House Passes Three Critical Product Safety Bills

Last week, the House gave voice vote approval to three important consumer product safety bills strongly supported by CFA and consumer organizations. “We applaud the U.S. House of Representatives for voting to put children and consumer safety first. Children will be safer because the STURDY Act will require strong standards to prevent furniture tip-overs and the tragedies tip-overs case,” stated Rachel Weintraub, Legislative Director and General Counsel of Consumer Federation of America. “Passage of the Nicholas and Zachary Burt Carbon Monoxide Poisoning Prevention Act and the Portable Fuel Container Safety Act are significant and will provide carbon monoxide alarms to consumers who need them and will strengthen the standard for portable fuel devices by requiring devices that will address ignition of flammable liquid.”

The bills that passed are:

• The STURDY Act (R. 2211), sponsored by Rep. Jan Schakowsky (D-IL), would direct the U.S. Consumer Product Safety Commission (CPSC) to create a mandatory clothing storage unit standard to help prevent furniture tip-overs, which have caused numerous child injuries and deaths. This critically important bill would establish a strong mandatory standard for furniture stability.
• The Nicholas and Zachary Burt Carbon Monoxide Poisoning Prevention Act of 2019 (R. 1618), sponsored by Rep. Ann Kuster (D-NH), would establish a grant program, administered by the CPSC, that would encourage states to require the installation of residential carbon monoxide detectors, including for vulnerable populations. According to the Centers for Disease Control and Prevention (CDC), 2,244 individuals died from unintentional carbon monoxide poisoning between 2010 and 2015, with 393 deaths in 2015 alone.
• The Portable Fuel Container Safety Act of 2019 (R. 806), sponsored by Rep. Mike Thompson (D-CA), would help prevent flame-jetting incidents by establishing a binding and enforceable standard that would require flame mitigation devices, or flame arrestors, on portable fuel containers. According to National Fire Protection Association estimates, fire departments responded to an average of 160,910 fires per year between 2007 and 2011 that started with ignition of a flammable or combustible liquid, resulting in an estimated 454 civilian deaths.

“We urge the Senate to quickly pass these bills to protect children from these preventable hazards,” concluded Rachel Weintraub.

 House Votes to Pass the FAIR Act, Ban Forced Arbitration

In an important step forward for efforts to ban the use of forced arbitration clauses in of consumer, investor, and employee contracts, the House of Representative passed the FAIR Act (H.R. 1423) last week on a 225-186 vote. Consumer advocates at CFA heralded the passage as an essential first step in protecting consumers, workers, investors, and small businesses against corporate takeover of the judicial system, stating that the “passage of the FAIR Act is an essential step forward in preventing companies from restricting the legal rights of consumers though forced arbitration clauses.”

Forced arbitration consistently advantages companies and prevents wronged consumers from having access to justice. These clauses are confusing – often written in legal jargon or hidden in the fine print of contracts so that many consumers are unaware of their impact. They are also pervasive – over the past decade, forced arbitration clauses have made their way into a vast array of consumer contracts – including cell phone contracts, car loans, investment accounts, employment, and many consumer financial products including nearly half of all checking accounts.

“The public should not lose access to the courts their taxes pay for because of fine print contract clauses that no one reads. The Senate should immediately approve the FAIR Act,” stated Chris Peterson, CFA Director of Financial Services.

“Passage of the FAIR Act is also a win for investors. Currently, investors are forced into arbitration when they have a dispute with their brokers, where the deck is often stacked against them. In addition, there’s a new campaign to allow corporations to force shareholders into arbitration in order to immunize company management from being held accountable for fraud. The FAIR Act would ensure that investors get the choice to take their brokers and corporate wrongdoers to court, where investors have a fighting chance,” stated CFA Financial Services Counsel Micah Hauptman.

“Americans deserve their day in court, but when companies force consumers into signing away their rights, the chances of a fair outcome diminish drastically. We thank the House for taking this important step in eliminating these clauses from contracts for products consumers use every day including credit cards and checking accounts. We now need the Senate to act to protect consumers,” stated Leandra English, CFA Director of Financial Services Advocacy and Outreach.

Consumer advocates are now calling on the Senate to take up the measure and support its passage into law.

