Key Highlights:

• Keynote Speaker: James “Jim” Jones, Deputy Commissioner for Human Foods, U.S. FDA, will inaugurate the conference with insights into the FDA’s evolving role in food safety and nutrition.
• Plenary Sessions: Dive deep into the FDA’s reorganization, debate the dietary guidelines treatment of ultra-processed foods, and find out what it means to apply a health equity lens to food policy.
• Breakout Sessions: Engage in small group discussions on targeted food advertising, climate change’s impact on food safety, lobbying strategies, precision nutrition, regulation of food ingredients, and the challenges facing food workers.
• Networking Opportunities: Connect with leaders and innovators in food policy, nutrition, and public health.

This conference is a must-attend for anyone invested in shaping the future of America’s food policies. Join us for two days of rigorous debate, insightful discussions, and collaborative learning.

RSVP and More Information: https://consumerfed.org/events/national-food-policy-conference/

 We look forward to welcoming you to this important discussion on policies to create a safe, affordable, just, and sustainable food system.

The post Media Advisory: National Food Policy Conference 2024, Unpack the Future of Food Policy with Us! appeared first on Consumer Federation of America.

“Airlines handle sensitive data for millions of individuals on a regular basis, and the vast majority of travelers do not know that their information is bought, sold and used over and over again,” said Erin Witte, Director of Consumer Protection at Consumer Federation of America. “We are encouraged to see Secretary Buttigieg taking a major step toward protecting the privacy of air travel consumers.”  

The post Secretary Buttigieg Announces Enhanced Scrutiny of Airline Data Privacy Practices appeared first on Consumer Federation of America.

Home buyers will still be able to request a concession from sellers that includes funds to help cover buyer agent compensation, but this will be after they have had the opportunity to comparison shop and negotiate buyer agent rates.  The settlement will also encourage more sellers to negotiate the compensation of their listing agents.

Required buyer agent contracts will demand that buyer agents discuss their compensation with their buyer clients.  These discussions alone will tend to lower buyer agent compensation.  But as CFA’s February 15, 2024 report on these contracts explained, they have been written mainly by attorneys for state Realtor associations for the benefit of agents and brokers, and contain many anti-consumer features.

The residential real estate marketplace will take some time, perhaps several years, to fully process the implications of this settlement.  But over time more agents will feel free to offer different types of compensation, and more consumers will comparison shop and negotiate commissions in a more transparent marketplace.

The industry has raised concerns about first-time home buyers.  They will have the opportunity to request a concession from home sellers that helps cover buyer agent compensation.  But the real solution is for the industry to work to remove regulatory barriers that make it difficult for buyers to include this compensation in their mortgages.  We are fairly confident that the industry will pursue this issue in part to preserve buyer brokerage.  Without the option, more buyers will contact listing agents, losing fiduciary representation though also potentially lowering their costs.

The post CFA COMMENT ON THE SETTLEMENT OF MAJOR LAWSUITS BY THE NATIONAL ASSOCIATION OF REALTORS appeared first on Consumer Federation of America.

Water beads are super-absorbent polymer chemical spheres sometimes marketed as toys or for “sensory” play. Unfortunately, children have been known to ingest water beads, which have led to multiple life-threatening obstructions and even death. Despite “non-toxic” labels, recent research demonstrates that water beads can be toxic due to bead-to-bead inconsistencies. In 2023, CPSC announced that evidence demonstrated acrylamide toxicity in some water bead products. In December 2023, Amazon and other retailers announced a commitment to stop selling water beads.

“Disappointingly, water bead products are still easily accessible on the online platform,” said Courtney Griffin, Director of Consumer Product Safety. “Today’s report underlines many of the serious challenges CPSC faces in its mission to protect consumers, especially when third-party sellers ignore CPSC outreach or disappear. In this case, the companies have failed to respond to CPSC’s requests for recalls, placing consumers at risk.”

Congressman Frank Pallone, Jr. (D-N.J.) introduced legislation to ban water beads marketed for children last year. Representative Robin Kelly (D-Ill) and Representative Britney Pettersen (D-Colo.) co-sponsored the legislation.  The Ban Water Beads Act would direct the CPSC to enforce such a ban. The New Jersey Assembly Consumer Affairs Committee also advanced legislation last year that prohibit the sale of water beads in New Jersey.  In September 2023, Senator Richard Blumenthal (D-Conn.) called on the CPSC to remove water beads from the market, especially water beads sold as toys for children.

The post New Warning that Water Beads May Pose Risk of Toxicity to Children appeared first on Consumer Federation of America.

The Congressional Budget Office is a non-partisan agency within the U.S. Congress that provides objective budgetary and economic information. Their report puts a dollar amount on the estimated government subsidies that the FHLBank system receives as a Government-Sponsored Enterprise (GSE). The FHLBank system comprises 11 regional banks that extend cheap advances to their membership of banks, credit unions, and insurance companies with the intended purpose of supporting housing and community development. As a GSE, this system receives special benefits (including exemption from taxes) in exchange for providing public benefits such as helping meet unmet credit needs, facilitating financial products for underserved groups, and supporting community development.

“The new Congressional Budget Office report put a number – to the tune of $7.3 billion a year – to the public subsidies that FHLBanks receive,” Sharon Cornelissen explains, who is the chair of the Coalition of FHLBank Reform and the Director of Housing at the Consumer Federation of America. “The bulk of these billions in public funds subsidize corporate profits rather than Americans’ ability to afford a house. Consumers deserve much more from the FHLBanks, especially as we find ourselves in the middle of a national affordable housing crisis.”

Key highlights from the report include:

1. Multi-billion Dollar Subsidy. The CBO estimates that in fiscal year 2024, the FHLBank system will receive a total gross government subsidy of $7.3 billion.
2. These Subsidies Mostly Support Profits Rather Than Offer Public Benefits. The Congressionally-mandated 10% of FHLBank net income toward Affordable Housing Programs, which support affordable housing construction and downpayment assistance across the nation, is tiny compared to the profits realized by the Banks and their members. In 2023, FHLBanks paid $355 million to Affordable Housing Programs (AHP) but paid out $3.4 billion to members as dividends. Through these payouts, the FHLBanks are distributing a public subsidy as profit to banks and insurance companies.
3. CBO Questions “Trickle-Down Economics” Model of FHLBanks in Today’s Mortgage Markets. The CBO report also raises serious questions about the extent to which this public subsidy gets passed on to the public through other indirect benefits that FHLBanks provide, questioning whether consumers see lower mortgage rates as a result of FHLBank subsidies. Over 40% of members of FHLBanks have not originated a single mortgage over the last five years.

George Collins, an advisor for the Coalition for FHLBank Reform and former executive vice president and chief risk officer at the Federal Home Loan Bank of Boston, noted: “Our Coalition’s initial impetus was the skewed and unfair distribution of the FHLBank profits. This report affirms our concerns and further energizes our efforts.”

