Senate Approves Anti-Consumer Bank Deregulation Bill

The Senate voted 67-31 to approve a bipartisan bill – S. 2155, the “Economic Growth, Regulatory Relief, and Consumer Protection Act” – which rolls back important consumer protections and repeals or weakens a number of achievements in the Dodd-Frank Act. CFA sent a letter urging Senators to oppose the bill.

“The bill removes critical authority from regulatory agencies and entrusts more of the nation’s financial wellbeing to financial institutions, which have shown time and time again they are incapable of self-monitoring and self-policing. As such, it opens the door to a renewed round of financial crises that have in recent years been the real culprits in slowing growth and harming consumers,” said CFA’s Legislative Director Rachel Weintraub. “This bill could increase harm to consumers and investors and foster instability in the financial marketplace.”

While there are numerous concerns with the bill, CFA focused primarily on Title I of S.2155, which includes provisions:

• Granting blanket “qualified mortgage” safe harbor protection, with a reduced set of consumer protections, for mortgage loans originated and held in portfolio by depository institutions with $10 billion or less in assets;
• Undermining standards for securities that are exempt from state oversight;
• Preempting states’ protections for consumers who have suffered from credit report fraud or breaches;
• Exempting institutions that originate fewer than 500 mortgage loans and 500 open-ended credit lines from Home Mortgage Disclosure Act (HMDA) data requirements used to identify lending discrimination; and
• Allowing lenders to waive appraisal requirements for purchases under $400,000 if they have been unable to obtain one by the time of closing.

The legislation now goes to the House, where Financial Services Committee Chairman Jeb Hensarling (R-TX) has indicated he plans to add more deregulatory provisions to the bill.

“This bill undermines consumer protections and puts our financial marketplace in greater risk,” said Weintraub.

Organizations Throughout the U.S. Support America and Military Saves Week

More than 2,000 organizations from across the United States, and military installations around the world, participated in the eleventh annual America and Military Saves Week (February 26- March 2, 2018) with actions designed to promote good savings behavior and encourage individuals to assess their own saving status.

“The secret to saving successfully is surprisingly simple,” said Madeline Daniels, spokesperson for America Saves, in a press statement. “People with a plan to save are twice as likely to save successfully. Whether you are saving for a rainy day, your retirement, education, or another goal, America Saves Week is the perfect opportunity to set your savings goal, make a plan, and learn how to save the most effective way—automatically.”

Military Saves, an America Saves campaign and partner of the U.S. Department of Defense’s Financial Readiness Campaign, coordinates the Military Saves Week component of America Saves Week. As part of Military Saves Week, 637 military installations and military-affiliated organizations engaged in activities to encourage U.S. service members and their families to set a savings goal, make a savings plan, and save automatically.

“Military Saves Week is the perfect opportunity for service members and their families to hit the pause button on their busy lives, assess their savings status and take action, which is critical to their financial readiness,” said Alecia Blair, director of Military Saves. “And financial readiness is key to the mission readiness of service members and the resiliency of military families.”

Thanks to record-breaking participation in America Saves Week 2018, nearly 10,000 individuals have already taken the America Saves Pledge or repledged to save money in 2018, a 150 increase from 2017’s first quarter. Meanwhile, more than 20,000 service members and their family members have taken the Military Saves pledge or repledged. Over 4,800 of those pledges come from the popular America Saves Week #ImSavingForSweepstakes, where savers can enter to win up to $750 toward their savings goal.

Some Major Auto Insurers Provide No Discount to Low-Mileage Drivers

Most drivers are not offered significant price breaks on their auto insurance for cutting down on their driving, according to a CFA report released last month.  In the 11 cities tested outside of California, the nation’s largest auto insurers generally offered little or no premium reduction to low-mileage drivers compared with high-mileage drivers, even though insurance research indicates that how much you drive is among the most important factors in predicting accidents.

After reviewing 275 quotes for basic liability coverage from five large insurers, CFA found:

• Consumers save only $30 per year, or 1.6 percent, on average for every 5,000 fewer miles driven annually, excluding California drivers, who save $81 on average, or 8.7 percent.
• Outside of California, premiums for very low-mileage drivers (2,500 miles/year) are only $102 lower, on average, than very high-mileage drivers (22,500 miles/year), a savings of about 6 percent annually. (Excludes Allstate in Tampa, where minimum coverage quote was not provided.)
• In Los Angeles, very low-mileage drivers save $346, or 30 percent, compared to very high-mileage drivers.
• Outside of California, Farmers and Progressive provide no mileage-based savings in tested cities, Geico offers a small price reduction, while Allstate’s and State Farm’s lowest-mileage customers saw average savings of 11 percent and 13 percent respectively compared with the highest-mileage drivers.

“How well you drive and how much you drive should be the primary factors considered when insurance companies set premiums, but we have found that many companies either entirely ignore their customers’ actual mileage or give such a pittance for low-mileage as to have no meaningful impact on rates,” said CFA’s Director of Insurance J. Robert Hunter.

“For people in most parts of the country, with California as the notable exception, you’ll often pay about the same auto insurance premium whether you commute 90 miles round trip every day or take public transit to work and only drive on the weekends,” Hunter added. “If you drive less, you should pay less, because you can’t crash when you’re not driving.”

USDA Plan on Poultry Plant Line Speeds Puts Public Health at Risk

USDA’s Food Safety and Inspection Service has issued a list of criteria that it plans to use to issue “new technology waivers” that raise line speed caps for some poultry slaughterhouses. The Safe Food Coalition, a coalition of consumer and public health organizations coordinated by CFA, criticized the USDA’s plan for putting public health at risk.

Pursuant to a 2014 rulemaking, the agency currently allows 20 plants operating under USDA’s “New Poultry Inspection System” to operate at up to 175 birds per minute (bpm). Other plants, regardless of the inspection system, cannot exceed 140 bpm. Now, however, USDA will allow additional plants to operate at 175 bpm, if they can meet the announced criteria.

Consumer advocates and other members of the public did not have an opportunity to provide input on the criteria, which offer little, if any, additional protections for food safety. Advocates noted that USDA’s announcement represents a stark contrast from the notice and comment rulemaking that established the underlying line speed restrictions, and raises questions concerning USDA’s compliance with the Administrative Procedure Act.

According to USDA, only facilities operating under the “New Poultry Inspection System” for at least a year are eligible for line speed waivers, but the available data fails to show that that system actually improves food safety outcomes compared to traditional inspection.

The criteria exclude “Category 3” facilities that have failed to meet Salmonella and Campylobacter performance standards, but not borderline “Category 2” facilities. And while USDA claims that it will revoke the waivers of “establishments consistently unable to maintain process control at line speeds higher than 140 bpm,” it fails to explain exactly what it means to “maintain process control.”

The announcement promises “additional information on this issue in a notice in the Federal Register in the future,” but the agency has indicated that it will begin processing waiver applications immediately. USDA alone will determine whether a facility’s application meets the criteria.

Top Food Regulators Spoke at National Food Policy Conference

Acting Deputy Under Secretary for Food Safety Carmen Rottenberg, and USDA Commissioner Dr. Scott Gottlieb delivered the keynote address at this week’s 41^st Annual National Food Policy Conference, held March 28 and 29^th in Washington, D.C. Former U.S. Secretary of Agriculture Dan Glickman, and Dr. Darius Mozaffarian, the Dean of the Friedman School of Nutrition Science and Policy at Tufts University also spoke during conference. The event explored the regulatory and communication challenges posed by scientific innovations in the food sector and examined the latest proposals to shape federal food assistance and agriculture programs.