request came as part of a lawsuit by the American Meat Institute, the National Cattlemen’s Beef Association and others in the meat industry, claiming revised rules go beyond the law and raises commercial free speech concerns.  CFA joined with National Farmers Union, the U.S. Cattleman’s Association, and the American Sheep Industry Association to intervene in the lawsuit in order to defend the regulations and ensure that consumer and producer concerns are given full consideration.

“CFA was pleased that the court found that the plaintiffs were not likely to succeed on the merits of their claims,” said Chris Waldrop, director of CFA’s Food Policy Institute. “We welcome the judge’s decision to deny the preliminary injunction motion.”

The rules are scheduled to take effect in November.  The plaintiffs have filed a challenge to the ruling.

Insurance Regulators Urged to End Unfair “Price Optimization”

CFA has called upon state insurance commissioners to halt “price optimization,” a technique used by many large auto insurance companies to increase premiums on certain customers despite no increase in risk associated with those policy holders.  In the letter sent to state insurance commissioners last month, CFA Insurance Director J. Robert Hunter wrote: “Price optimization is nothing less than the rejection of actuarial standards for the sake of increased profits and at the expense of unwitting policyholders. We request any information you are able to provide on the use of price optimization in your state and, if in use, the steps you are taking to end this practice, which produces unfairly discriminatory auto insurance premiums, illegal in every state.”

Under price optimization, once premiums are established using risk-based ratemaking methods, the prices are adjusted within rating segments based on such factors as market conditions for that segment. If a segment of the population is unlikely to switch companies if prices go up more, the prices are raised to the “optimum” level for that group. Thus, two policyholders with identical risks as determined by cost-based methods would pay different prices for the same policy.

“It’s the law of the land that you must buy auto insurance,” Hunter stated in a press release issued at the time the letter was sent.  “Those who don’t buy it risk getting fined, losing their car or even serving jail time in some states.  With “price optimization” insurance companies exploit the law by demanding higher prices from customers required to buy their product. But they’re not only exploiting the law, they’re also breaking it.”

Groups Push for Privacy Protections, Information in CFPB Complaint Database

Privacy, consumer, and civil rights groups called on the Consumer Financial Protection Bureau to include complaint narratives in the agency’s public complaints database while also protecting consumer personal data in a recent letter to CFPB Director Richard Cordray.

Currently, the CFPB collects consumer complaints to understand how consumers are treated in the marketplace and identify trends and potential violations associated with common financial products and practices.  This data is available on the Bureau’s data portal and provides consumers with the necessary tools to make informed decisions about their current or prospective financial services provider.  However, complaint narratives and protected class status are omitted from the data portal.  Without this information it may be difficult to understand the nature of the complaint or detect patterns of discrimination.

“We recommend that collected protected class information be included in the consumer complaints database so that regulators, researchers and consumers have the opportunity to evaluate whether there are patterns of discrimination and abuse,” the group wrote. “Just as the CFPB requires data for effective rulemakings, consumers too require detailed data to make informed financial decisions.”

The letter offered recommendations to improve the data portal and include more details about the nature of the complaint while protecting individual privacy, including:

• making public sharing of complaint narratives voluntary;
• using search algorithms to diminish the possibility of accidental disclosure of personal data;
• including narrative information to allow analysis by company, complaint type, ZIP code (with 10,000 or more residents), and other fields of interest to the public, researchers and regulators; and
• encouraging complainants to voluntarily provide protected class data to assist regulators, researchers and the public in detecting and rooting out discriminatory practices.

“Better information means better decision making,” said CFA Director of Financial Services Tom Feltner. “Empowering consumers with the information to make smart choices will ultimately mean fewer complaints and better complaint resolution.”

Used Car Buyers to Get EPA Mileage Information

In a move that should dramatically change used car buying, the U.S. Environmental Protection Agency (EPA) announced last week that it is making available new labels featuring EPA fuel economy estimates and CO₂ estimates for used vehicles sold in the U.S. since 1984. Car dealers and consumers can either download an electronic graphic that can be used in online sales, or they can download a printed version and affix to the vehicle window.

“Providing gas mileage information to consumers will be a giant step forward in protecting American pocketbooks, addressing the nation’s dependence on oil, and reducing pollution,” said CFA Public Affairs Director Jack Gillis in press statement released last week.

The new labeling tool is currently being offered to dealers as an optional resource, but that could change if dealers fail to adopt this easy-to-use consumer information program.

“Used car dealers are being given the chance to jump on one of the most important rating programs available,” Gillis said. “If they fail to provide their customers with this easy-to-access information, the Consumer Federation of America will push hard to mandate the labels on every used car.”

CPSC Urged to Strengthen Protections Regarding Strollers, Bed Rails

In two separate comment letters filed with the Consumer Product Safety Commission last month, CFA is urging the CPSC to strengthen safety standards for children’s carriages and strollers and to either strengthen safety standards for or ban adult bed rails.

The CPSC has proposed rules required by the Consumer Product Safety Improvement Act to set mandatory safety standards for carriages and strollers.  The CPSC has developed a rule proposal that is based on, but includes improvements to, the existing voluntary standard.  Noting that strollers and carriages are almost universal products that parents rely on to safely contain a squirming toddler as well as a resting infant, CFA and Kids in Danger submitted a joint comment letter supporting the changes CPSC has proposed to strengthen the existing voluntary standard and calling for additional improvements.

Specifically, the groups call for the addition of a durability test to ensure that strollers are durable enough to withstand expected use over the lifetime of the product.  They also called on the agency: to consider whether additional tests may be needed, citing in particular those used by Consumers Union as part of its stroller testing procedures; to strengthen the warning not to leave children unattended in order to specifically call attention to the suffocation and entrapment risk; and add a marking on products sold after the new standard’s effective date so that consumers may more easily identify those that comply with the new standard.

“The promulgation of a mandatory safety standard for strollers is critically important to the safety of every infant and child who has been placed in one. The final standard should be robust and should take into account real world use of the product,” said CFA Legislative Director Rachel Weintraub.

CFA also submitted a separate comment letter urging the Commission “to take strong action to protect consumers from the hazards posed by adult bed rails by promulgating mandatory standards that effectively address the hazard or by banning the product.”  The agency is taking comments in response to a petition filed earlier this year by CFA, the National Consumer Voice for Quality Long-Term Care, bed rail activist Gloria Black, and 60 other organizations requesting a ban of adult portable bed rails or mandatory standards if a ban is not accepted.

The letter notes that CPSC has long been aware of the risks associated with the product, that the current voluntary standard is inadequate, that existing marketing often makes unsupported claims that the products improve safety, and that warnings are needed of the suffocation and entrapment risk.  ““Too many people have been seriously injured or killed while using adult bed rails,” stated Rachel Weintraub, Legislative Director and Senior Counsel with Consumer Federation of America.  “These asphyxiation and entrapment deaths and injuries have not been adequately prevented by any voluntary efforts by bed rail manufacturers.  These incidents should have been prevented by strong federal efforts, which we have petitioned the CPSC to take.”