For more information or inquiries, contact:

Sharon Cornelissen at scornelissen@consumerfed.org

George Collins at ghcoll25@gmail.com

About the Coalition for Federal Home Loan Bank Reform:

The Coalition for Federal Home Loan Bank Reform is a non-partisan organization dedicated to bringing together a wide variety of stakeholders to discuss, educate and shape reforms aimed at enhancing the ability of the FHLB system to address the nation’s unmet housing and community development needs.

The post New Report Shows Federal Home Loan Banks Received $7.3 Billion in Subsidies, but Offered Little Public Benefits in Return appeared first on Consumer Federation of America.

“Being uninsured poses a potential threat not only to individual homeowners but also to communities and our national housing stock,” CFA explains in EXPOSED: A Report on 1.6 Trillion Dollars of Uninsured American Homes. “Being uninsured can foster deeper economic precarity for millions of homeowners across the country, especially those with lower incomes, and it is an important contributor to racial inequality. Inequalities in who has homeowners insurance will likely widen the long-standing racial wealth gap, as uninsurance disproportionately impacts Hispanic, Black, and Native American homeowners. Over time, insurance access is likely to become a key decider of who can fully reap the benefits of homeownership, including maintaining their home and building wealth.”

Using data from the American Housing Survey and American Community Survey, CFA found:

• One in thirteen American homeowners are uninsured—approximately 7.4% – living in about 6.1 million homes.
• Homeowners earning under $50,000 per year are twice as likely to lack insurance compared to homeowners in general. Among lower-income homeowners, 15% are without coverage.
• Certain demographics of homeowners are disproportionately at risk. 22% of Native American homeowners, 14% of Hispanic homeowners, and 11% of Black homeowners have no insurance.
• 35% of owners of manufactured homes and 29% of homeowners who inherited their homes lack coverage.
• Rural homeowners, those living in the metropolitan areas of Houston and Miami, and in Mississippi, New Mexico, and Louisiana are most likely to not have homeowners insurance.
• In 2021, an estimated $1.6 trillion in property value of homes lacked coverage. This includes $339 billion of uninsured Hispanic-owned homes and $206 billion of uninsured Black-owned homes.

“Many consumers are struggling to afford rising premiums and must go without homeowners insurance,” said Sharon Cornelissen, PhD, CFA’s Director of Housing and co-author of the report. “That puts them at risk of losing everything. One storm or wildfire means they have to go into deep financial debt to repair their home, live with unsafe and inadequate housing, or even become homeless.”

The report concludes with the following recommendations:

• State insurance regulators should collect more data to track homeowners insurance gaps and inequalities in insurance markets. Despite decades of proposals, regulators have consistently failed to collect granular and timely data needed for research, and so information and analysis about homeowners insurance is in its infancy.
• Problems in the homeowners insurance market pose a systemic threat to housing markets, and solving them will require extensive investments in mitigation. States and the federal government need to substantially increase investments in community risk reduction, home fortification and loss mitigation, and develop strategies to reduce insurers’ overreliance on unregulated, global reinsurance.
• Regulators should collect more information about racial homeowner insurance gaps. Historical work about racial discrimination in insurance markets has demonstrated the broad incidence of insurance “redlining,” similar to the denial of mortgages in Black and Hispanic communities. Insurance companies have not been held accountable for this; more research should be done and regulators should use existing Fair Housing laws to investigate these gaps, and if needed, to correct them.

“Insurance is an essential part of homeownership, financial security, and community resilience. When millions of American families simply cannot find or cannot afford insurance coverage for their home, we are all exposed,” said Douglas Heller, CFA’s Director of Insurance. “Not only are uninsured families unprotected, but the economic fabric of entire communities is also at risk if significant portions of residents cannot rebuild after a disaster. Our study should be a wake-up call for lawmakers, insurance and housing regulators, and the nation’s emergency management agencies.”

The post Millions of Consumers Lack Vital Homeowners Insurance, Resulting in $1.6 Trillion in Unprotected Market Value appeared first on Consumer Federation of America.

• How are insurers reducing or eliminating coverage in response to growing climate risk?
• What regions and communities are seeing the greatest premium increases and reductions in coverage as insurers shift risk onto consumers with coverage exclusions, higher deductibles, and other opaque actions?
• How are insurers’ underwriting and pricing responding to climate risk?

The consumer groups were responding to today’s NAIC announcement that it will begin data collection from insurers to assess insurers’ response to growing climate risk and rising insurance costs.  The NAIC action came nearly 18 months after the FIO announced its intention to collect such data from insurers in the absence of any relevant data from state insurance regulators.  After criticizing the FIO for its data collection effort, the NAIC was spurred into action to avoid further embarrassment.

Unlike regulators for other financial services, state insurance regulators have refused for decades to collect the granular consumer market outcome data needed to monitor the availability and affordability of auto and home insurance, the groups noted.  State insurance regulators today cannot answer basic questions about what is happening in their insurance markets because they haven’t collected the relevant data.

“It is clear that absent the FIO effort to address the gaping holes in state insurance market monitoring, the insurance regulators would have continued to do nothing to modernize data collection for market regulation,” said Birny Birnbaum, longtime consumer representative at the NAIC and director of the CEJ who is a member of the Federal Advisory Committee on Insurance that advises the FIO.  “FIO has demonstrated the wisdom of Congress, which created the agency as a key post-financial crisis reform with the mandate and tools to monitor the industry and identify gaps in state insurance consumer protection.”

“There is a growing homeowners insurance crisis across the country, and the NAIC has been far too slow to act,” said Douglas Heller, CFA’s Director of Insurance. “As an example, in January of 2024 NAIC updated its annual homeowners insurance report and the most recent data are insurance premiums from 2021. Getting the data call that FIO has prompted – and then expanding it in years to come – is critical to reforming the insurance markets that are wreaking havoc on families and businesses.”

Bob Hunter, CFA’s Insurance Director Emeritus and former Texas Insurance Commissioner, said that “during 40 years of work helping consumers of insurance, I have observed that the NAIC, which normally avoids taking action needed to protect consumers, suddenly becomes ‘brave’ at moments like this, when they fear the federal government is about to do what they should have been doing all along.”

“While anecdotal data, voluntary industry surveys, and data from last-resort programs have effectively raised the alarm, these have not painted a full picture, and selective disclosures from insurers can just as easily be used to exploit a crisis as they can to solve it,” said Carly Fabian, Insurance Policy Advocate at Public Citizen. “The success of the NAIC’s efforts, and Treasury’s reliance on them, hinges on an accessible data source that is updated regularly with data from every state.”

While praising the new data collection effort, the consumer groups also noted that it is limited in scope.  Despite evidence from the country about condominium associations, cooperatives, and affordable rental housing developers seeing few insurance choices and massive premium increases, the data call will not capture anything about the most vulnerable portions of the market. The NAIC should commit to expanding future data collection to better understand the impact of climate risk on Americans beyond those who live in single family homes, the groups said.

