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Updated: February 2017
Consumer Action Issues and Positions
Where we stand on our issues of interest
By participating in legislative, regulatory and policy initiatives, Consumer Action ensures that underrepresented consumers have a voice in front of lawmakers and the national media. Each year, Consumer Action takes positions on dozens of bills at the state and national levels and submits comments and testimony on a host of consumer protection issues. In 2017, we see myriad opportunities to join our allies in pushing back on any efforts to weaken consumer protections and to work with our friends in the corporate world on shared principles of consumer fairness and transparency. Our staff will focus on informing and protecting consumers in an environment where our work will become even more crucial. Below is an alphabetical list of the issues we address and the policy positions that direct our advocacy efforts.
Arbitration, access to justice and class action lawsuits: Arbitration is an alternative method of resolving disputes (outside of court) in which two separate parties present their side of a complaint to what should be a fair and objective third party. Consumer Action believes that while consumers should be able to opt in to arbitration, they should never be forced into it. Unfortunately, consumers often unwittingly sign a “ripoff clause” in the fine print of cell phone, credit card, banking and other financial contracts that mandates arbitration. Consumer Action supports a strong Consumer Financial Protection Bureau (CFPB) rule to not only restore consumers’ rights to sue via class action lawsuits (which are often prohibited in mandatory arbitration clauses) but to also, ultimately, ban all forced arbitration. In addition, we oppose any state or federal legislation that would deny consumers their day in court.
Automobiles: Auto dealers often sell cars to minority consumers with loans that contain inflated interest rates known as markups. The CFPB found that these discriminatory pricing practices cost consumers tens of billions of dollars and violate fair lending practices. Yet despite the evidence, leaders in the House and Senate in last year floated bills that would block the CFPB’s attempts to bring fairness and transparency to the auto lending market and restrict its ability to regulate the industry. Consumer Action will fight any such legislation in the 115th Congress.
Consumer Action also is active on the issue of auto title loans: If a consumer does manage to finance an affordable automobile, predatory lenders often can seize the borrower's car title as collateral for the loan and repossess the car to coerce payment. Consumer Action opposes this practice and has written comments to the CFPB encouraging them to strengthen a 2016 proposed rule that would, among other things, rein in the vehicle title loan industry.
Banking and credit: As we saw as recently as 2016 with Wells Fargo, big banks and credit card issuers continue to commit acts that lead to real world repercussions for consumers—unnecessary fees and financial products, overdraft charges and negative impacts on credit scores. Consumer Action supports federal and state regulators’ continued efforts to oversee, enforce and reform the banking industry. We oppose any legislation that would defund or defang these agencies (through cumbersome review processes, procedural and budgeting requirements, etc). Issues-wise, we oppose any overdraft or other service that is automatically added to a consumer’s bank account without the consumer’s express permission and we support the widespread availability of savings-account and customer-requested, credit-based overdraft protection services. We support a fiduciary responsibility for bankers and other financial advisers working with consumer investors. Finally, we actively fight against fraud in the banking industry and oppose any measures to restrict the Department of Justice’s (DOJ) efforts to stop banks from knowingly conducting business with customers who are processing transactions connected with fraud or other illegal activities.
Broadband internet: Consumer Action works to promote policies to ensure that people have access to a fast, affordable and open internet. We supported the Federal Communications Commission (FCC) rule giving consumers the right to make informed choices about whether their personal information and data collected about them can be used and shared by broadband internet service providers (ISPs) and will fight to protect the FCC's privacy rule? We oppose any efforts to undermine the ability to protect consumers from the emerging online “privacy divide” that leaves low-income Americans with fewer privacy options than are available to the wealthy (“pay for privacy”).
