For its part, USDA issued a statement announcing “a top-to-bottom review of the ‘Product of USA’ label.” Secretary Vilsack acknowledged “concern that the voluntary ‘Product of USA’ label may confuse consumers,” but stopped short of committing to any specific reform to the label standards, such as a requirement it only apply to meat from animals born, raised, and slaughtered in the U.S.

“The FTC’s rule will help to protect consumers against deceptive marketing tactics that attempt to portray goods largely produced outside the country as American origin,” said Thomas Gremillion, Director of Food Policy at Consumer Federation of America. “Unfortunately, consumers will still have to grapple with unscrupulous origin claims on beef and pork harvested from animals of foreign origin.”

Under current USDA rules, meat processed from a carcass shipped into the country from abroad may carry a “Product of USA” label. The same goes for meat from animals born and raised in Mexico or Canada, and transported into the U.S. for slaughter. This was not always the case. Prior to 2015, USDA required country-of-origin labeling for fresh beef and pork products, specifically labels indicating where the cow or pig was born, raised, and slaughtered. However, Congress repealed those requirements after Canada and Mexico successfully challenged the policy in the World Trade Organization.

“Thanks to an unaccountable, unelected international tribunal, federal policymakers have abandoned mandatory origin labeling on beef and pork,” said Gremillion. “But the WTO’s decision offers no excuse for failing to protect consumers from deceptive practices, or for neglecting to put in place standards for producers that voluntarily choose to label their products as U.S. origin. Consumers strongly support origin rules; in a 2017 poll commissioned by CFA, eighty-nine percent (89%) of a representative sample of 1000 adult Americans favored, either strongly or somewhat, requiring food sellers to indicate on the package label the country of origin of fresh meat they sell. USDA has the authority – and indeed the duty – to protect consumers from deceptive and misleading claims, including ‘product of USA’ claims on meat from animals that are not born, raised, and slaughtered in the USA.”

Contact: Thomas Gremillion, 202-939-1010

The post FTC’s “Made in USA” Labeling Rule Paves the Way for Better Consumer Protections, Highlights Need for Action by USDA appeared first on Consumer Federation of America.

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“Rohit is fair-minded, independent, and committed to a marketplace that works for consumers and honest businesses,” said CFA Executive Director Stephen Brobeck. “He is well-respected by those with all points of view, and his experience and character will be valuable assets in this critical role.”

Chopra’s work at CFA focuses on consumer protection issues facing young people and military families. He is widely regarded for his expertise in the student loan market.

He previously served as Assistant Director of the Consumer Financial Protection Bureau, where he oversaw the agency’s work on behalf of students and young consumers. He was also named by the Secretary of the Treasury to serve as the CFPB’s Student Loan Ombudsman. Chopra later served as Special Adviser to the Secretary of Education to seek enhancements to student loan servicing and to develop stronger consumer protection standards.

During his tenure at the CFPB, the agency obtained hundreds of millions of dollars in refunds and relief for student loan borrowers to address illegal practices at companies like Wells Fargo and Corinthian Colleges. Under a newly established system, tens of thousands of student loan borrowers have filed complaints to get servicing errors fixed and other help. Chopra helped develop a Financial Aid Shopping Sheet, voluntarily adopted by thousands of colleges and universities, to help students and families make better decisions about student loans.

He also issued a series of reports about industry practices that exacerbated indebtedness and frequently testified before Congress. For example, in 2012, Chopra and Holly Petraeus issued a report uncovering a student loan overcharging scheme targeting members of the military. The report led regulators to charge Sallie Mae and Navient with violating the Servicemembers Civil Relief Act, providing $60 million in refunds for 78,000 servicemembers and veterans. He also worked with a bipartisan group of state Attorneys General to shut down debt relief scams and deceptive lead generators, such as GIBill.com.