Consumer Groups Call for Consistent, Workable CRA Rules

With government agencies eyeing the modernization of the Community Reinvestment Act (CRA), CFA and 27 other consumer groups submitted a comment letter earlier this month voicing their concerns and views regarding how the act should be modernized. The letter was sent to the Chairman of the Federal Reserve Board of Governors, the Comptroller of the Currency; and the Chairman of the Federal Deposit Insurance Corporation.

In its distinguished 42 year-long history, the CRA has successfully encouraged banks to serve communities-of-need, influenced where and how mortgages and loans are made, and how banks and communities work together, the groups noted. A properly designed regulatory framework will serve both communities and banks well for the next decade or longer, they added, while a fragmented and poorly designed framework would be disruptive to banks and communities and would likely be revisited after only a short time.

In their letter, the consumer groups stressed the importance of having the three prudential banking agencies issue uniform CRA regulations and adopting metrics for CRA activity that are workable, flexible, robust, and address community needs.

While the letter highlighted a number of concerns regarding the effort to modernize the CRA, the groups also said the effort “is worth doing right, even if it requires compromise among the agencies and takes longer than many of us would wish. We look forward to working with all of you to make this potentially historic initiative a success for banks, advocates, regulators and most importantly, the communities that we all serve.”

Google/YouTube and FTC Reach Settlement; Consumer Advocates say it Lacks Teeth

Google and its subsidiary YouTube reached a $170 million settlement with the Federal Trade Commission (FTC) earlier this month, settling allegations that YouTube illegally collected personal information from children without their parents’ consent, a clear violation of the Children’s Online Privacy Prevention Act (COPPA). While the settlement is the largest penalty obtained in a COPPA case since the law was enacted by Congress in 1998, consumer advocates criticized it as far too weak.

CFA Director of Consumer Protection and Privacy Susan Grant highlighted some of the chief concerns with the settlement, stating that: “Google not only failed to prevent behavioral marketing to children on YouTube… but actively discouraged content creators from turning off behavioral advertising because it would result in less revenue for them… YouTube’s ad revenues in the U.S. alone are estimated at nearly $4 billion last year, making the $170 million fine in this case simply a cost of doing business, not an effective deterrent.”

“Even more disturbing, while Google and YouTube have agreed to require content creators to designate videos they wish to upload as child-directed or not, and not to serve behavioral advertising or track persistent identifiers for videos that are designated as child-directed, Google and YouTube are not required to actually police their platform to ensure that appropriate designations are actually being made,” Grant added. “It’s like having a school playground with no one responsible for watching the kids and making sure the equipment is safe.”

DOE Rollback of Light Bulb Standard will Cost Consumers Over $14 Billion

The U.S. Department of Energy (DOE) issued a final rule earlier this month that rolls back lighting efficiency standards adopted in January 2017 which were to take effect in January 2020.  CFA and the National Consumer Law Center opposed the proposal and warned that the ill-conceived action would cause consumers to spend billions of dollars unnecessarily in energy costs.

“The rollback of energy efficiency requirements for several light bulb types, such as 3-way bulbs and reflector bulbs, will cost consumers $14 billion cumulatively or $115 annually per household by 2025,” said CFA Director of Energy Programs, Mel Hall-Crawford. This added cost will hit low income households especially hard, the groups warned.

In a comment submitted to DOE earlier this year, the groups highlighted three major reasons for their recommendation that the Department withdraw its proposed rule:

• The DOE’s proposal will rob consumers of substantial energy savings while the current definition of general service lamps (GSLs) will lower consumer’s electricity bills. In addition to the $14 billion in cumulative costs, there are also broader economic losses that will result from the rollback as commercial and industrial sectors pass their added costs on to the consumer.
• The public supports energy efficiency standards for light bulbs including the GSLs that were going to be covered on January 1, 2020. This support is bipartisan, with 67% of Republicans and 83% of Democrats supporting the expansion of the standards.
• The Department’s rule violates the law by running contrary to the “anti-backsliding” provision of the Energy Conservation Policy Act.

“Consumers have benefited enormously from appliance efficiency standards. Energy dollars saved – whether in the residential, commercial or industrial sectors – provide greater benefits elsewhere in our economy.  This rollback of the 2017 lighting standards is ill-conceived and misguided – it is another example of the Trump Administration’s assault on efficiency standards which results in consumers being unnecessarily robbed of savings on their energy bills,” concluded Hall-Crawford.