We call on the conferees to reject special-interest demands to remove or weaken key provisions of the bill, so that the final legislation sent to the president truly protects America’s children.

Our investigative reporter allies over at the Center for Public Integrity have a new report documenting a massive increase in influence-peddling by the pharmaceutical lobby (Big PhRMA). Excerpt:

Washington's largest lobby, the pharmaceutical industry, racked up another banner year on Capitol Hill in 2007, backed by a record $168 million lobbying effort, according to a Center for Public Integrity analysis of federal lobbying data. Among the industry's successes: getting two controversial laws extended and thwarting congressional efforts to restrict media ads for prescription drugs. The spending represents a 32 percent jump over 2006.

From a news release on a new report by PIRG Higher Education Advocate Luke Swarthout:

According to a new report by the U.S. Public Interest Research Group, first year college students starting this fall can expect to save several thousand dollars on their student loans under new interest rate changes beginning on July 1st. The report, Cutting Interest Rates, Lowering Student Debt Updated, finds that average four-year college student starting school in 2008 with subsidized Stafford loans will save about $2,570 over the life of his or her loans. The interest rate changes are the result of the College Cost Reduction and Access Act of 2007, passed last summer and signed into law by the President in September.

Today, PIRGs around the country released our new report Squandering the Stimulus: Average American Households Spent Economic Stimulus on Gas. It's part of our campaign to promote mass transit spending increases to reduce the heavy negative impacts of our car and gasoline based transportation system. I joined staff attorney Shana Becker and NCPIRG outreach staff at their release in Raleigh today in front of the Moore Square transit center (photo). From the national release:

Without sufficient alternatives to driving, American families spent their entire economic stimulus check on high-priced gas. According to new analysis from the U.S. Public Interest Research Group, since President Bush signed the tax rebates into law on February 13th, the average household spent over $1500 filling their tanks. Gas costs were higher than average in areas without robust public transportation.

On Thursday, the US House of Representatives will vote on a bill to approve additional funding for public transportation as an alternative to high gas prices. "If Congress wants to do something long-term about high gas prices, it will give people more alternatives to driving," said US PIRG staff attorney John Krieger, "Unless we make it easier to drive less, American families will be stuck in neutral as they spend more and more at the pump."

Yesterday the Center for Responsible Lending released its latest report on unfair bounce protection loans-- the banks prefer the term "courtesy overdraft." The CRL report Security Threat reinforces the harsh findings of the AARP report that bankruptcy hits older Americans hard (previous blog). So do unfair bank fees. From CRL:

...as banks raise their overdraft fees and make it easier to hit their account holders with multiple charges, we release findings on how unauthorized overdrafts strip fees from Americans 55 and older at the level of $4.5 billion per year. Nearly $1 billion of that comes from people who are heavily dependent on Social Security income.

AARP's research arm has released a report -- Generations of Struggle -- written by three of the nation's leading academic scholars on bankruptcy.

Their findings reveal grim news for older adults. The rate of bankruptcy filings among those ages 65 and older has more than doubled since 1991, and the average age for filing bankruptcy has increased. Other important findings are:

Americans age 55 or older have experienced the sharpest increase in bankruptcy filings.

Americans age 34 or younger have experienced the greatest decrease in bankruptcy filings.

The influence of Baby Boomers on bankruptcy filings has moderated substantially.

Our colleagues at the Center for Health, Environment and Justice (CHEJ) have a new report -- Volatile Vinyl -- the new Shower Curtain's Chemical Smell. That link goes to a site with a variety of materials in addition to the report and news release. Excerpt from the release:

Results from a two-phase study released today by the Center for Health, Environment & Justice, a non-profit organization dedicated to preventing environmental health harms caused by chemical threats, show that shower curtains made with polyvinyl chloride (PVC) plastic contain many harmful chemicals including volatile organic compounds (VOCs), phthalates and organotins; these PVC shower curtains are potentially toxic to the health of consumers. Vinyl shower curtains and shower curtain liners release chemicals into the home that are most easily identified by that "new shower curtain smell" and are routinely sold at major retail outlets.

