CFA News

CFAnews Update – May 24, 2017

Senate Committee Passes Bills to Undermine Regulatory Process

Over strong opposition from a wide range of public interest groups, the Senate Homeland Security and Governmental Affairs Committee passed several bills last week that would make it more difficult for federal agencies to adopt pro-consumer regulations. Two of the bills – the Midnight Rules Relief Act (S. 34) and the Regulations in Need of Scrutiny Act or “REINS Act” (S. 21) – passed on straight party line votes, while the Regulatory Accountability Act (S. 951) drew one Democratic vote in support.

The Regulatory Accountability Act would handcuff all federal agencies in their efforts to protect consumers from health and safety as well as pocketbook threats, CFA warned in a letter urging opposition to the bill. “It prioritizes regulatory costs over regulatory effectiveness, adds burdensome new analytical requirements, and makes the rulemaking process more adversarial, favoring those powerful special interest groups with the resources to make the system work to their benefit,” the letter states.

Of particular concern are provisions: requiring agencies to adopt the most “cost effective” approach when issuing “major” or “high impact” regulations, a standard that is undefined and likely to be the subject of legal challenge; imposing dozens of new analytical and procedural requirements that agencies must adhere to before issuing new safeguards; requiring adversarial hearing procedures or “formal rulemaking” for the most significant rules; and politicizing the rulemaking of independent agencies by subjecting their actions to review by the White House’s Office of Information and Regulatory Affairs (OIRA). In short, “the RAA would create more opportunities for those opposed to consumer protections to intervene, delay, or thwart the rulemaking process by providing more opportunities to sue the agency,” said CFA Legislative Director Rachel Weintraub.

The Midnight Rules Relief Act and the REINS Act would also undercut the ability of federal agencies to protect consumers from unsafe food, predatory financial products and schemes, and dangerous consumer products.

The REINS Act would do so by requiring any agency that issues a rule with an economic impact of $100 million or more to obtain approval from both Houses of Congress of the entire rule without changes, within 70 legislative days of the rule being received by Congress. Because special interest groups would merely have to bottle up a rule in one house of Congress for a short period of time to keep it from being enacted, “this hurdle would be virtually impossible for important consumer protection rules to overcome,” CFA wrote in a letter urging opposition to the bill.  “Congress already has numerous methods for holding agencies accountable for their actions,” the letter adds. “The REINS Act would further delay the rulemaking process, waste federal resources, minimize the ability of federal agencies to do their jobs to protect the public and ultimately harm American consumers.”

The Midnight Rules Relief Act would amend the Congressional Review Act to allow disapproval all at once of a number of regulations finalized near the end of presidential terms. “In one sweeping measure, Congress could usurp the expertise, knowledge, and deliberative process of many agencies to entirely stop sensible safeguards that Americans expect and depend upon to keep their families safe and secure, their privacy protected, and their financial services fair and transparent,” CFA wrote in a letter urging opposition to the bill. “Ironically, this bill would enable Congress to use a rushed, non-deliberative process to upend critical necessary protections.”

“These bills are the antithesis of what American consumers want, need and expect from our government,” Weintraub stated. “We will be working to ensure that every Senator is aware of the problems these bills pose and urge opposition.”

FCC Considers Proposal to Permit Nuisance Voicemails

All About the Message, LLC has petitioned the Federal Communications Commission (FCC) to exempt the use of ringless voicemail technology from the Telephone Consumer Protection Act (TCPA), which prohibits most unwanted calls and texts to cell phones. National and state consumer and legal aid organizations wrote to the agency last week urging it to reject the request.

“The new technology enables telemarketers and debt collectors to flood unwanted messages directly into a consumers’ cell phone voice mailbox,” the groups warned in a press statement. “Under the TCPA, non-emergency calls or texts to cell phones are barred without consent and consumers are allowed to register their numbers on the nationwide do-not-call list so they do not receive telemarketing calls.”