The post Consumer Groups Applaud the Federal Insurance Office for Pushing State Insurance Regulators to Start Collecting Data About Property Insurance Markets and Climate Risk appeared first on Consumer Federation of America.

The nonprofit, nonpartisan consumer organizations issued the following statements:

Birny Birnbaum, Executive Director of the Center for Economic Justice, said:

 “Reforming the title insurance industry is an essential component of addressing home buying and homeownership affordability.  Iowa is the only state that has created a low-cost alternative to title insurance.  While a few states have made some efforts to address the anti-competitive practices in title insurance, state insurance regulators have failed to rein in excessive title insurance premiums.  We’re hopeful that these new federal initiatives will jump start action at both the federal and state level.”

Douglas Heller, Director of Insurance for Consumer Federation of America said:

 “The title insurance market has been broken for decades, and homeowners and new homebuyers have paid the price. At the moment when consumers are finalizing a consequential financial decisions – buying or refinancing a home – they are forced to purchase title insurance to protect the lender in a market built on kickbacks to the agents who direct consumers toward an overpriced title insurance policy. The insurance industry and the agents who steer consumers to these insurance companies have lobbied relentlessly to block reforms that would create substantial savings for consumers, so we are very encouraged that the President is shining a light on this broken system.”

Sharon Cornelissen, CFA’s Director of Housing said:

 “It is encouraging to see the White House look at potential reforms of the title insurance industry. Unnecessarily expensive title insurance has added to the upfront costs of buying a home, creating barriers for first-time homebuyers. Excessive costs like this have no place in a housing market that is facing its worst affordability crisis in decades.”

As a background on problems in the title insurance market, the consumer groups highlight CFA’s 2013 testimony to the New York Department of Financial Services and Birny Birnbaum’s 2005 Analysis of Competition in the California Title Insurance and Escrow Industry.

The post Consumer Groups Applaud President Biden’s Announcement of Steps to Address Homebuying Closing Costs and Excessive Title Insurance Charges appeared first on Consumer Federation of America.

“The CFPB’s new rule prioritizes the needs of cash-strapped households ahead of big bank profiteering,” said Adam Rust, Director of Financial Services for the Consumer Federation of America. “In 2022, credit card companies charged $14.5 billion in late fees. By prohibiting issuers from charging  a $31 missed payment fee when the true cost to credit card companies is less than eight dollars, the rule closes the loophole that permitted this form of price-gouging and injects fairness where it has been sorely needed.”

Fact sheet:

The rule will save consumers money. The CFPB estimates the rule will reduce the sum of late fees charged per year from $12 billion to $3 billion. These fees serve no purpose except to pad the profits of big banks.

The rule will not make banks stop offering credit cards: The industry contends that without late fee income, some credit card companies will issue fewer cards or exit the market entirely. This logic is unfounded. Credit card companies charged more than $105 billion in revenues in 2022 – and with increases in interest rates and outstanding balances since then, their revenues are likely to be higher regardless of how much they can charge for a missed payment.

Applying strong consumer protections to credit cards does not undermine credit availability. Research on the impacts of the CARD Act revealed an interesting pattern. Consumers benefited from the lowered cost of credit, avoided billions in late fees, and still opened more than 100 million new credit card accounts in 2014. Total available credit increased 10 percent from 2012 to 2015.

Curbing late fees will not force banks to lose money. It will just prevent them from making exorbitant profits from a junk fee. The rule still allows them to recover their costs. But it corrects a loophole that has favored credit card companies at the expense of consumers. Over the years, late fee income has been three to five times greater than collection costs on accounts that are  past-due but have not yet been written off. Federal Reserve research shows that collection costs, the main expense of late payments, hover around 25 percent of late fee income.

Consumers like the proposed rule. Fifty-three percent of survey respondents said they “strongly support” lowering the maximum late fee, and another 29 percent “somewhat support” it. Only 7 percent strongly oppose it.

The CFPB created the rule using evidence-based research. The CFPB analyzed financial data from six large credit card banks to determine the real cost of late payments. The choice of an $8 immunity provision is derived from this research. The CFPB rule allows any bank that can demonstrate that its costs were higher to receive an upwardly adjusted cap consistent with these proven costs.

The rule will not cause credit card issuers to curtail rewards programs. The credit card market is better understood as several segments within a single product space. Rewards cards are generally offered to consumers with prime credit or better, whereas below prime consumers rarely receive the same benefits. In its most recent survey of the credit card market, the CFPB found that prime plus and above accounts redeemed approximately 80 percent of all rewards, whereas below-prime cardholders redeemed only about six percent of rewards. Subprime accounts were more likely to carry revolving debt, pay only the minimum balance, and miss a payment. Interestingly, because deep subprime consumers carried higher levels or revolving credit and paid higher interest on those debts, they had higher average minimum payment due amounts. In the same study of 2022 accounts, deep subprime accounts incurred 15 times as many late fees per year than did prime accounts. Accounts that paid off their balances each month – and thus did not incur late fees – redeemed a high share of rewards. There is little evidence to support the theory that lower revenue on credit card late fees will force banks to curtail rewards.

The post CFA Statement and Factsheet in Response to the Publication of the CFPB’s Credit Card Late Fees Rule appeared first on Consumer Federation of America.

“Lead generation fees paid by banks to these websites are invisible hands that guide consumers into higher-priced credit cards,” said Adam Rust, Director of Financial Services at the Consumer Federation of America. “But consumers should be concerned that those hands will end up in their wallets, because banks cover the cost of advertising on digital shopping sites by charging higher interest rates. By casting a spotlight on the practices of digital comparison-shopping platforms, the CFPB’s circular is an appropriate remedy to a market where so many top 10 lists found on these card comparison sites point consumers to a big bank credit card, even though credit cards issued by smaller banks and credit unions tend to have lower interest rates.”

The post CFA Statement on CFPB “Rigged” Comparison-Shopping Results Guidance appeared first on Consumer Federation of America.

The appeal comes in the form of a February 27 letter from five leading public interest groups as TTB begins a series of “listening sessions” on labeling and advertising of alcoholic beverages on February 28.  Raising concerns that the listening sessions are no more than a delay tactic to maintain the status quo and “slow walk deliberations for months,” the organizations – the Asthma and Allergy Foundation of America (AAFA), Center for Science in the Public Interest (CSPI), Consumer Federation of America (CFA), Food Allergy Research and Education (FARE), and National Consumers League (NCL) – called for TTB to publish the rulemakings by June 2024.

The Treasury Department promised that TTB would issue mandatory alcohol labeling rules in a November 17, 2022 letter in response to a lawsuit filed by CSPI, NCL, and CFA. The Department stated its intention to publish the three rulemakings before the end of 2023.

“We write … to express our dismay and serious concern that TTB has backtracked from its written undertaking of the November 17, 2022 agreement,” the groups wrote to Secretary Yellen. “TTB has, in effect, enabled recalcitrant companies by delaying indefinitely rulemakings on mandatory alcohol labeling while opting for a voluntary rule under which labeling “Serving Facts” or “Alcohol Facts” and ingredients are optional.”