Consumers should avoid purchasing shower curtains made with PVC, and should not buy shower curtains that are not labeled with their content. "The new shower curtain smell may be toxic to your health," said Michael Schade, report co-author and CHEJ PVC Campaign Coordinator. "The good news is that families can take simple steps to protect their health by avoiding shower curtains made with PVC and choosing healthier products."

Today the FCC held a hearing on cell phone early termination fees. At least two witnesses Pam Gilbert, an attorney representing California consumers and Pat Pearlman, a West Virginia state government consumer advocate representing the National Association of State Utility Consumer Advocates (NASUCA), cited our authoritative 2005 Locked In A Cell report. It describes the results of a nationwide survey of consumer opinion against these penalty fees of $150-200 or more that prevent you from switching cell service when you have shoddy service. The ETFs, of course, therefore allow the wireless providers to offer shoddy service, since you happen to be ... locked in a cell phone contract.

What is truly incredible and outrageous is that FCC Chairman Kevin Martin didn't hold this hearing in response to the pleas of the thousands of consumers who complain to the FCC about ETFs each year. He held the hearing in response to requests from a few powerful wireless companies that have asked him to enact a federal rule to protect them from consumers. The federal proposal Tom Tauke of Verizon and other special interest lobbyists back would have the effect of releasing the telcos from the liability they face if ETFs are held to be illegal and unconscionable under state law in several pending lawsuits. The real question is how far will Martin go in his last few months as chairman? Will he actually push for a vote to provide the telcos with an industry safe-harbor federal regulation that retroactively immunizes them from the liability they face for harms they have already caused millions of consumers? That is a bold step.

More and more, the Bush Administration appears to be a one-stop shopping center for companies seeking relief from strong state consumer laws. Previous blog.

Maryland PIRG has a new report: Toxic Baby Furniture: The Latest Case for Making Products Safe from the Start. From the Baltimore Sun story High levels of formaldehyde found in baby furniture by Dennis O'Brien:

The testing was conducted by Berkeley Analytical Associates, an environmental testing firm in Richmond, Calif. "If anything, their calculations are on the conservative side," said Thad Godish, an environmental management professor at Ball State University who was not involved in the report. Newborns and toddlers are more sensitive than adults to formaldehyde in cabinetry and other wood-finished furniture, he said, but cribs may be where babies are the most exposed.

Also today, the New York Times features Answers About Mass Transit from Gene Russianoff, longtime senior attorney for both NYPIRG and its highly-successful subway riders advocacy group, the Straphangers Campaign. From Gene:

You’ve pointed out one of the key challenges and tensions facing the transit system: Can New York afford to expand and still do the necessary repairs to the existing system? The Straphangers Campaign has always cast its lot with the latter, a subway that has 468 subway stations, 6,200 subway cars, 4,500 buses, hundreds of miles of track and tunnel lighting. That's the priority. Having said that, there are strong arguments for moving ahead on a handful of "mega" projects like the Second Avenue Subway, which would move hundreds of thousands of people the day it opens, as well as "decongest" several other lines. It would be great if our elected officials came up with the funding to do both. We will find out in the coming months.

The House and Senate have now passed PIRG-backed legislation (our release) ending what our tax and budget attorney John Krieger has correctly called a "disgraceful" scam of setting up off-shore shell corporations to avoid paying the Medicare and Social Security benefits of thousands of Americans working in Iraq. From the Boston Globe story Senate OK's bill barring contractors from avoiding tax by Farah Stockman:

KBR appears to be the largest offender in Iraq, but others also use the practice. In March, one other major defense contractor in Iraq surveyed by the Globe acknowledged using the practice. But subsequent investigations found that MPRI, a Virginia-based contractor, hires about 400 Americans through a subsidiary based in Bermuda. DynCorp International, a defense giant, employs 750 to 1,000 American police trainers in Iraq through a wholly owned subsidiary based in a tax-free zone in the United Arab Emirates. A DynCorp recruitment advertisement for those police training positions states that "no federal income or Social Security taxes are withheld" from their $134,110 annual salaries.