“I’m delighted to see Rohit Chopra nominated to serve as an FTC Commissioner.  He did stellar work at the Consumer Financial Protection Bureau, spotlighting abuses that impacted tens of thousands of servicemembers and veterans with student loans,” said Holly Petraeus, who also served as Assistant Director of the Consumer Financial Protection Bureau, leading the agency’s Office of Servicemember Affairs. “He has continued to work to protect the rights of consumers and borrowers, and I look forward to his future contributions to the work of the FTC.”

Chopra also worked closely with entrepreneurs, capital markets professionals, and other regulators to help jumpstart competition in the student loan market, where a few players dominate. Today, consumers enjoy more competitive pricing, methods to compare loans, and new refinancing options.

The FTC is at the forefront of key issues facing consumers, from technology to financial services and more.

Contact: Jack Gillis, 202-737-0766

The Consumer Federation of America is an association of more than 250 non-profit consumer groups that, since 1968, has sought to advance the consumer interest through research, education, and advocacy.

The post CFA’s Rohit Chopra Nominated to Serve as Federal Trade Commissioner appeared first on Consumer Federation of America.

Sir, British and US officials began discussing plans for a future US-UK trade deal this week, without bothering to consult the population of either country on the goals for such talks. As representatives of civil society movements on both sides of the Atlantic, we reject secretive trade talks that keep elected representatives and the public in the dark. UK and US officials have no business trying to precook a post-Brexit trade deal years before such negotiations would be legal.

It has become abundantly clear that trade deals crafted in secret will be hijacked by corporations to promote their narrow interests at the expense of public welfare. That was the lesson of the recent transatlantic and trans-Pacific trade agreements (TTIP and TPP) — both of which have been stopped thus far by movements of millions that spanned borders and sectors. Indeed, corporate lobbies are already seizing on the coming US-UK talks to push an agenda of financial deregulation, privatisation of public services, the undermining of workers’ rights and expansion of unaccountable trade tribunals that allow corporate polluters to sue governments over environmental and health protections they don’t like.

To prioritise the needs of people — not corporate profits — in both of our countries, any potential US-UK trade talks must be led by public input and take place in the light of day.

Signed,

Paul Keenlyside, Co-ordinator, Trade Justice Movement
Dave Prentis, General Secretary, UNISON
Len McCluskey, General Secretary, Unite
Kevin Courtney, General Secretary, NUT
Tim Roache, General Secretary, GMB
Asad Rehman, Executive Director, War on Want
Jean Blaylock, Policy Manager, Global Justice Now
Dave Timms, Senior Political Campaigner, Friends of the Earth
Arthur Stamoulis, Executive Director, Citizens Trade Campaign
Mark Levinson, Chief Economist, Service Employees International Union
Susan Grant, Director of Consumer Protection and Privacy, Consumer Federation of America
Melinda St Louis, International Campaigns Director, Global Trade Watch, Public Citizen
Ben Beachy, Director, Trade Program, Sierra Club
Lisa Griffith, Interim Executive Director, National Family Farm Coalition
Juliette Majot, Executive Director, Institute for Agriculture & Trade Policy
Jake Schmidt, Director, International Program, Natural Resources Defense Council

The post Open Letter From US and UK Civil Society Groups Demanding Transparency in Any Potential US-UK Trade Deal appeared first on Consumer Federation of America.

• Don’t negotiate away sovereign U.S. government authority.
• Don’t allow foreign corporations to bypass established U.S. government legal processes.
• Bring broader public input, with greater transparency, into trade negotiations.

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But, claiming to be the “father” of the TACD, he angrily scolded us as if we were naughty children. He said that it was inexcusable that the TACD and major consumer organizations such as ours were anti-trade and accused us of being in the same camp as President Trump on trade issues. This naturally elicited cries of astonishment from the audience. Though Ambassador Eizenstat said that he had read our papers on trade, apparently he did not understand them. We have never said that we opposed trade agreements. In the TACD’s many letters and detailed policy statements on the Transatlantic Trade and Investment Partnership (TTIP), we have made concrete and constructive suggestions for how to improve both the process and the outcome of the negotiations.