Focusing on the health consequences of delaying action on alcohol labeling, the letter from advocates to Secretary Yellen describes how better alcohol labeling will benefit the 84 percent of U.S. adults who drink alcoholic beverages –216 million people – and who currently do not have the facts about the alcohol they are consuming to protect their health and safety. Overconsumption of alcohol is a costly public health problem that has become much worse in recent years, as alcohol-related deaths have risen substantially.  Among the key concerns, alcohol is involved in about 30 percent of all traffic crash fatalities in the U.S, is a source of empty calories that contributes to obesity, can impact blood sugar control in people with diabetes, and labeling can be a life-or-death matter for people with food allergies. Additionally, excessive drinking increases the risk of liver disease, hypertension, cardiovascular disease, alcohol use disorders, certain cancers and severe injuries.

“The consensus among public health and nutrition experts, and consumers themselves, in favor of mandatory and complete alcohol labeling is overwhelming,” said Thomas Gremillion, Director of Food Policy at the Consumer Federation of America. “By reneging on its promise to initiate rulemakings, TTB continues to deny Americans the same helpful and easily accessible labeling information now required for conventional foods, dietary supplements, and nonprescription drugs.”

The letter to Secretary Yellen also stresses that alcohol manufacturers have the capability to put standardized Serving Facts labels on their products, when required. This is the case for products such as some hard ciders, hard seltzers and wine coolers that are regulated by the Food and Drug Administration, which requires such products to have the same Nutrition Facts panel and ingredients statements on nonalcoholic beverages, from soft drinks to juices.

“To date, TTB has taken the position that requiring standardized nutrient content labeling on alcoholic beverages is too costly and burdensome for beverage alcohol manufacturers,” said Sally Greenberg, CEO of the National Consumers League. “However, the inconvenient truth for the industry is that some of the very same companies whose products do not include a Serving Facts statement if they are regulated by TTB already put complete alcohol labeling on their hard ciders, hard seltzers, wine coolers and other FDA regulated wines and beers.”

Highlighting that the time has come for mandatory alcohol labeling, the letter makes clear that the agency’s current voluntary labeling rules are not working. Although the rule gives companies the option of putting “Serving Facts” or “Alcohol Facts” and ingredients information on their products, new research from the Center for Science in the Public Interest finds that most manufacturers have opted out of TTB’s voluntary program. Using TTB’s COLA database to examine the labels for 132 of the nation’s top beer and wine brands, CSPI’s study found that only 11 labels of the 65 beer brands examined (17%) and none of the 67 wine brands included ingredients lists while 18 beers (28%) and no wines used the voluntary “Serving Facts” label, and one additional beer brand carried the voluntary “Alcohol Facts” label. CSPI’s review also showed that even when serving information is included on beer and wine labels, there is no standard format for where and how the disclosures appear, making it hard for consumers to find information easily and compare different brands.

“We have the data that demonstrate that Treasury’s voluntary rule has failed to adequately improve transparency in alcohol labeling,” said Dr. Peter G. Lurie, President of the Center for Science in the Public Interest. “Ensuring that the agency ends this ineffective voluntary regime by issuing mandatory labeling rules necessitates national leadership. This is why we are appealing directly to Secretary Yellen to intercede personally to require the agency to commit to publish all three proposed rules by June 2024.”

The 2022 letter whereby TTB undertook to publish standardized alcohol content, calorie, and allergen labeling by the end of 2023 resulted from a lawsuit filed by Center for Science in the Public Interest, Consumer Federation of America, and the National Consumers League on October 3, 2022. The suit charged TTB with failing to act on a citizen petition, submitted to the Treasury Department in 2003 to mandate alcohol labeling. CSPI, CFA and NCL filed the petition along with a coalition of 66 other organizations and eight individuals, including four deans of schools of public health.

The post Coalition Calls for Nutrition, Ingredient and Allergen Labeling on Alcoholic Beverages appeared first on Consumer Federation of America.

“Punishing safe drivers with higher premiums just because they don’t have perfect credit has always been unfair. The $20 million in refunds helped undo the unfair credit score penalties insurance companies imposed during the pandemic, when so many Nevadans faced significant financial pain and were not even driving, because they were stuck at home,” said Douglas Heller, CFA’s Director of Insurance. “We applaud both former Insurance Commissioner Barbara Richardson, who crafted this consumer protection, and Commissioner Scott Kipper, who implemented it after the Nevada Supreme Court upheld the rule.”

During the pandemic, the Division found that insurers’ credit score-based premium increases were unfairly discriminatory and in violation of state law. Its regulation banned companies from using consumer credit information to increase consumers’ premiums after March 1^st, 2020. The regulation also required insurance companies to provide refunds to consumers whose insurance premiums were increased because of their credit information before the regulation was adopted in early 2021. According to the Division, as of February 1^st, 2024, $20,960,078.02 in refunds have been provided to 163,975 Nevada consumers because of this rule, for an average refund of $127.82.

After an insurance industry challenge to the regulation, the Nevada Supreme Court sided with the Division, CFA and the Center for Economic Justice (CEJ), which jointly submitted a friend of the court brief in the case, and upheld the rule. The temporary consumer protection, which expires this spring, also prevented millions of dollars in additional credit score penalties that were never charged because of the regulatory prohibition, which was made fully effective after the Nevada Supreme Court victory in February 2023.

The consumer groups warned that many Nevadans could face significant premium hikes on consumers – including many with perfect driving records – due to their credit scores when the protection lapses in May. Noting that other data sources insurers use, for everything from marketing and pricing to claims handling and anti-fraud efforts, can also lead to unfair discrimination and higher prices for safe drivers, the groups said that the Nevada legislature should adopt reforms similar to a 2021 Colorado law that requires algorithm bias testing to root out unfair discrimination in insurance.

“The pandemic made clear that one type of data used by insurers could be unfair and unfairly discriminatory,” said Birny Birnbaum, Executive Director of CEJ.  “In the case of consumer credit information, the pandemic resulted in different prices for consumers with the same risk profile — the actuarial definition of unfair discrimination.  Insurers should be required to routinely test these non-traditional sources of data for unfair discrimination and racial bias.”

At the Property and Casualty Insurance Advisory Committee meeting, CFA’s representative, Michael DeLong highlighted that the end of this protection and the continued use of other socioeconomic factors in pricing – such as a driver’s education level, job title, or marital status – will exacerbate the pain of skyrocketing insurance premiums in the state.  It is clear, he noted, that reforms are needed to end the unfair discrimination that makes it difficult for many Nevadans to comply with the state’s mandatory insurance law.