"By reining in tax-dodging private contractors who use gimmicks to avoid their basic responsibilities, this Congress chose good governance and accountability over cronyism and favoritism," said tax and budget attorney John Krieger of U.S. PIRG.

Update 2: Here's a very nice Medill News video of the stroller event. It features an interview with Linda Ginzel. She and her husband Boaz Keysar founded Kids In Danger after their 16 month son Danny Keysar was killed -- ten years ago this week -- when a dangerous and previously-recalled portable crib collapsed around him. Both the House and Senate bills include a section known as The Danny Keysar Child Product Safety Notification Act -- on improving recall notifications and crib and durable product safety.

Update: Link to U.S. PIRG testimony yesterday.
Join us Thursday at 10am for a Stroller Rally urging final passage of the strongest possible CPSC reform bill, currently in a House/Senate conference negotiation.

10 am. Upper Senate Park on Constitution Ave between New Jersey and Delaware Avenues, Washington, D.C. Bring the kids (downloadable flyer).

Wal-Mart Stores Inc., the world's largest toy seller, has ordered its suppliers to meet a new set of children's-product safety requirements by this fall that goes far beyond existing government regulations.
The standards include strict limits for lead and a broad array of other heavy metals and chemicals that have been linked to various medical and developmental problems in children.

Below the jump find our full coalition news release (see previous blog) on a proposed rule to ban some of the worst, but not all, of the unfair and deceptive practices that credit card companies and banks have used punitively against consumers, as proposed by the Fed and two other regulators yesterday:

Among other things, the regulators would stop many unjustified interest rate hikes on existing balances, prohibit the charging of interest on debt already paid off and require issuers to allocate cardholder payments more fairly.

FOR IMMEDIATE RELEASE
May 2, 2008
CONTACT:
Travis Plunkett, CFA, 202-387-6121
Lauren Saunders, NCLC, 202-452-6252
Ruth Susswein, Consumer Action, 301-718-2511
Tonya Aquino, SEIU, 202-730-7119
Ed Mierzwinski, USPIRG, 202-546-9707
Jeannine Kenney, Consumers Union, 202-462-6262

BANKING REGULATORS TARGET CREDIT CARD ABUSES
Rules Take Positive First Step to Rein in Unjust Interest Rate Hikes and Billing Practices;
Groups Call on Congress to Provide Additional Consumer Protections

Representatives of national consumer organizations today applauded federal banking regulators for proposing initial rules to curb some abusive credit card lending practices. The groups also called on Congress to provide additional consumer protections not proposed by the regulators. The proposal was offered today by the Federal Reserve Board, the Office of Thrift Supervision and the National Credit Union Administration. Among other things, the regulators would stop many unjustified interest rate hikes on existing balances, prohibit the charging of interest on debt already paid off and require issuers to allocate cardholder payments more fairly.

"We commend federal regulators for taking an important first step to stop credit card companies from pumping up their profits by using hidden traps and tricks that drive up the amount of debt consumers owe," said Travis B. Plunkett, legislative director of the Consumer Federation of America. "We urge Congress to focus on enacting a permanent law that curbs abusive practices not addressed in this proposal."

"Card companies have been playing costly games with the economic well-being of consumers for too long," said Jeannine Kenney, policy analyst with Consumers Union. "This proposal at least begins to give cardholders a fair shake."

The proposal would prohibit or restrict a number of abusive credit card practices:

a. Costly and unjustified retroactive interest rate increases. The proposal would prohibit the widespread practice of charging higher interest rates on balances incurred before a rate increase went into effect, unless the cardholder is more than 30 days late in paying his or her credit card bill. Although the proposal would not prohibit card issuers from raising rates because of a supposed problem with another creditor or a drop in cardholders' credit scores (a practice often called "universal default"), forbidding issuers from applying higher rates to existing charges should discourage credit card companies from unjustifiably increasing cardholders' interest rates in many cases.