Consumer complaints and redress: Consumer Action believes that it should be easy for consumers to “sound the bell” when they face unfair and deceptive practices. We have worked tirelessly to improve the Consumer Financial Protection Bureau’s (CFPB) Consumer Complaint Database. The database provides consumers of financial products and services with the opportunity to report complaints publicly, seek resolution and benefit from access to the complaint data of other consumers by avoiding similar harms. Consumer Action also endorses a similar portal and database at the Department of Education to help borrowers lodge student loans complaints and problems with for-profit colleges.
Regulatory agencies: Independent regulatory agencies are critical in protecting consumer interests and keeping businesses honest. Elected officials with big ties to the financial industry are especially determined to de-fund and defang the Consumer Financial Protection Bureau (CFPB)—the government regulatory agency created solely to protect consumers in the wake of the 2008 financial crisis—by stripping its independence and slashing its budget. We educate the public on the latest attacks against the CFPB and other consumer protection agencies and encourage them to contact Congress to oppose legislation that tries to weaken their power to protect consumers. We oppose legislation that hampers the capacity of these agencies to protect the environment, the financial system, public health and safety and more by making them susceptible to outside political interference and control.
Credit reporting and scores: Consumer Action advocates for fairness, transparency and accuracy in credit reporting, and because of this, we back legislation which would protect consumers from flaws in the credit-reporting system that can lower their credit scores, raise their interest rates and potentially cost them a mortgage or even tens of thousands of dollars in higher-interest payments over time. We also oppose the use of credit reports and scores in all situations where they could become elements of discrimination. We fight against any legislation to weaken the Fair Credit Reporting Act (FCRA), the Credit Repair Organizations Act (CROA) and the Equal Credit Opportunity Act (ECOA). We also oppose any federal bills that would preempt or weaken stronger state laws, and will fight to protect a private right of action for consumers who have suffered financial and privacy harms due to inaccurate credit information.
Data control, protection and privacy: In this brave new digital world of Big Data, Consumer Action believes that all consumers should also be able to control, limit or prohibit the sharing of their personally identifiable information, particularly between unrelated companies and for reasons that go beyond the original consumer-approved purpose of the data usage, unless the consumer explicitly "opts in" (agrees) to having their information used for marketing and other purposes unrelated to the original purpose of collection. Consumer Action supports legislation to protect consumers by requiring reasonable security policies and procedures to protect data containing personal information, and to provide for nationwide notice in the event of a breach. Consumer Action also works to rein in warrantless searches of digital information, illegal and otherwise unapproved surveillance of consumers, unregulated new technologies (e.g., facial recognition) that jeopardize consumer privacy, illegal searches and seizures, and more.
Debt collection: People who owe debts should not be treated like second-class citizens, nor should they have to endure harassment or other illegal and questionable practices by debt collectors. Consumer Action works to promote regulations and legislation that would end well-known abuses and make consumers safe. These abuses include, but are not limited to, reviving the collection of time-barred “zombie” debts after the statute of limitations has run, pursuing people who don’t owe the debt, collecting debts without account validation, failing to adequately investigate consumer disputes, suing individuals without proper notice and then obtaining default judgments when the individuals don’t show up in court, and leaving voicemail messages that violate consumer protection laws.
Fintech. The term financial technology—“fintech” for short—is the use of computer programs, mobile apps and other technology that enable financial services online or by phone. Start-ups and existing companies in the market include banking alternatives, mobile payments, money transfers, loans, fundraising, investing, asset management, pay-as-you-go insurance and more. The area is exploding because it is one of the hottest target markets for venture capitalists looking to invest in new companies. Fintech boosters say the sector holds great potential to expand financial inclusion, empower consumers and help families and businesses take more control of their financial situations.
In early December 2016 the Office of the Comptroller of the Currency (OCC) proposed a plan to allow fintech companies to become special purpose national banks. Consumer Action has concerns that the OCC plan could permit certain fintech companies to undermine state consumer protection laws, evade state usury caps, allow poorly underwritten loans and encourage risky and complex investment products that may not be well understood by investors.