Ambassador Mr. Eizenstat also rolled out the tired claim that trade agreements are good for consumers because they will result in more choices and lower prices. Putting aside the question of whether that’s always true, the point is that those are not consumers’ only, or even main concerns. For instance, as studies have shown, they highly value their privacy and don’t necessarily want to give it up in exchange for lower prices or “free” services. We were, and remain, very concerned that the provisions in TTIP concerning data flows might “trump,” if I may use that word, EU data protections.

Consumers want safe products. They want sustainable products. They want good quality at reasonable prices. They want to be able to use products and services without unfair restrictions. They want good customer service and easy means of redress if they are wronged. They want their regulators and elected officials to be able to respond quickly and appropriately to problems in the marketplace and new consumer protection issues. Trade agreements don’t promise these things and can even threaten them.

What we do oppose are trade agreements that would lower or freeze consumer protections, prevent consumers from exercising their rights, tie the hands of regulators and legislators, and give companies special privileges to challenge consumer protections that impact their bottom lines (at least Ambassador Eizenstat seemed willing to throw out ISDS and similar mechanisms). The TACD has a new vision for how the global economy can benefit consumers. We hope that Ambassador Eizenstat will embrace it and help us promote it to policy makers and businesses.

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We are writing to express our deep concerns with the Ryan-Hatch Fast Track bill (S. 995/HR. 1890) because we believe it will undermine Congress’ ability to have a meaningful role in shaping trade agreement rules that will impact important federal and state consumer policies and protections. We urge you to consider a new form of trade authority that would help ensure that negotiated trade agreements do not jeopardize health, safety and financial protections important to consumers in the U.S. and abroad.

The post Group Letter Opposing Ryan-Hatch Fast Track Bill appeared first on Consumer Federation of America.

The post Group Letter to Chairman Ron Wyden Opposing Fast Track and Calling for a New Model of Trade appeared first on Consumer Federation of America.

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The post CFA Comments Concerning Proposed Public Interest Trade Advisory Committee appeared first on Consumer Federation of America.

We are writing to express our deep concerns with the Camp-Baucus Fast Track bill (H.R. 3830/ S. 1900) because we believe it will undermine Congress’ ability to have a meaningful role in shaping trade agreement rules that will impact important federal and state consumer policies and protections. We urge you to consider a new form of trade authority that would help ensure that negotiated trade agreements do not jeopardize health, safety and financial protections important to consumers in the U.S. and abroad.

The post Consumer Groups Oppose the Camp-Baucus Fast Track bill (H.R. 3830/ S. 1900) appeared first on Consumer Federation of America.

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Leaders with Public Citizen, Sierra Club, Consumer Federation of America and the Transatlantic Consumer Dialogue voiced concerns about the effects of the Transatlantic Trade and Investment Partnership on consumer rights, privacy, communities and the environment. Since tariffs are already very low between the U.S. and the EU, the pact will be about “behind-the-border” policies such as health, environmental and consumer protections.

“U.S. and EU negotiators are clear that their purpose in negotiating TAFTA is to remove ‘regulatory barriers’ to trade,” said Robert Weissman, president of Public Citizen. “Big Business is clear about what this means; giant corporations hope to use TAFTA as a way to roll back or stall a vast swath of consumer and environmental regulatory protections in the United States and Europe – involving everything from food safety to privacy, consumer finance to chemical safety.”

Environmentalists expressed concern about the broad rights granted to corporations through the investment rules in the proposed trade pact. On the call, Sierra Club Executive Director Michael Brune announced that the organization had just sent a letter to United States Trade Representative Ambassador Michael Froman and European Union Trade Commissioner Karel De Gucht on behalf of nearly 200 organizations from both sides of the Atlantic opposing a provision called investor-state dispute settlement. This provision would grant foreign corporations the power to directly challenge government policies and actions that corporations allege reduce their profits. Such cases would be heard in private tribunals for unlimited cash compensation.