"This proposal will make the rules of play fairer by making it harder for the credit card companies to raise rates on existing balances," said Kathleen Keest, senior policy counsel for the Center for Responsible Lending.

a. Hidden payment allocation methods that cause debts to escalate. Credit card issuers would be required to more fairly apply the payments that cardholders make to balances with different interest rates. When consumers transfer balances with low, short-term "teaser" rates (that have higher rates for new purchases), issuers would be required to apply payments first to higher rate debt. For consumers who take out cash advances that have higher interest rates, credit card companies would have to apply part, but not all, of a payment above the minimum amount to the higher rate debt.

"The rules should put a crimp on the bait-and-switch deceptions that turn low introductory rates into high rate balances," said Lauren Saunders, managing attorney of the Washington office of the National Consumer Law Center. "However, the rules do less to protect consumers who use the cash advance checks pushed on them and are then socked with a 20 percent rate on a balance they are not allowed to pay off, even when they make more than the minimum payment."

a. Interest charges on debts that have already been paid. The proposal would forbid "double cycle billing," which results in cardholders paying interest on debts paid off the previous month during the grace period.

b. Excessive fees for low-credit cards. The proposal would forbid credit card companies that target consumers with poor credit histories from charging fees that amount to more than half of the credit being offered. If the fees being charged to use the card amount to more than one-quarter of the credit line, cardholders would be allowed to pay these fees off over a one-year period.

"The federal regulators have gotten the message from consumers that the banks are using unfair practices to make bad money on top of good money," said U.S. PIRG consumer program director Ed Mierzwinski. "These rules will ban some of the unfair tactics that hurt American families."

"The proposed regulations are a clear effort to correct some of the most harmful and costly credit card practices such as retroactive rate hikes," said Ruth Susswein, deputy director of national priorities for Consumer Action. "We look forward to encouraging regulators to dig deeper to protect consumers from penalty rate increases across the board."

"These rules begin to undo the damage done by decades of deregulation in the credit card market and will help to rectify the balance of power between borrower and lender," said Caleb A. Gibson, advocacy and legislative coordinator at Dçmos.

Congress is considering a number of reforms that would address practices not targeted by these proposed rules:

a. Aggressive lending to young consumers. Requiring credit card companies to consider the ability of consumers under the age of 21 to repay the loans they are offered and allowing them to affirmatively choose whether to receive credit card solicitations.

b. Excessive and growing penalty fees. Requiring that penalty fees be reasonably related to the costs that credit card issuers incur because of a late or over-limit transgression.

c. Outrageous interest rate hikes. Limiting "penalty" interest rate increases to 7 percent above the previous rate if the consumer fails, for instance, to make a payment on time, or imposing penalty rate increases only on future purchases.

d. Repeat over-limit fees. Allowing over-limit fees to be charged only once, unless additional charges increase balances above the account limit.

e. Fees for paying a bill. Prohibiting card issuers from charging a fee to allow consumers to pay a bill by telephone, on the internet or by mail.

f. Unilateral changes in terms. Prohibiting card issuers from altering credit card agreements while they are in force without specific written consent from the cardholder.

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We spoke today at Chairman Chris Dodd of the Senate Banking Committee's news event announcing the introduction of the Credit CARD Act (previous blog). Senator Dodd was joined by 4 Senators -- Senators Carl Levin (D-MI), Bob Menendez (D-NJ), Claire McCaskill (D-MO) and Jon Tester (D-MT) -- and by Professor Elizabeth Warren of Harvard Law School, as well as by leading consumer groups and labor organizations. Here is Senator Dodd's release and statements of support from Senators, Representatives and groups, including U.S. PIRG. Here is a summary of the bill, which should be available tomorrow. The little camera-phone flash was somewhat overwhelmed by the klieg lights of the Senate Banking Committee hearing room, but the photo shows Senator Dodd at the microphone, with Professor Warren behind him and Senator Levin at right. Our letter of support to Senator Dodd. In addition to the bill's strict prohibitions on unfair consumer practices, the bill includes a study of the unfair interchange fees imposed on merchants. See previous blog (last paragraph) for more on interchange fees.