Consumer Action believes that fintech companies that lend money should be subject to the Truth in Lending Act, strong “ability to repay” underwriting standards and state usury laws. In addition, when fintech companies make use of customer or subscriber data, or pull data from outside sources for underwriting and marketing purposes, companies should obtain prior consumer consent before any customer data is shared with third parties. These companies should have strong data retention policies that spell out how long they store data and how they safeguard it. Consumer data should be safely maintained, used only for the services agreed to (without further consent) and transparent in its content and use. Fintech companies that buy, collect, use and store consumer data should also be accountable to consumers, under the Fair Credit Reporting Act, to verify and remove inaccurate information that has been challenged by consumers, as well as provide adverse action notices so consumers can access the source of the data when they are denied credit.
Insurance: Consumer Action believes that health, life, homeowners/renters and auto insurers should offer truly protective policies, charge reasonable premiums, treat consumers fairly (without discrimination and undue invasions of privacy), and settle all claims and disputes equitably. In accordance with these principles, we’ve urged Congress to investigate and take action to prevent large health insurance company mergers that would further consolidate the market and pose the threat of substantial harm to millions of consumers (through increased costs, decreased quality of service, etc.). In 2016, we joined a coalition to encourage the Federal Insurance Office (FIO) to set a strong standard that recognizes auto insurance as unaffordable when the average premium in a community exceeds two percent of the community's median household income. We also empower consumers to be their own advocates in the insurance marketplace by offering free, multilingual educational materials about the different types of insurance and the pros and cons of purchasing various policies and products.
Income taxes: Not only does Consumer Action work to make our national tax system fairer and more transparent, we also operate under the belief that taxpayer dollars should be used in ways that benefit all consumers. In keeping with this goal, we oppose legislation that siphons your tax dollars into partisan projects at the expense of low-income and vulnerable consumers and we work to support laws like the "Buffett Rule," which would apply a minimum tax rate of 30 percent on individuals making more than a million dollars a year. (The Buffett Rule is named after Warren Buffett, who has publically stated that it is wrong to make low- and middle-income people pay more in taxes than billionaires like himself.) Consumer Action also promotes laws that hamper and prosecute criminals who commit tax scams and fraud, and supports legislation that would allow taxpayers (many of whom do not have access to a computer) the option to continue to receive and file paper returns. We will be monitoring the Internal Revenue Services' Future State initiative to prevent unintended consequences for low-income, limited English speaking and digitally disconnected consumers.
Investments and retirement savings accounts: We all want to believe that the financial adviser we turn to for advice has our best interests at heart. Unfortunately, the financial marketplace often lacks clear rules surrounding these professionals’ “fiduciary responsibility” to the consumer. What’s worse, Wall Street, and the banking industry at large, are often in opposition to the national rules created by the Dodd-Frank Act (passed in 2010 to prevent the type of financial risk-taking that led to the 2008 financial crisis). This is why Consumer Action works tirelessly to support the federal agencies that regulate the financial industry and protect consumers. We investigate and oppose often detailed, complicated legislation that would let the investment market go unchecked, like bills that would end the mandatory clearing of derivatives or make it difficult for consumers to procure the information they need to invest wisely. As complex as this work is, the benefit to consumers is easy to understand. For instance, due in part to our efforts, the U.S. Department of Labor (DOL) passed a groundbreaking rule (the first of its kind) in 2016 that will require retirement account advisers to finally put individual investors’ interests first—ahead of any profits that may factor into the professional advice they give to workers saving for a secure future. In 2017 we expect the DOL fiduciary rule to be under attack in Congress and by the new Administration and we are poised to fight any changes to the 2016 rule, due to take full effect by April 2018.