“This pact could jeopardize critical safeguards necessary to protect our families, our communities and our climate by giving corporations undue rights to use secret tribunals to challenge public interest laws that they disagree with,” said Brune. “As negotiators meet this week, they must keep in mind that governments exist for the benefit of people – not corporations – and keep these dangerous rules out of the pact.”

Consumer groups also called for trade negotiators to uphold and increase privacy rights for Americans and Europeans.

“At a time of increasing commercial and government surveillance of individuals, we need stronger privacy rights on both sides of the Atlantic, not a trade deal that would allow personal information to flow across borders and into private databases and government hands, without adequate constraints,” said Susan Grant, director of consumer protection at Consumer Federation of America. “A vibrant transatlantic marketplace will only be achieved if individuals can trust that their data will be collected and used appropriately, and both partners in these trade negotiations have a long way to go to gain that trust, especially the U.S.”

The participating consumer groups also called for strong protections on shared data, in order to promote the interests of consumers who will be affected by expanded trade.

“Free flow of information around the web is essential to ensure freedom of expression and consumer choice,” said Anna Fielder, senior policy advisor of Transatlantic Consumer Dialogue and Chair of the Board, Privacy International. “But this does not mean rules on free flows of personal information enforced through trade agreements, at a time when consumer trust is at its lowest due to massive and unwarranted government surveillance. We need speedy adoption of ongoing data protection reforms in the EU before any talk of common privacy standards can begin – and in any case, such standards should be developed outside the trade agreement.”

An audio recording of the telepresser is available at:

The civil society letter opposing investor-state dispute settlement is available at: http://sc.org/InvestmentLetter (PDF)

About Public Citizen

Public Citizen is a national, nonprofit consumer advocacy organization that has worked to protect health, safety and democracy since 1971. For more information, visit www.citizen.org.

About the Sierra Club

The Sierra Club is America’s largest and most influential grassroots environmental organization, with more than 2.1 million members and supporters nationwide. In addition to creating opportunities for people of all ages, levels and locations to have meaningful outdoor experiences, the Sierra Club works to safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and litigation. For more information, visit http://www.sierraclub.org.

About The Consumer Federation of America

The Consumer Federation of America (CFA) is an association of non-profit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. For more information, go to www.consumerfed.org.

About Transatlantic Consumer Dialogue

The Transatlantic Consumer Dialogue (TACD) is a forum of US and EU consumer organisations which develops and agrees on joint consumer policy recommendations to the US government and European Union to promote the consumer interest in EU and US policy making. For more information, visit www.tacd.org.

The post American and European Groups Press for Protected Safeguards in Transatlantic Trade appeared first on Consumer Federation of America.

CFA works in the areas of insurance, energy, financial services, food and product safety, electronic commerce, telecommunications and privacy. But I’m not going to speak about those subjects today. I brought copies of recent TACD resolutions that describe concerns about the TTIP’s potential impact on specific areas of consumer protection and make recommendations for your consideration. What I want to talk about is much more fundamental – the need to have consumers and consumer input at the heart of this negotiating process. There are other societal interests that are important to consumers, such as fair labor standards and environmental protection, and the points I make could apply equally to those areas.

We have been assured by negotiators on both sides of Atlantic that they don’t intend to weaken consumer protections; they simply want to eliminate unnecessary barriers to cross border trade. But many companies and trade associations on both sides of the Atlantic have been trying for years to get rid of consumer protections they don’t like and prevent new or stronger protections from being enacted. The TTIP could provide them with an opportunity to get everything on their holiday wish list, through a process that is much less transparent and democratic than our normal legislative and regulatory systems. With your help, we won’t let that happen. Consumers are at the center of trade, and you must keep their interests at the center of these negotiations.