“Nevadans are facing huge premium hikes as it is,” said Delong, a Research and Advocacy Associate with CFA. “State legislators need to step in, not only to continue the protection that refunded consumers $20 million, but to prevent other industry strategies that punish drivers simply because of their socioeconomic status. That would not only prevent further financial pain; it will help people avoid being priced out of coverage and possibly having to drive uninsured, which puts everyone at risk.”

The post $20 Million+ Returned to Nevada Drivers Due to Pandemic Prohibition on Auto Insurance Penalties Based on Credit Score appeared first on Consumer Federation of America.

“This timely report provides clear evidence to show how credit card companies aren’t just covering their costs – they are applying an additional ‘greedflation charge,’” said Adam Rust, Director of Financial Services for the Consumer Federation of America. “Increasingly, credit card companies play by different economic rules, especially the big credit card issuing banks. This report is another piece of evidence highlighting the effects from a lack of competition. Even though more than three thousand banks issue credit cards, ten banks have more than four–fifths of all accounts – and they charge higher interest rates. It underscores how large marketing budgets permit a few banks to hide higher rates and penalty fees behind rewards promotions. The result is a market that is out of balance. 

Today’s report further justifies the CFPB’s work to curb junk fees and promote transparent pricing. In no uncertain terms, it explains why they must level the playing field between consumers and banks and presents one more reason for prudential regulators to increase their scrutiny of merger applications.” 

The post CFA Statement in Response to CFPB Credit Card Interest Rate Report appeared first on Consumer Federation of America.

Citing research from the Consumer Federation of America (CFA) and other sources, the DOJ opinion rejected a proposed settlement, calling the proposal neither fair, reasonable, or adequate.  “It makes insignificant and largely cosmetic changes to the [MLS] Rule, while perpetuating the existing structure that drives supra-competitive commissions.  There is no reason to believe that the settlement will reduce broker commissions for the class.”

“This DOJ opinion virtually guarantees that buyers will eventually be able to negotiate buyer agent commissions that are currently fixed through industry collusion,” said Stephen Brobeck, a CFA senior fellow.  “It is also likely that there will be greater variation of agent compensation depending on factors such as agent experience and time spent on the sale,” he added.

The DOJ opinion represents a major watershed in efforts, over the past 80 years, to introduce more price competition in agent and broker compensation.  These efforts include:

• DOJ litigation begun in the 1940s against industry adoption of “standard rates of commissions” with a notable U.S. Supreme Court decision in 1950 favoring DOJ.
• A massive 1983 report by the Federal Trade Commission that explained and documented how the industry uses informal collusion, and coupled rates, to set these rates.
• A 2006 congressional hearing at which DOJ, FTC, Redfin and CFA criticized industry price-fixing.
• A 2018 DOJ-FTC public workshop at which several participants, including industry members, criticized industry price-fixing.
• A 2019 lawsuit (Moehrl v. NAR et al.) filed in Chicago by some of the largest, most successful class action firms in the country, quickly followed by a similar lawsuit (Sitzer v. NAR et al.) filed in Kansas City.
• An October 2023 jury decision in the Sitzer lawsuit that found the industry guilty of price-fixing and awarded damages that could exceed $5 billion.
• More than 20 recent class action lawsuits filed representing sellers or buyers that are increasing current and potential legal costs, jeopardizing not only NAR, MLSs, and big companies but also all residential brokers.

“The industry will be foolish if they do not seek to consolidate the lawsuits, agree to pay affordable damages, and decouple seller and buyer agent compensation,” noted CFA’s Brobeck.

DOJ does not envision a compensation system in which buyers must come up with additional cash to pay their agents.  The agency agrees that sellers could provide dollar concessions to be used for this compensation and other buyer expenses.  However, DOJ stressed that buyers must have the ability to negotiate these commissions then decide what, if any, concessions to seek from sellers.  Similarly, sellers would have the ability to decide whether to offer any concessions and, if so, their amount.

Some of the details of this decoupled system need to be worked out.  “It is critically important that buyers negotiate buyer agent commissions before their agents search for properties,” said CFA’s Brobeck.  “Otherwise, buyer agents could steer buyers to properties with the highest dollar concessions and potential agent compensation,” he added.

It is also important that buyer agents be prohibited from being compensated by both buyer and seller, a practice the NAR Code of Ethics disapproves of.  Otherwise, buyer and listing agents could easily collude to maintain existing commission levels.

It appears that the DOJ opinion was influenced by separate proposals made by CFA and by a group of attorneys representing major multiple listing services, both of which are cited in footnotes.  CFA supports the MLS proposal but only as a package deal.  “By eliminating one or two key requirements, the proposal would allow the existing collusive system to continue,” said CFA’s Brobeck.

CFA emphasizes that it is not easy to completely eliminate price-fixing.   “Significant asymmetries between consumers and agents provide opportunities for continued price-fixing within a decoupled system,” said CFA’s Brobeck.  “Agents could tell buyer and seller clients that 2.5-3.0 percent rates [5-6% total] were normal, and agents could refuse to negotiate these rates, as many listing agents currently do [around three-quarters, CFA research has found].”

“To ensure significant price competition, both buyers and sellers would need to discuss and try to negotiate compensation of their agents,” Brobeck said.  “Even then, rates would be unlikely to fall immediately, yet over time could decline to an average of 3-4 percent level, saving consumers an estimated $20-$30 billion annually, with much greater variation in types of compensation and rates charged by different agents.  No longer would inexperienced agents be able to charge the same rates as highly competent agents with years of experience,” he added.

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Sharon Cornelissen, CFA’s Director of Housing, reacts:

“It is disappointing to see the banking trade associations try to undermine the modernized CRA rule, which was the result of years of interagency collaboration, thousands of public comments and industry input, and a careful consideration of how banking and the challenges of underserved markets look different today than when CRA was passed in 1977.”

The Community Reinvestment Act remains an essential tool to make sure that people in lower-income and historically underserved communities across the United States have access to lending, ranging from a loan to start a small business to a mortgage to buy a home.

Adam Rust, CFA’s Director of Financial Services, reacts:

The CRA was done in an incredibly deliberate manner. It took a decade to get the regulators to consider changes. Critics have no reason to fault the process, as the regulators intentionally aimed to honor all of the expectations of the APA.

Moreover, the new rule is hardly one-sided. The small banks received significant concessions. Even though CRA was meant to address redlining, race is still not considered in exams.

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“Junk fees are not only annoying, they are deceptive and can push vulnerable people into poverty and a crushing cycle of debt,” said Erin Witte, Director of Consumer Protection at Consumer Federation of America. “Being honest about the price is not complicated and getting the FTC’s rule across the finish line will level the playing field for consumers.” 

“Whether it’s in rental housing or concert tickets, junk fees have artificially increased prices across the economy, disadvantaging honest businesses’ ability to compete,” said Erik Peinert, Research Manager and Editor at the American Economic Liberties Project. “The FTC’s proposed rule is a strong and simple one: require sellers to disclose the total price up front. Consumers will know how much they’re paying at the outset and be able to compare between competing sellers.” 