Language access: Over 25 million U.S. residents, many living in low-income communities and neighborhoods of color, are limited in their English language proficiency. Unfortunately, it’s easier for banks, auto dealers, mortgage lenders and other companies to take advantage of people when they don’t understand the terms and conditions of the products being sold to them. Consumer Action works on behalf of limited English proficient (LEP) consumers to help them navigate the financial system and avoid fraud and other predatory practices. In addition to producing our materials in a number of languages (from Chinese to Tagalog), we have urged federal regulators to require the translation of key financial documents (such as mortgage paperwork). We also encourage these regulators to improve language access to federal complaint and counseling services (like the CFPB’s Consumer Complaint Database); offer guidance to financial institutions on language-access standards; and improve tracking of the language preferences of mortgage applicants. Consumer Action offers free advice and referrals to consumers in English, Spanish and two Chinese dialects (Mandarin and Cantonese) at 415-777-9635. Our online complaint form is available in English and Spanish. (In late 2016 we prepared a special Consumer Action News issue on the topic of language access.)
Mergers and acquisitions: Consumer Action, based on many years' experience, believes that the larger companies get, the less incentive they have to consider the concerns of individual consumers or the benefit of competition in the marketplace. Consolidation in an industry leads to fewer choices for consumers and increases the potential for harmful consumer price-gouging. Merging two or more large customer service facilities often leads to failures to respond appropriately to customers' needs. It is increasingly clear that antitrust authorities have allowed too many mergers in recent years in many industries, such as airlines, telecommunications, health care and insurance. The creation of mega corporations also discourages new and innovative start-ups in the same industries because it is difficult for new entrants to compete with market-dominant behemoths. Because of the potential for negative impact on consumers, we will continue to eye mergers closely. We urge government antitrust officials to thoroughly study the potential impact of merger proposals and to investigate and bring enforcement actions against businesses that abuse their dominant market position.
Military members and veterans: We believe that the servicemembers who have sacrificed so much for this country deserve to be treated with respect, not exploited by predatory lenders, for-profit schools and other corrupt and fraudulent institutions when they are most vulnerable (upon deployment, leaving the military, etc.). We not only provide this population with training and guides to help them and their local advocates take advantage of the many consumer-friendly borrowing and banking options available to servicemembers and veterans, we also pressure Congress and the U.S. Department of Defense to protect key laws like the Military Lending Act and Servicemembers Civil Relief Act so that our troops and veterans continue to enjoy legal protection from exorbitant interest rates, harmful loan terms and other bad financial products. We also encourage federal regulators to take action against those who violate these laws.
Mortgages and housing: The 2008 financial crisis left many people in a precarious housing situation that continues to this day, which is why one of our main priorities at Consumer Action is helping consumers at imminent risk of foreclosure or those struggling to modify their mortgages and keep their housing affordable. As an active member of a major national housing coalition, we’ve urged federal regulators to require ways to escalate imminent financial problems to the forefront of the agenda in order to prevent people from losing their homes. Thanks to efforts like these, the Consumer Financial Protection Bureau now requires mortgage servicers to have a process in place to quickly evaluate and resolve pressing mortgage problems. We also support legislative and regulatory initiatives to keep widows and other heirs housed even if their names are not on the home loan title; mandate buyers receive truthful information on the key features, costs and risks of the mortgage loans they apply for; require lenders to determine if borrowers have the ability to successfully repay loans; prohibit and penalize housing discrimination and redlining, and provide basic loan protections to vulnerable, low-income manufactured housing residents. Finally, we work to expand access to credit in order to make the dream of buying a home a reality for all who want it.
Predatory lending: Predatory lenders trap consumers in a cycle of debt that they cannot escape, via short-term, small-dollar (payday) loans with exorbitant annualized interest rates of 300% plus. When borrowers can't repay the money after a short time, they often choose to take out another loan to cover the old balance, thereby entering a cycle of debt. The Consumer Financial Protection Bureau is working on a new rule to regulate payday lenders, and Consumer Action is pushing for the agency to build a strong rule that requires both caps on the number of loans that can be issued to a consumer in a short time period and sensible “waiting periods” between loans. The proposed rule also would mandate that lenders determine the consumer’s ability to repay (without defaulting on other expenses or taking out additional loans) before they could provide a loan. It’s crucial that the rule prevents loopholes that would allow the industry to skirt regulations. Finally, Consumer Action opposes any legislation that would allow the payday industry to avoid stronger federal regulation by pushing weaker industry-backed state bills.