We know that trade negotiators are not experts on consumer protection, so they need our advice. In the US, the trade representative gets advice from industry advisory groups. We also need a consumer advisory group to provide direct advice. In the EU, an expert advisory group is being created in which consumer organizations will be invited to participate. This is encouraging, and we await more details about exactly how it will work. Expert advice from consumer representatives is not all that is needed, however. Transparency is the key to success of these negotiations. Many recent world events have been propelled by the demand for democracy and transparency, which go hand in hand. The public wants to know what is going on and to be heard. We will no longer accept agreements that are made in secret. The draft text of the TTIP must be made public at frequent intervals during the negotiating process. As consumer advocates, we need the text in order to provide meaningful advice, and we can’t be constrained by security limitations that would make it impossible to work with each other and advocate effectively.

The public and our elected representatives must also be able to see the text. We have been told that this might make the “horse-trading” of negotiations more difficult. Democracy and openness can sometimes make things more complicated, but they produce better outcomes and are essential when it is our hard-won rights and protections that are being horse-traded. On the subject of democracy and openness, I’d like to make two final points. We have seen the leaked EU position paper on regulatory convergence, and it is very alarming.

Perhaps the EU is unfamiliar with the way that anti-consumer forces here in the US are cynically promoting “regulatory reform” and “regulatory impact assessments” in an effort to weaken existing regulations and make it impossible for regulators to promulgate stronger or new protections. The idea that legislators and regulators would have to submit their proposals to an unelected body for review and input, in a process that, because of the disparity of resources, would naturally be dominated by big business, before submitting those proposals to the public for comment, is an anathema to our democratic system. There is nothing now that prevents governments from consulting with each other on ideas for legislation or regulation, and we would encourage that. But we don’t need to create new layers of bureaucracy and opportunities for corporate influence.

We also don’t need to create secret corporate courts, called Investor State Dispute Resolution, as part of the TTIP. The US and EU both have advanced legal systems that are quite capable of giving fair consideration to lawsuits that anyone wants to bring against our governments for allegedly overstepping their authority. No one in the US or EU trade agencies has given us any rational explanation for why this extrajudicial system is warranted and why corporations should be entitled to demand compensation from taxpayers when public policies that our governments adopt to protect the common good affect their bottom line. That’s simply the cost of doing business.

In closing, it’s important to remember that we are all consumers, we drive our economies, and our interests must be at the center of these negotiations. Raising the level of consumer protection across the Atlantic is a worthy goal, as long as that level is a floor, not a ceiling. Trading away our protections and creating institutions that serve only businesses’ narrow self-interests is not an acceptable outcome.

The post Stakeholder Presentation of Susan Grant, Director of Consumer Protection Consumer Federation of America To Negotiators in the Transatlantic Trade and Investment Partnership appeared first on Consumer Federation of America.

Read the entire letter here.

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These backdoor negotiations could also force state and local governments to weaken health and safety standards and give up long-standing tools for local job creation. With national politics gridlocked, this is not the time to tie the hands of state and local governments searching for ways to spur economic growth.

The post Report: Top 10 Threats of the Trans-Atlantic ‘Trade’ Deal to Americans’ Daily Lives appeared first on Consumer Federation of America.

The letter highlights how the shutdown has hindered work across a wide array of issues, including airline and auto safety, food and product safety, financial services and investor protections, as well consumer protection efforts at the EPA, FCC, FDA and FTC. Consumers Union, Consumer Federation of America, National Consumers League, Consumer Action, National Consumer Law Center on behalf of its low-income clients, Public Citizen, National Association of Consumer Advocates, and US PIRG signed on to the piece calling for an end to the impasse.

The groups write, “Consumers rely on the government to ensure the safety of the food they eat, the air they breathe, the products they use, the cars they drive, and the planes on which they fly.  Consumers also expect that the government will help to protect them from predatory financial schemes, fraud and scams.  Many of these consumer protections have been significantly curtailed as a result of the shutdown…We urge a speedy resolution of the shutdown so that the government can resume its critical role on behalf of all consumers.”

Rachel Weintraub, Legislative Director and Senior Counsel for Consumer Federation of America, will present these concerns in testimony at a Senate Commerce Committee hearing examining the impacts of the government shutdown on our economic security. The hearing is scheduled to take place Friday at 1 pm.