“Junk fees, added on top of sky-high rent, put safe and decent rental housing further out of reach for low-income renters,” said Ariel Nelson, staff attorney at the National Consumer Law Center. “An FTC rule that requires landlords to be honest about the total price of an apartment and the purpose of the fees they charge will go a long way toward helping renters to effectively budget and stay in their homes. It will also benefit landlords who, with the help of certain rental housing listing platforms, are already advertising the total price of rent up front.”

“Consumers have been getting nickel and dimed – or dollared and 20 dollared – by deceptive fees for too many years. We welcome an end to junk fees,” said Teresa Murray, Consumer Watchdog Director for U.S. PIRG.

“Junk fees are creeping into nearly every purchase we make, misleading consumers about the true cost of products. The FTC’s common-sense rule simply tells sellers to give consumers the full price up front—without burying the fees or misrepresenting them,” says Ruth Susswein Director of Consumer Protection at Consumer Action.

“Americans are fed up with hidden junk fees that can really add up and cause financial hardship for families living on tight budgets,” said Chuck Bell, advocacy program director for Consumer Reports. “The FTC’s proposed ban on hidden junk fees will create greater transparency and accountability around pricing that will help consumers find better deals and foster more competition in the marketplace.”

“No consumer likes getting tricked into paying higher prices,” said Eden Iscil, Public Policy Manager at the National Consumers League. “These junk fees throw off household budgeting and make comparison shopping nearly impossible. The FTC is doing critical work and cracking down on this problem.”

The FTC’s proposed rule seeks to eliminate “hidden and bogus” junk fees that are added to the price over the course of a purchase, hiding the real price, preventing consumers from comparing between different sellers. Junk fees distort competition and allow deceptive sellers to increase prices. It creates an uneven playing field where businesses who do not hide their prices in this way are at a disadvantage, because their prices look higher by comparison. The rule would ensure that sellers disclose all mandatory fees up front, facilitating easier price comparison for consumers, and prohibit bait-and-switch pricing tactics. Furthermore, businesses will not be able to misrepresent fees or be vague about their purpose. 

 The coalition comment also urges the FTC to strengthen several provisions in the proposed rule to prevent companies from using alternative deceptive pricing tactics to get around the rule. In particular, the coalition supports stronger rules around price disclosures for optional fees, prohibiting default selection for optional purchases, and using the well-established “reasonable consumer standard” to enforce the rule: if a reasonable consumer would expect something to be included in the purchase, it should be.  

Read the full comment here.

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“This bill represents an important milestone,” said Thomas Gremillion, Director of Food Policy at Consumer Federation of America, “Cancers caused by alcohol kill tens of thousands of Americans each year. At the same time, survey after survey shows that fewer than half of adults are aware that alcohol increases cancer risk. One survey showed that 10% of adults think drinking wine decreases cancer risk. It does not. Drinking any type of alcohol—even small amounts—increases cancer risk.”

According to American Cancer Society researchers, alcohol use represents the 3rd and 4th leading cause of cancer for women and men, respectively. For some cancers, even light or moderate drinking significantly increases risk. For example, researchers estimate that consuming 1 standard drink per day is associated with a 4% increase in breast cancer risk, and drinking 2-4 drinks per day with a 23% increased risk.

“Alcohol’s cancer burden has fallen particularly hard on historically disadvantaged groups such as African-Americans and indigenous peoples,” said Gremillion, “and low awareness has contributed to that burden.”

Alaska Natives represent 17 percent of the state’s population, and are at significantly higher risk for alcohol harms, including cancer. A recent analysis of data from the Centers for Disease Control and Prevention, for example, shows that rates of alcohol-associated cancers among American Indians in Montana were more than 40% higher than among White Montanans. Epidemiological data show similarly increased risk for African Americans. According to one recent study, among those who drink in excess of dietary guidelines, African Americans are at a more than 100% increased risk of breast cancer, and nearly 300% increased risk of colorectal cancer, compared to their white counterparts. Researchers have also found that African Americans are less likely to be aware that alcohol causes cancer.

“The alcohol industry has sought to cast doubt on the scientific consensus that alcohol causes cancer for decades,” said Gremillion. “But the evidence has only gotten stronger and industry lobbyists are having to resort to more and more radical tactics.”

Last year, consumer advocates complained that U.S. trade officials were beholden to the alcohol lobby after they raised objections within the World Trade Organization to a national law in Ireland that will soon require cancer warnings on alcohol labels. At the beginning of this year, advocates cried foul again when the National Academies of Sciences announced that a special expert committee to study alcohol’s health effects would include several scientists who had previously accepted funding from the alcohol industry. Congress delegated authority to the National Academies following a report from the federal Dietary Guidelines Advisory Committee that recommended revising drinking limits downward for men, in part due to cancer risk.

The World Health Organization first documented the link between alcohol and a variety of cancers in 1987. Researchers estimate that cancers associated with alcohol consumption affect nearly 90,000 Americans each year, and that alcohol consumption represents the third largest modifiable risk factor contributing to cancer cases in women (behind smoking and obesity) and the fourth largest in men (behind smoking, obesity, and UV radiation). In 2014, alcohol consumption was associated with an estimated 6.4% – 50,110 – of all cancer cases in women, and 4.8% – 37,410 – of all cancer cases in men, with the largest burden for female breast cancer (39,060 cases).

Despite these impacts, however, surveys from organizations such as the National Cancer Institute and American Institute for Cancer Research have found that fewer than half of U.S. adults know that alcohol increases cancer risk. This disconnect between alcohol’s contribution to cancer risk, and consumer awareness of that contribution, supports the need for a warning label, according to consumer groups.

“Consumers deserve accurate information about alcohol and its risks. At a time when alcohol-related harms are soaring to unprecedented heights and dragging down U.S. life expectancy, messaging to raise awareness of alcohol cancer risk provides an important counterbalance to Big Alcohol’s propaganda,” said Gremillion. “Laws like Rep. Gray’s will enable more informed drinking decisions, and ultimately save lives.”

The Consumer Federation of America is a national organization of more than 250 nonprofit consumer groups that was founded in 1968 to advance the consumer interest through research, advocacy, and education.

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The report for the third quarter of 2023 provides a simplified presentation of key data points for easy reference, and an overview of the FHLB financial drivers, including:

• A simple business model with one primary line of business (advances).
• Record profits in 2023 driven by higher interest rates and the earnings from the investment of capital.
• Operating costs that may seem efficient, but should be better explained for a business with fewer than 7,000 customers.

The Need for Enhanced Periodic Reporting for Policymakers and the General Public

The FHFA already provides regular reporting on some aspects of the FHLBank System, such as an annual report to Congress. Their recent report, FHLBank System at 100: Focusing on the Future, calls for enhanced reporting. The CFR applauds this recommendation and calls on FHFA to go even farther with the reforms. FHFA could improve FHLB transparency by providing quarterly reporting on each of the Banks and the System as well as making this data easily available to any user.