Privacy: Consumer Action has long worked to protect consumer privacy through advocacy and education. We believe that every person has the right to privacy in their homes, their communications, their commercial and financial dealings and their personal affairs. An important element of the right to privacy is the right to protect one's personal data and to make choices about how it is used for commercial purposes. Fast-paced technological innovations—from wireless communications to security surveillance to commercial tracking to the Internet of Things—has outpaced U.S. privacy laws, leaving significant gaps in privacy protections for U.S. consumers. Consumer Action works with many coalitions and organizations to address issues of concern to consumer privacy, including medical privacy, data brokers, social media, security surveillance, Internet tracking, geo-location systems and facial recognition, to name a few.
Scams and frauds: Consumer Action works to educate consumers, the media and legislators on the latest in scams and frauds, particularly through our free monthly SCAM GRAM e-newsletter. We actively monitor the fraudulent schemes discovered by regulators and the news media and participate in a variety of legislative efforts that, for example, stop data breaches that jeopardize consumer information, thereby making consumers vulnerable to ID theft and financial crimes; ensure that the U.S. Department of Justice can “choke off” access to bank payments for entities that are defrauding consumers; and protect consumers from pyramid schemes.
Student loans: Student loan borrowers must not be misled when it comes to the legitimacy of schools and the value of the degrees they offer, their career prospects upon graduation or the terms of their student loans. Consumer Action supports federal efforts to end the unfair special bankruptcy treatment for lenders who saddle students and their families with high-risk, high-cost private student loans. In particular, we support strong federal gainful employment regulations (in effect as of January 2017) and defense to repayment rules because we believe that fraudulent, poor performing for-profit programs should lose eligibility for federal funding. (Gainful employment rules ensure that schools provide students with adequate credentials for jobs that are actually available.) We also believe that private student loans should be eligible for income-based repayment programs and loan forgiveness for public service. Finally, we support and help advise federal regulators in their efforts to create a user-friendly, effective student loan complaint system and to provide borrowers with a personalized guide to student loan repayment options.
Telephones (wireless and landline) and internet: In these challenging economic times, Consumer Action works to ensure that telephone and internet services remain understandable, accessible and affordable for low- and moderate-income families. We help protect critical national programs like Lifeline, which subsidizes phone and internet services for low-income consumers (who need help paying their phone bills). As such, we strongly oppose any legislation that would pose a risk to the Lifeline program (either by slashing its budget, adding language that would make certain populations ineligible for the program or removing coverage for widely-used telecommunication mediums like mobile voice). Consumer Action also is an active member of multiple national coalitions that help guide the Federal Trade Commission and Federal Communications Commission in creating sensible regulations and enforcement actions to protect consumers from unwanted robocalls and texts, broadband and telephone privacy violations, and abusive data caps and zero rating plans that violate net neutrality.
Television and cable: Consumer Action wants consumers to enjoy freedom and choice when it comes to cable and satellite TV services. Unfortunately, pay-TV providers have been opposing sensible rules that would curb leasing fees for set-top boxes and rein in pricey cable bundles (that include channels many TV viewers do not want). Cable companies, which often sell their packages for monthly prices that top $200, are also allowed to tack on leasing fees of an average of $231 per family, per year. Consumer Action supports a Federal Communications Commission (FCC) proposed rule to allow the sale of equipment that consumers could buy for a one-time price from any vendor they choose. Consumer Action, acting as a member of the Consumer Video Choice Coalition, has been an important influence in the FCC’s decision-making process, promoting policies that would liberate consumers from the set-top box monopoly, lower prices and create more choice and opportunity for small and/or independent programmers looking to grow their audiences.
(Note: Revised Jan. 10, 2017.)
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