Contact: Rachel Weintraub, CFA (202) 387- 6121; David Butler, CU (202) 462-6262

The full text of the letter is below:

October 11, 2013

Dear Member of Congress:

As the government shutdown continues, a coalition of consumer organizations has compiled information about how the shutdown is affecting the safety and wellbeing of millions of American consumers.We are sharing this document with you today.

Consumers rely on the government to ensure the safety of the food they eat, the air they breathe, the products they use, the cars they drive, and the planes on which they fly.  Consumers also expect that the government will help to protect them from predatory financial schemes, fraud and scams.  Many of these consumer protections have been significantly curtailed as a result of the shutdown.

Airline Safety

At the Federal Aviation Administration (FAA), 15,514 of 46,070 employees (34%) have been furloughed.  Air traffic controllers and baggage screeners are considered essential and are on the job so air travel continues.  However, most of the staff that supports the air traffic controllers are on furlough.  Virtually the entire safety inspection force has been sent home, with only one manager at every office across the country left to answer the phones.  This is unprecedented in U.S. aviation history; even during the 1996 government shutdown, most safety inspectors remained on the job. Earlier this week, FAA announced plans to bring back 800 inspectors, oversight staff, and others.  But that is only about 15% of the FAA’s furloughed airline safety personnel.

Food Safety

During the shutdown, the Food and Drug Administration (FDA) has retained about 55% of its staff.  According to the Health and Human Services’ shutdown plan: “FDA will be unable to support the majority of its food safety, nutrition, and cosmetics activities.”  This means that FDA will not conduct routine food safety inspections, some compliance and enforcement activities and will not be monitoring imports.  Much of the laboratory and scientific research necessary to inform public health decision-making also will not be conducted.

Most Department of Agriculture (USDA) inspectors of meat and poultry continue to work.  The USDA’s Food Safety Inspection Service will continue manning every meat production facility with full-time inspectors.  However, a meat and poultry hot line consumers can call for information about food safety or to report problems is closed.  The agency has said that “A lengthy hiatus would affect the safety of human life and have serious adverse effects on the industry, the consumer and the Agency.”

The Centers for Disease Control and Prevention (CDC) has 68% of its staff furloughed, which means that CDC is at significantly reduced capacity to identify and respond to foodborne illness outbreaks, and is unable to support state and local partners in disease surveillance.  PulseNet, CDC’s national network of public health laboratories that detects multi-state food-borne illness outbreaks was non-functioning as a result of the shutdown.  This hampered CDC’s capacity to track the recent Salmonella outbreak linked to poultry that sickened close to 300 people.  The employees who run PulseNet are now back to work since the CDC determined that PulseNet was vital to protecting the public from “imminent threats.”  Still, consultation with states and laboratory work to link outbreaks that might cross state borders will remain at reduced capacity during the shutdown.

Environment

The Environmental Protection Agency (EPA) furloughed 96% or 16,205 employees, leaving 613 workers on the job. Most EPA operations have come to a halt.  EPA programs to protect public health, air quality, and safe drinking water and to regulate pesticides and pollution are mainly longer-term in nature and therefore are not considered essential to prevent imminent risk to human health.  Clean up at 505 Superfund sites (property contaminated by toxic chemicals) in 47 states has been suspended. Some laboratory staff continues to work as are emergency responders (responding to environmental emergencies). Some limited enforcement activities continue, but with skeletal staff.

EPA’s Energy Star program for certifying energy efficient appliances and electronics is currently closed.  EPA also will not be updating its fuel economy website with new vehicle fuel-economy ratings.  The consequence is that there will be no EPA oversight of the accuracy of new fuel economy ratings until the government reopens.