For comparative purposes, insured depository institutions must file quarterly Call Reports with the FDIC.  FDIC provides detailed reporting on these numbers each quarter through the publication of the Quarterly Banking Profile. The reports are available to the general public for download and further analysis. Additionally, each FHLBank files periodic disclosures to the SEC. Anyone interested in a more comprehensive disclosure must go through the filings individually to compile basic performance information or a comparative analysis within the system. Because each FHLBank takes a somewhat different approach to its disclosures, it is challenging to assess the entire system.

Going forward, the CFR will focus on building an analytical foundation based on key information about the System, all taken from publicly available documents. The CFR will update the data and analysis on a quarterly basis. This work will be posted on the CFR website, helping the general public, media and advocates to hold each FHLB accountable.

Please contact Katie McCann at kmccann@consumerfed.org with all inquiries.

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“Through lax hiring and training, many companies sponsor agents that have too little knowledge and experience to adequately serve consumers,” said Stephen Brobeck, a CFA senior fellow and the report’s author.  “Home buyers and sellers benefit from considering recent sales experience and customer evaluations before hiring an agent,” he added.

The CFA report examined the annual number of home sales of 2,000 randomly selected agents working for major companies in four diverse urban areas – Central Pennsylvania, Orlando (FL), Tucson (AZ), and Minneapolis (MN).  This research revealed that nearly half of the agents (49%) sold only one or no homes the previous year and that nearly three-quarters of the agents (70%) sold five or fewer homes. [2]

“The residential real estate industry is truly a part-time industry with most agents working sporadically and holding another job, often full-time,” said CFA’s Brobeck.  “There is no other financial services industry or profession where part-time, marginal workers are so ubiquitous,” he added.

Despite the agent glut, most major companies continuously advertise sales positions.  On one major employment website, in five of six urban areas at least one sales position was advertised by all but one of six major companies.  This continuous hiring reflects four main factors:

• A high agent turnover rate opens up job positions that companies feel must be filled.
• Newly recruited agents bring with them new clients, often friends and family members.
• These agents pay fees – ranging from $50 to $400 monthly — that help companies cover overhead expenses.
• Since most agents are independent contractors not employees, firms have limited liability for the conduct of these agents.

This limited liability diminishes the incentive of companies to adequately train, mentor, and oversee the new agents.  Nearly all national and large regional companies offer training in the practicalities of selling property, but these courses are usually online and not required.  Mentoring programs are infrequent, and those brokers with responsibility for new agents often are given too many agents and too few incentives to adequately oversee.  As a result, notes the report: “The large majority of new licensees apparently are not required to take courses, participate in company training programs, seek a mentor, or receive active broker supervision.”

Moreover, most states do not require more active supervision of new than experienced agents.  Only seven states require stricter supervision, and only three (Colorado, Illinois, Montana) define what this supervision entails.

“Consumers do not benefit from the failure of companies to adequately train and oversee new agents,” said CFA’s Brobeck.  “Incompetent agents impose costs on consumers ranging from missed sales opportunities to disadvantageous sale prices to problematic homes,” he added.

State governments, the industry, and consumers can address these agent inadequacies.

• State governments can require agents to take post-license courses on the practicalities of selling property (7 states do).  They also can require companies to more closely supervise new agents (7 states do).
• The residential real estate industry needs to set higher standards for training and overseeing new agents.  These standards would increase agent competence, help ensure a smoother sales process, and enhance the reputation of the industry as well as benefiting consumers.
• CFA urges home sellers and buyers to research the recent sales experience and customer reviews of agents before hiring one.  The most useful sources of this information are Zillow and Realtor.com.  “Researching agents will not only benefit individual buyers and sellers but also help ensure a more competitive marketplace where competent agents are more likely to succeed,” CFA’s Brobeck notes.

^[1] Stephen Brobeck, A Surfeit of Real Estate Agents: Industry and Consumer Impacts (July 2023) and A Surfeit of Real Estate Agents 2: Is Entry Too Easy? (October 2023).

^[2] The National Association of Realtors projects only 4.1 million sales of existing homes this year.  Between 2007 and 2022, except in 2021 (6.1 sales) these annual sales ranged between 4.1 million and 5.6 million, so that while 2023 sales are low, they are still within the range of the past 15 years.

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“Consumers deserve safe products,” said Courtney Griffin, Director of Consumer Product Safety at Consumer Federation of America. “Civil penalties are an important tool to discourage manufacturers from taking risks that hurt or kill consumers. We applaud Senator Welch and Congresswoman Schakowsky for introducing this legislation, which will protect consumers and ensure the Consumer Product Safety Commission can hold companies accountable.”

“One of the CPSC’s more important roles is keeping children safe from dangerous products,” stated Nancy Cowles, Executive Director of Kids In Danger (KID). “Removing the artificial cap on multiple violations will allow CPSC to structure penalties that deter future violations and sends a strong message that children’s safety should be a top concern of all manufacturers.”

Just this year, CPSC demonstrated the importance of civil penalties. Generac Power Systems, Inc. agreed to pay $15,800,000 after failing to promptly report a defect in its portable generators that resulted in the amputation and disfigurement of users’ fingers. Further, Peloton agree to pay $19,065,000 for failing to report defects in a treadmill that lead to a child’s death. The CAP Act will allow the CPSC latitude when it considers factors related to civil penalty assessments and ensure that civil penalty amounts reflect the severity of violations and deters future violations.

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Consumer Federation of America (CFA) is an association of nearly 250 non-profit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education.

Kids In Danger (KID) is a nonprofit organization dedicated to protecting children by fighting for product safety. Our mission is to save lives by enhancing transparency and accountability through safer product development, better education, and stronger advocacy for children.

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“Year after year, CFA has found that the percentage of children dying in OHV-related incidents is alarming,” said Courtney Griffin, CFA’s Director of Consumer Product Safety.  “It is devastating to see toddlers included in this statistic.”

“All OHVs, even youth models, pose risks,” said Dr. Gary Smith, President of the Child Injury Prevention Alliance. “OHVs are fast, complex machines, and due to their design, they roll over easily. One wrong choice could lead to the emergency department or worse. Children younger than 16 years just aren’t ready for the demands of safe riding, so we encourage parents to find a different activity for their child.”

According to the 2023 fatality data, OHV fatalities disproportionately occur on-roads.  Last year, 67% of OHV deaths occurred on-road.  Even industry groups have opposed the use of OHVs, including All-Terrain Vehicles (ATV), on roads because the vehicles are not designed, manufactured, or intended for use on public streets, roads, or highways.  Unfortunately, roadway crashes are more likely to involve multiple fatalities, collisions, and head injuries. Victims in roadway crashes are less likely to wear protective gear, such as helmets, and were more likely to be carrying passengers, both things that are risk factors for ATV-related fatalities and injuries.

