OCC Appears Poised to Weaken CRA Compliance Test

Changes to Community Reinvestment Act (CRA) regulations suggested by a recent Advance Notice of Proposed Rulemaking (ANPR) from the Office of Comptroller of the Currency (OCC) could reduce effective community investment by regulated lenders, CFA wrote in a comment letter last month.

CFA is among a number of consumer, civil rights, and business groups raising objections to suggestions in the ANPR that OCC may replace the current multi-factor test for CRA compliance, which incorporates quantitative and qualitative factors, with a so-called “one metric” test.  Under this approach, all of a lender’s loans, investments and services would be assigned a value and then compared to some single metric of lender capacity, such as total assets or deposits.  The resulting ratio would determine whether the lender would receive a high or low rating.

“Experience has shown that CRA investment involves a range of considerations,” CFA Director of Housing Policy Barry Zigas wrote. “Reducing their impact or importance to some series of numeric values and then relating them to some other numeric value would reduce rather than enhance CRA’s effectiveness.”

CFA made the following recommendations to ensure CRA remains effective:

1. Branches should continue to be a significant part of assessing lender CRA compliance. “Branches remain an important source of banking services, especially for [low and middle income (LMI)] households, even with the rapid advance of online banking.  While there is merit in reexamining how assessment areas should be defined, we strongly oppose removing branches from that consideration,” CFA wrote.
2. CRA exams should continue to give significant weight to comments and analyses from stakeholders, residents and advocates working in lenders’ assessment areas, because these sources have unique and important perspectives on the efficacy and importance of CRA investments.
3. CRA performance should continue to focus on service to LMI neighborhoods and residents.
4. Small dollar lending to LMI consumers should continue to be a factor in CRA ratings but, “Payday lending, car title loans, and similar forms of high-cost credit should never be treated as CRA-qualifying activity.”

“The CRA was enacted 1977 in response to undeniable evidence of redlining of low and moderate income and communities of color,” Zigas commented.  “The regulators responsible for implementing the law should not weaken its important functions in the name of modernization or regulatory simplification.”

Advocates Unite to Release Principles for Privacy Legislation

A coalition of 34 civil rights, consumer, and privacy organizations joined together last month to release public interest principles for privacy legislation, providing a framework to guide policymakers considering how to protect the privacy of all Americans effectively while also offering meaningful redress for privacy violations.

Irresponsible data practices lead to a broad range of harms, including discrimination in employment, housing, healthcare, and advertising, the groups noted in a joint statement announcing the principles. They also lead to data breaches and loss of individuals’ control over personal information. Existing enforcement mechanisms fail to hold data processors accountable and provide little-to-no relief for privacy violations.

“We need to move forward on data protection in the United States, from a default that allows companies to do what they want with Americans’ personal information as long as they don’t lie about it, to one in which their business practices are aligned with respect for privacy rights and the responsibility to keep people’s data secure,” said Susan Grant, CFA Director of Consumer Protection and Privacy.

The privacy principles outline four concepts that any meaningful data protection legislation should at a minimum incorporate:

• Privacy protections must be strong, meaningful, and comprehensive.
• Data practices must protect civil rights, prevent unlawful discrimination, and advance equal opportunity.
• Governments at all levels should play a role in protecting and enforcing privacy rights.
• Legislation should provide redress for privacy violations.

The privacy principles were released following Federal Trade Commission hearings about big data, competition, and privacy and in response to a request for comment from the National Telecommunications and Information Administration, “Developing the Administration’s Approach to Privacy.” The agency’s work to develop privacy policy recommendations for the Trump Administration is ongoing, as is the National Institute for Standards and Technology’s work to develop a privacy risk framework.

The groups urged members of Congress to pass privacy legislation that ensures fairness, prevents discrimination, advances equal opportunity, protects free expression, and facilitates trust between the public and companies that collect their personal data.

FDA Urged to Enhance Recall Transparency

The Food and Drug Administration (FDA) has issued draft guidance regarding when the agency will make lists of “retail consignees” of recalled foods—i.e. retail stores and restaurants that may have sold recalled foods—publicly available. The draft guidance is an improvement but falls short in important ways, according to comments submitted by CFA and other consumer and food safety groups.

The FDA’s failure to publish retail consignee lists in the past has resulted in consumers’ lacking critical information during recalls, according to the groups’ comments. In the summer of 2017, for example, four different brands of papayas were recalled in relation to an outbreak of Salmonella that caused over 250 infections in 25 states, with 79 hospitalizations and two deaths. The FDA posted the names of the papaya farms, brand names, and in some cases the codes on the bulk boxes received at grocery stores. Yet the agency did not provide information that would have been far more useful to consumers: the names of the stores that sold the recalled fruit.

“This guidance should help to avoid similar confusion related to future outbreaks linked to fresh produce,” said CFA Food Policy Director Thomas Gremillion, “since it specifically targets food that “is not easily identified as being subject to a recall from its retail packaging (or lack thereof).”

While the group’s comments commend the agency for taking a step forward, they are also critical. According to the groups, the draft guidance focuses on too narrow a range of foods, and fails to clearly identify when FDA will make retail consignee lists available during recalls, particularly for packaged foods and foods sold in restaurants. While the agency guidance pledges that FDA will “consider publicizing retail consignee lists” in all recall situations, it does not outline a clear rule for taking such action, saying only that it might post retail consignee lists if “the agency determined that providing such information would help prompt consumers who may have received or purchased such recalled food to consider whether they possess the recalled product.”