Financial Services/Investor Protections

The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are both funded through the appropriations process and thus, are directly affected by the shutdown.  The CFTC, which oversees the commodities market and the bulk of the derivatives market, was immediately forced to furlough the vast majority of its 700 employees, leaving only 28 employees working at the agency.  This comes at a time when both agencies are struggling under enormous workloads to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act and, in the case of the SEC, the JOBS Act.  That process has virtually ground to a halt at the CFTC, where key rules to protect against risks in the derivatives market were just beginning to take effect.  The shutdown also leaves the CFTC with only a handful of people to police the markets for fraud and manipulation, less than 5 of the 50 individuals who normally perform this function.  The SEC has reported that it has enough carry-over funding to allow it to operate essentially normally for “a few weeks.”  But that funding will run out if the shutdown continues for an extended period of time.

The Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) are self-funded and not subject to the appropriations process.  All will remain open and operational.  Since the Consumer Financial Protection Bureau (CFPB) is funded through the Federal Reserve, it will also remain open and operational.

In addition, education loan borrowers who have a dispute with their loan servicer (or debt collector) will have a hard time resolving the dispute because the Department of Education’s ombudsman’s office is mostly shutdown.

Product Safety

Four percent of the Consumer Product Safety Commission’s (CPSC) total workforce remains on the job – that translates into 23 employees (including 5 commissioners) out of 540 full-time employees.  None of the employees currently working are field investigators or port inspectors.  The CPSC is conducting only business that “protects against imminent threats to human safety, and protect government property” and rulemakings, recalls, and civil penalty negotiations are suspended unless they rise to this level of threat.  Saferproducts.gov, CPSC’s consumer incident data base, is receiving reports but will not be publishing them thereby denying consumers the opportunity to learn about potentially dangerous products.

Two terrible examples bring home the impact of the shutdown on the CPSC’s ability to do its critical safety work.  Last Monday, a two year old girl in San Diego, California was killed when a chest of drawers with a television on top of it tipped over and fell on her, crushing her to death.  A one-year-old boy from Hitterdal, Minnesota, swallowed part of a laundry pod last week and has been hospitalized due to his injuries.  He was just moved out of intensive care and is breathing on his own.  However, CPSC is unable to investigate these serious incidents and is unable to work to educate consumers about how to avoid these serious and preventable safety hazards.

Auto Safety

The National Highway Traffic Safety Administration (NHTSA) furloughed 333 workers out of a total of 597.  As a result, NHTSA is not able to alert consumers about recalls.  Rulemakings, defect investigations, research, and testing is also on hold. NHTSA’s web site states that “Due to a lapse of Federal Government funding, NHTSA is unable process safety defect complaints after close of business September 30, 2013.  Consumers can continue to file complaints via this website, but they will not be evaluated by NHTSA staff until funding and services are restored.” Activities funded by the Highway Trust Fund will continue.  These activities include occupant protection and distracted driving research and development under the office of Traffic Injury Control. Any auto safety defects that emerge during the shutdown will not be investigated properly, leaving consumers and our highways at risk.

Federal Trade Commission and Department of Justice

Less than 20% of Federal Trade Commission (FTC) employees (approximately 241 of its 1,178 workers) are exempt from furloughs.   Employees responsible for protecting life and property through the prosecution of enforcement actions are working. Most legal actions have been stayed; for those few cases where the court has not granted stays, agency work continues.  However, the agency expects no rulemakings during the shutdown, and staffers overseeing the Do Not Call registry, Consumer Response Center, and spam database have suspended work.  Consumers who are identity theft victims cannot access information that the FTC provides about the steps they should take or how to report the problem.

The FTC’s website is not functional—on the FTC’s home page, it states, “Unfortunately, the Federal Trade Commission is closed due to the government shutdown: the FTC Premerger Notification Office will be open to accept HSR filings; consumers may file FOlA requests, but they will not be processed; consumers cannot file complaints or register for Do Not Call; all public workshops, roundtables, hearings and conferences are postponed until further notice.”

The Justice Department’s Antitrust Division is similarly affected.  Sixty-three percent of its workforce has been furloughed.  That could significantly impair its merger enforcement activities, including its pending challenge to the American Airlines/US Airways merger, and other important enforcement activities that protect consumers against harm from anticompetitive business conduct.