CFA has been working to minimize deaths and injuries from OHVs for decades by petitioning the Consumer Product Safety Commission (CPSC) to ban adult-size ATVs for children, convening a coalition to prevent OHV road access, compiling fatality information in real time with that coalition, and urging the CPSC to collect annual Recreational Off Highway vehicle (ROV) data among other requests to take steps to reduce OHV deaths and injuries.

CFA urges consumers to take the following seven critical steps to reduce OHV deaths and injuries:

• Never operate an OHV on a road.
• Never permit children younger than 16-years-old to operate an adult-size OHV or any OHV that is too large or too powerful for them.
• Always wear a helmet and other protective gear when riding an OHV.
• When riding an OHV that contains seatbelts, always wear them.
• Never allow more people on an OHV than it was designed to carry.
• Never ride when under the influence.
• Take a hands-on safety course.

Our partners at Prevent Child Injury have issued an important ATV safety toolkit aimed specifically at helping parents learn about the risks of children using ATVs. If consumers have experienced an incident or injury involving an OHV, reports can be submitted to the CPSC at www.cpsc.gov.

CFA makes all tracked OHV fatality data available on our website.

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“We applaud the CFPB for taking this needed step to rein in junk NSF fees,” said Adam Rust, Director of Financial Services for the Consumer Federation of America. “When a bank consciously chooses not to honor a payment request, but still charges a fee, it prioritizes its greed above its customer’s needs and adds insult to injury. It is telling that most banks have stopped charging NSF fees, and revealing that some have not. The CFPB’s rule will force financial institutions that have been dragging their feet on doing away with these junk fees to finally stop their harmful practices.” 

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The new rule closes a regulatory loophole that had permitted financial institutions to offer overdraft services but exempted them from prohibitions in the Truth in Lending Act (TILA). When the Federal Reserve implemented TILA in 1968, it decided to not include overdraft services within the definition of credit. At the time, the practice of covering occasional check overages was a discretionary service extended to customers through manual review. However, with the introduction of the debit card in the 1980s, banks automated the service and introduced them at scale. Overdraft fees morphed into a line of revenue of more than $10 billion annually.

“Banking is supposed to be about making loans, taking deposits, and facilitating payments, but at some point, some banks decided it was also about charging junk fees,” said Adam Rust, Director of Financial Services for the Consumer Federation of America. “The CFPB’S proposed rule restores balance in the relationship between consumers and their financial institutions.

The CFPB’s proposal says that if a bank wants to make obscene profits on overdraft fees, then the service will be regulated as credit, but if it keeps prices to a reasonable and proportional level, it has a safe harbor.

The rule gives banks who want to charge overdraft fees a choice: they can charge a reasonable fee, in which the price is closely tied to the cost banks experience from overdrawn account balances, or they can build a profit-generating overdraft service, but as “covered overdraft credit,” with required pricing disclosures and regulatory treatment consistent with credit cards.

“Ideally, more banks would follow the lead of the ones that have eliminated overdraft fees entirely,” said Adam Rust. “But under the CFPB’s new proposal, while a financial institution can still choose to derive profits from overdraft, new disclosure rules will distinguish it unfavorably from its rivals.”

The CFPB believes the new rules will save consumers at least three billion dollars per year.

Some banks have eliminated these fees, others have reduced the penalty and limited the number of charges, but many other institutions still need to alter their practices. In 2022, consumers paid approximately $8 billion in overdraft fees. Before that, annual fees were regularly greater than $11 billion. However, some financial institutions have never changed their policies, and their dependence on those revenues comes at the great expense of their customers.

See the proposed rule and the corresponding fact sheet.

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Furniture and television tip-overs are a significant hidden hazard in American homes. Between 2000 and 2021, there have been at least 592 fatalities linked to tip-over incidents, of which 482 were children. An annual average of 19,400 emergency department-treated injuries were associated with tip-over incidents between 2019 and 2021.

After years of hard work by parent advocates and consumer groups, President Biden signed the Stop Tip-overs of Unstable, Risk Dressers on Youth (STURDY) Act into law in 2022. The STURDY Act, which only addressed clothing storage units like chests, dressers, and armoires, went into effect on September 1, 2023. However, non-compliant clothing storage units made before September 2023 can still be sold in stores and online.

Unfortunately, most homes in America still contain unstable furniture, despite the STURDY Act’s life-saving changes. Parent advocates, consumer groups, and the CPSC have urged consumers to protect against this deadly, hidden hazard by anchoring all furniture, televisions, and appliances. The recall of New Age’s zip-tie plastic kits presents another safety challenge.

“While PAT has always advocated for properly anchoring all furniture with drawers, doors, and shelves to the wall, it has long been a concern of many parent and consumer advocates that there is currently no mandatory testing standard for furniture anchors,” said Kimberly Amato, Vice Chair Parents Against Tip-Overs, who also currently leads efforts at ASTM to update requirements for anchoring devices. “Properly anchoring your furniture to the wall is vital to prevent tip-overs. This recall makes it clear that the type of anchor you use matters. We applaud this recall and strongly encourage all furniture anchor manufacturers to test their anchors for real-world use to ensure they work as intended.”

“If you have any dressers in your home that came with plastic zip-tie type anchors or any furniture currently using this type of anchor, participate in this recall and replace that faulty anchor,” urged Nancy Cowles, Executive Director of Kids In Danger. “And please, if you have any incidents of tip restraints failing or furniture tipping, report it at SaferProducts.gov. Your action will keep other children safe.”

“While an important safety tool, furniture anchoring is underused and imperfect,” says Courtney Griffin, Director of Consumer Product Safety at Consumer Federation of America.  “It is not a consumer’s burden to make furniture safe and stable. This recall is another reminder that companies selling furniture, televisions, and appliances must do everything in their power to prevent tip-over tragedies.”

Consumers should contact Alliance4Safety toll-free at 855-416-7370 anytime or online at www.alliance4safety.org/new-age-recall or www.alliance4safety.org and click on “New Age Recall Information” for more information.

CFA and KID strongly urge consumers to follow the recommendations below to ensure their home is safe:

• Check your furniture, televisions, and appliances! Consumers, especially caregivers, are strongly encouraged to anchor their furniture and televisions to the wall.
• Visit the websites for Parents Against Tip-Overs and CPSC’s Anchor It! campaign for more information about unstable furniture, televisions, and appliances.
• For consumers purchasing new clothing storage furniture, remember that non-compliant furniture manufactured before September 1, 2023, will remain available for purchase. Consumers should ask sellers whether a piece of furniture meets the 2023 version of the ASTM F2057 standard (codified at 16 CFR part 1261).
• Remind friends and family to anchor their furniture and televisions to prevent tragedy.
• Share any incidents of furniture tip-overs or tip-over devices failing with CPSC at gov.

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Consumer Federation of America (CFA) is an association of nearly 250 non-profit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education.

Kids In Danger (KID) is a nonprofit organization dedicated to protecting children by fighting for product safety. Our mission is to save lives by enhancing transparency and accountability through safer product development, better education, and stronger advocacy for children.

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