CFA News

CFAnews Update – November 22, 2016

Congress Urged to Pass a Clean Omnibus, Free of Harmful Riders

CFA has joined a coalition of 260 organizations calling on President Obama and members of Congress to oppose any FY 2017 funding bills that include harmful policy riders. “Riders that undermine critical consumer protections should not be included in Appropriation bills,” said CFA Legislative Director Rachel Weintraub.

“Budget bills have been used before to undermine essential safeguards through policy riders – provisions that address extraneous policy issues, and are slipped into funding bills to win approval as part of must-pass funding legislation,” the groups wrote. Policy riders attack regulations that Americans support, they added, such as policies to restrain Wall Street abuses, to ensure safe and healthy food and products, and to prevent consumer rip-offs and corporate wrongdoing.

In order to preserve these regulations, the groups urged members of Congress “to oppose flawed funding proposals that include policy riders and to finish this budget this year,” and they urged the Administration “to oppose any funding bills that have such riders before signing any final FY17 funding package.”


Coalition Opposes Midnight Rules Relief Act of 2016

Legislation (H.R. 2982, the Midnight Rules Relief Act) has been introduced in the House of Representatives to amend the Congressional Review Act to allow Congress to allow en bloc disapproval of all regulations finalized near the end of presidential terms. CFA joined with a large coalition of consumer, small business, labor, good government, financial protection, community, health, environmental, civil rights and public interest groups in writing to members of Congress this week urging opposition to the bill.

“This bill would jeopardize public protections affecting public health, safety, and the environment that often are years, if not decades, in the making,” the groups wrote. “The proposed legislation is based on a flawed premise—namely, that regulations which are being finalized during the so-called “midnight” rulemaking period are rushed and inadequately vetted.”

“In fact, the opposite is generally the case,” they added. “There are currently dozens of public health and safety regulations that have been in the regulatory process for years or decades, including many that date from the Obama Administration’s first term or that implement laws passed in the first term. Some even predate this Administration entirely. In addition, many of these regulations are mandated by Congress and have missed rulemaking deadlines prescribed by Congress. Referring to regulations that have been under consideration by federal agencies for years, and in some instances decades, as “rushed” is misleading and inaccurate.”

The groups listed examples of long-delayed but now finalized public protections that could be blocked by H.R. 5982:

  • Department of Labor’s overtime standard enables workers to be compensated fairly for all of the hours they actually work.
  • Department of Labor’s conflict of interest rule protects retirement savers from so-called “financial advisors” who use a myriad of tricks to profit at their customers’ expense.
  • Food and Drug Administration’s Nutrition Facts label rule on added sugar will help protect Americans’ health.
  • Environmental Protection Agency’s truck greenhouse gas emissions rule will make tomorrow’s trucks run cleaner and go farther on a gallon of fuel.

“The regulatory process is deliberative. Consumer protections are necessary and desired by the American public. Rolling back necessary consumer protections based on the false idea that these protections were rushed is problematic,” said CFA Legislative Director and General Counsel Rachel Weintraub.


CFA Questions FDA’s Classification of Animal Drugs

As the Food and Drug Administration (FDA) works to finalize a rule that would modify how the agency categorizes animal drugs used in medicated feeds, CFA wrote to the FDA earlier this month urging the agency to adopt a risk-based means of assessing which drugs may be sold for use in medicated feed by unlicensed feed mills. As it stands, FDA’s categories for animal drugs in medicated feed are arbitrary, CFA argued.

FDA purportedly categorizes drugs based upon the likelihood that they will produce unsafe residues in the edible products of treated animals. CFA pointed out that the categorization fails to advance that risk management objective, and omits consideration of another critical risk: development of bacteria resistant to medically important drugs. In order to mitigate the risk posed by antibiotic resistance, CFA called on FDA to incorporate the methodology in its guidelines for assessing resistance risk in new animal drugs. That methodology asks whether use of a new drug is likely to lead to an animal’s harboring resistant bacteria, whether humans are likely to ingest that bacteria from “the relevant food commodity,” and whether human exposure to the resistant bacteria is likely to result in adverse health consequences.

Whatever the ultimate form the risk assessment takes, CFA argued, it should deemphasize drugs’ lowest approved use levels. “Continuing to focus on lowest approved use creates a perverse incentive for drug manufacturers to market drugs for use among large groups of animals at longer durations, contributing to a higher risk of antibiotic resistant bacteria,” said Thomas Gremillion, Director of CFA’s Food Policy Institute. “To better protect consumers from drug residues, FDA should develop a risk assessment scheme that more directly takes exposure risk into account.”


Oklahoma Senate Committee Looks Into Auto Insurance Affordability

Testifying at a hearing before an Oklahoma state Senate Committee on personal credit and car insurance premiums, CFA Director of Financial Services Tom Feltner testified against using credit scores, and other non-driving factors, in setting auto insurance premiums.

“Insurers argue that credit scores are correlated with claims frequency – the lower the credit score, the more frequent the claims – and can serve as a useful factor in their pricing of auto insurance policies,” said Feltner. “We reject this assumption since, even if there were a correlation between credit scores and claims, there is no plausible explanation as to why this is the case and having an explanation is central to classifying risk in a fair and responsible manner.”

CFA reports which have looked into non-driving rating factors used in credit scores have found that lower- and moderate-income drivers pay substantially more for basic auto insurance than upper-income drivers, even when everything else (such as address, driving record, type of car, etc) is held constant, Feltner noted.

“Auto insurance premiums should signal to drivers that if they drive safely they will pay less,” Feltner said. “But right now, in Oklahoma, if you want to lower your auto insurance premium by hundreds of dollars, insurance companies are saying loud and clear that you should go back to college, get married, get a new job and fix errors on your credit report or pay off your outstanding medical debts. Those may be great ideas, but your ability to afford auto insurance and comply with state law should not depend on them.”