Housing Finance

The mortgage market is operated primarily by nongovernmental entities in the private sector, but the shutdown is having an impact in this area.  Mortgage loans may be delayed because the Internal Revenue Service (impacted by the shutdown) is not in a position to verify income for borrowers.  In addition, the Federal Housing Administration (FHA) is operating with only a skeleton staff and is unable to do full quality control reviews of loans receiving FHA mortgage insurance through delegated underwriters.  Over time, this could reduce the quality of the FHA portfolio and lead to higher losses for the insurance fund.

In the affordable rental housing field, the Department of Housing and Urban Development (HUD) has funded current contracts with public housing agencies to provide rental subsidies for very low income renters.  But very shortly current funding will expire, and agencies responsible for paying landlords on behalf of very low income tenants or for directly operating housing for such tenants may be unable to meet their obligations.  Assistance for homeless families and single individuals, typically provided by private, nonprofit operators using federal funds, is also at risk if the shutdown extends further.  Similarly, affordable housing developers are reporting that projects in their pipeline are on hold because officials at HUD and USDA’s Rural Housing Service are unable to respond to questions, process applications for assistance, or sign off on proposed or final development deals.

Drug Safety and Medical Devices

The FDA is partly funded by user fees, which are paid by pharmaceutical and medical device manufacturers.  Some activities related to the user-fee funded programs, such as product approvals and safety communications for drugs and devices, will continue.  About 75% of the FDA staffers who have been retained have jobs that are funded by user fees.  Nevertheless, FDA’s own website acknowledges that the agency “cannot predict whether we will experience delays in (the programs under the law overseeing drug testing and safety) in the event of a protracted lapse in appropriations.”  The website goes on to say that with regard to medical devices, “certain review activities…may be suspended during the lapse period.”

Energy

The Department of Energy (DOE) has furloughed approximately 69% of its personnel (9,595 furloughs out of 13,814.) DOE has some multi-year appropriations that will continue to be spent until they run out, but most DOE programs, including research and renewable energy projects, will not be able to operate for very long.  Important efficiency rules related to televisions, furnace fans, and other appliances, which will save consumers millions of dollars, could be delayed because they cannot be published in the Federal Register until the government reopens.

Health/Social Security

The health insurance exchanges are open, and implementation of the American Affordable Care Act proceeds.  Social Security, Medicare, and Medicaid benefits are being paid, but new applications may not be processed until the government reopens.  Depending on the length of the shutdown, payments to Medicare providers may be affected.

Telecommunications

According to the FCC’s shutdown plan, approximately 30 FCC employees – or less than 2% of its approximately 1750+ employees – have been deemed essential and exempt from the furlough.  Among those deemed essential are the three Commissioners (though not their legal advisors), the inspector general, and a small number of employees who are tasked with critical functions such as the protection of life and property, disaster response operations, and integral national security functions.  However, some of the FCC activities that will cease under the shutdown include: merger reviews, responses to consumer complaints, consumer protection, local competition enforcement, licensing of broadcast, wireless, and management of radio spectrum, and equipment authorizations (which bring new electronic devices to the American public).  Work has been delayed on the highly anticipated spectrum auctions and could affect the timing of the first of these auctions, which were supposed to take place in January.  Finally, the FCC has ceased maintaining its online systems, leaving the public unable to access the resources, public comments, and consumer education materials available on its website.

We urge a speedy resolution of the shutdown so that the government can resume its critical role on behalf of all consumers.

Feel free to contact Rachel Weintraub with Consumer Federation of America at rweintraub@consumerfed.org or (202) 387-6121 or Ellen Bloom with Consumers Union at ebloom@consumer.org or (202) 462-6262 for further information.

Sincerely,

Consumers Union

Consumer Federation of America

National Consumers League

Consumer Action

National Consumer Law Center, on behalf of its low-income clients

Public Citizen

National Association of Consumer Advocates

US PIRG

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