“Given what we know about how recalls are implemented, how often retailers fail to pull products off the shelves, and how long recalled products may sit in consumers’ pantries or freezers, a more comprehensive policy is warranted,” said Gremillion. “In its final guidance, FDA should commit to publishing a list of retail consignees for any recall that triggers a public warning.”

Appropriations Rider Would Disrupt FDA’s Oversight of Cell-Cultured Meat

As Congress returned after Thanksgiving break to finalize an end-of-year funding bill, CFA and the Center for Science in the Public Interest (CSPI) wrote to Congressional leaders in late November urging them to oppose an appropriations rider that would disrupt an agreement between the U.S. Department of Agriculture (USDA) and the Food and Drug Administration (FDA) to work collaboratively to oversee the safety of cell-cultured meat.

Section 736 of the House Agriculture Appropriations bill would require the USDA to “issue regulations prescribing the type and frequency of inspection required for the manufacture and processing” of meat and poultry products made through cell technology, often called cell-based or cultured meat. This directive would undermine recent regulatory cooperation agreements announced by the USDA and the FDA, CFA and CSPI wrote.

Specifically, under the announced agreement, the FDA will oversee the production of cell-based or cell cultured meat at the growing stage, while the USDA will oversee the products starting from the point of harvest. “This agreement draws on the strengths of both regulators by including the FDA’s expertise at reviewing novel and cell-culture technologies as well as the USDA’s experience regulating meat and poultry products from the point of harvest,” the groups noted in their letter.

According to the letter, Section 736 would not only disrupt this agreement, but could also result in a gap in the food safety framework for cell-based meat, given that FDA has greater expertise in biotechnology that would be particularly useful in controlling risks related to cell culture, including risks related to contamination and to the use of novel additives and ingredients.

“Simply put, while the USDA may retain responsibility for inspections and labeling, the FDA is best positioned to assess the safety of the inputs for novel food technologies. Given the recent progress within the Administration, the proposed House appropriations measure is unnecessary, and should be omitted in conference,” the groups concluded. 

CPSC Settlement with Britax Over Hazardous Strollers Endangers Consumers

The U.S. Consumer Product Safety Commission (CPSC) settled an administrative lawsuit last month with Britax Child Safety, Inc. involving B.O.B. jogging strollers, but consumer advocates from CFA and Kids in Danger (KID) criticize  the settlement as “vastly too weak” because it fails to protect consumers.

The CPSC filed the lawsuit against Britax in February 2018 and had sought to force the company to address safety hazards caused by the strollers’ wheel attachment. The quick release on the front wheel of the stroller can fail to secure the wheel to the fork, resulting in sudden detachment and injuries.

At the time the original lawsuit was filed, at least 200 consumers had a front wheel unexpectedly detach resulting in at least 50 injuries to children and 47 to adults. The CPSC did not update that number for the settlement release but KID identified at least two new reports of front wheels failing on SaferProducts.gov.

The CPSC had initially argued that this problem presented a substantial product hazard. The settlement, however, adopted by a 3-2 vote, explicitly states that the remedy is not a recall but rather an “information campaign” that cannot be called a recall, despite offering replacement parts to some consumers. In addition, the settlement is time limited to one year, a limitation that does not exist for recalls which continue indefinitely.

“This settlement codifies practices known to be unsuccessful in terms of reaching consumers and urging them to take action to remove an unsafe product from their home,” said CFA Legislative Director and General Counsel Rachel Weintraub. “Calling an action anything but a ‘recall’ undermines the chances that consumers will understand what the hazard is and how to fix it. Limiting the time of the remedy is designed to limit consumer access to a remedy if they can ever figure out what it is,” she added. “This settlement does not serve consumers’ interests.”

CPSC Commissioners Elliot Kaye and Robert Adler issued a strong dissent, stating that not only will B.O.B. consumers “come up short in terms of safety,” but the settlement also “sets dangerous precedents for future corrective actions – thereby lessening safety for far more consumers than are affected by this agreement.”

CFA and KID urge anyone with one of these strollers to constantly check the quick release until the newer options are available in January 2019. If consumers have had an incident with a stroller or any product, they should report it at SaferProducts.gov.

Bipartisan Bill Aims to Stop Misleading “Spoofed” Robocalls

Bipartisan legislation was introduced in the Senate last month to address the growing problem of “spoofed” robocalls that use fraudulent caller identification information to disguise the caller’s true identity.

Introduced by Sen. John Thune (R-SD) and Edward J. Markey (D-MA), S. 3655, the Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act, would direct the Federal Communications Commission (FCC) to develop rules requiring providers of telephone voice services to implement an effective framework for authenticating calls to better enable them to identify and stop unwanted calls before they reach the consumer. It would also increase potential civil forfeitures and criminal fines for intentional violations of the Telephone Consumer Privacy Act (TCPA).

CFA along with Consumer Reports and the National Consumer Law Center issued a press statement in which they welcomed the progress in the effort against unwanted robocalls.

“Authenticating that a call is coming from the source that it purports to be is crucial in the fight against illegal robocalls, which often fraudulently spoof their caller ID,” said CFA Director of Consumer Protection and Privacy Susan Grant. “This bill will move carriers forward to implement call authentication and provide stronger enforcement tools to use against robocallers who flout the law.”