The technology at issue—called ringless voicemail (RVM)—works to deliver deliberately targeted, pre-recorded telemarketing and debt collection voice messages en masse to the voicemail boxes of cellular subscribers.

“This technology is essentially a perverted use of the standard voicemail system,” said CFA’s Director of Consumer Protection and Privacy Susan Grant. “It delivers a pre-recorded message without ever giving the consumer the opportunity to answer—or to block—the incoming call.”

More than a dozen groups filed a comment letter urging the FCC to protect consumers from voicemail messages that they argued are just as invasive, expensive, and annoying as calls and texts to cell phones. “If left unregulated by the TCPA, telemarketing and debt collection messages could easily overwhelm the voicemail boxes of consumers,” the groups wrote.

CFA Urges FDA to Ensure Safety of Food Imports

CFA is urging the Food and Drug Administration (FDA) to ensure the safety of food imports via robust Foreign Supplier Verification Program (FSVP) requirements for all importers, as well as by maintaining transparency for whatever “systems recognition” process FDA undertakes. In a comment letter responding to FDA’s recent public hearing on “Strategic Partnerships to Enhance the Safety of Imported Foods,” CFA Food Policy Director Thomas Gremillion noted that the need for adequate controls to ensure the safety of food imports has grown with the proportion of imported food in American diets.

CFA previously filed comments with FDA urging the agency to adopt best practices for assuring the safety of the food supply chain by mandating that food importers implement and maintain a FSVP, regardless of the source of the imported food. However, in its final FSVP rule, FDA indicated that it will exempt importers from many FSVP requirements as they apply to foreign suppliers from countries with a “comparable or equivalent food safety system.”

“As we noted in our previous comments, this determination does not signify that the ‘comparable’ jurisdiction is inspecting each supplier on a regular basis, or as frequently as FDA is required to inspect facilities, and it is a far cry from the requirements of annual checks on foreign suppliers that FDA first proposed,” noted Gremillion. “In light of these exemptions, however, FDA should reserve recognition of ‘comparable or equivalent food safety systems’ to those instances where foreign governments satisfy a rigorous and open process that is responsive to public concerns.”

The letter recommends that FDA consider soliciting public comment prior to making food safety “systems recognition” determinations, as well as fully disclosing how it intends to rely on “systems recognition” and other comparability assessments in regulating food imports.

“Managing food safety is about managing risk, and we support FDA’s efforts to optimize how it uses its limited inspection resources to reduce risk. A cornerstone of any strategy to make FDA more efficient, however, should be transparency,” concluded Gremillion. “A more transparent food system is a safer food system, in part because more transparent public policymaking harnesses more information from a broader range of stakeholders.”

Bill Would Prevent CFPB from Reining in Unfair Debt Collect Practices

Legislation has been introduced in the House that would prevent the Consumer Financial Protection Bureau (CFPB) from enforcing consumer protections against unfair debt collection practices by attorneys and law firms. H.R. 1849, the Practice of Law Technical Clarification Act of 2017, would exempt attorneys operating as debt collectors from complying with the Fair Debt Collection Practices Act (FDCPA).

In a letter to members of the House Financial Services Committee, CFA joined with dozens of other public interest groups to express opposition to H.R. 1849 on the grounds that consumers, especially people who have recently lost jobs, had a death in the family, or suffered another type of devastating personal loss, would lose essential protections against abusive and deceptive debt collection practices if it were adopted.

The letter points out that Americans file more consumer complaints with state and federal officials about debt collectors than any other industry. Recent enforcement actions by federal agencies have highlighted numerous and widespread abusive and deceptive practices by collection law firms and attorneys.

“H.R. 1849 would turn back the clock on this important protection for struggling families by exempting attorney conduct from the consumer protections provided by the FDCPA,” states the letter. “This bill would eliminate Consumer Financial Protection Bureau enforcement actions against law firms and attorneys. Your constituents would be harmed by this change in the law.”