We've released a companion white paper to our March report, The Campus Credit Card Trap. That report surveyed 1500 college students on their use of and attitude toward credit cards. It also discussed our Truthaboutcredit.org's campus credit card marketing principles. The new white paper, Characteristics of Fair Campus Credit Cards, outlines our view of the "fair" characteristics that credit cards suitable for marketing to students should have. It also reiterates that the cards, with fair fees, terms and conditions, also need to be marketed according to our principles: no free gifts, no sharing of student lists with credit card companies, etc.

For Immediate Release:
Contact: Ed Mierzwinski, Consumer Program Director, 202-546-9707

Treasury Proposal: Home Run for Wall Street, Strike Out for Main Street, Stealth Attack on Consumer Protections

Statement of U.S. PIRG Consumer Program Director Ed Mierzwinski

The goal should be to protect consumers and investors, not take advantage of a crisis to re-organize in a manner preferred by and beneficial to powerful interests. If we do that, Secretary Paulson's blueprint is a home run for Wall Street and a strikeout for Main Street.

Today's 212-page blueprint from the Treasury Department to reform financial regulation may include some good ideas, but it is largely a re-hashed, unsubstantiated industry wish-list that seeks to eliminate state enforcement authority over insurance, securities and other financial products, without even guaranteeing strong consumer protection at the federal level.

Congress needs to move forward with efforts to restore investor and consumer confidence in the financial markets before it considers this package. Congress also needs to take swift action to protect communities from the wave of foreclosures occurring today.

Further, the public needs to understand that the problems we face today aren't the fault of consumer protection laws, and aren't the fault of multiple state regulators.

We have problems today because the current federal regulators -- led by the Fed and Treasury -- allowed big, already-federally supervised institutions to play with dangerous products that no regulator understood. Those derivative instruments didn't spread risk, they acted as accelerants.

When Congress does take up this package, which includes some items worthy of review, we intend to demand stronger consumer protection and privacy laws, as well as greater safety and soundness protections. We also believe that the financial regulatory system benefits from shared state and federal duties. While the multiplicity of federal regulators has encouraged charter-shopping and a race to the bottom, state enforcers have often buttressed limited federal resources and, in many cases, responded more quickly to emerging threats.

It's Opening Day and it will be a long season. We look forward to an opportunity to present the case for reform that helps Main Street consumers and investors, too.

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Here are statements from the North American Securities Administrators Association and the Consumer Federation of America.

We've just released a major report on campus credit card marketing. The Campus Credit Card Trap is based on over 1500 surveys collected from students at 40 campuses in 14 states. More info is here at truthaboutcredit.org. In addition to the detailed survey results, we include links to documents in two important areas:

This study is an in-person survey of a diverse sample of over 1500 students, primarily single undergraduates, at 40 large and small schools and universities in 14 states around the country conducted between October 2007 and February 2008. It analyzes how students pay for their education, how many use and how they use credit cards and, as an important goal of the survey, their attitudes toward credit card marketing on campus and whether or not they support principles to rein in credit card marketing on campus.

The findings confirm that students are using credit cards in significant numbers and that a significant number are paying the price through late fees, high balances and delinquencies. The findings also show that banks are marketing aggressively to students through a variety of channels. Finally, the findings demonstrate that an overwhelmingly majority of students support limits on credit card marketing on campus to rein in unfair bank practices.

Along with asking colleges to adopt fair credit card marketing principles, we're conducting FEESA (sounds like VISA) credit card counter-marketing campaigns on colleges around the nation. We hand out financial education literature and "don't be a sucker" lollipops, not sandwiches, t-shirts, cash-back or iPod Shuffles. And, we don't require a completed application.

Our colleagues from NYPIRG's Straphangers Campaign, led by Gene Russianoff, have released their latest Subway Shmutz report ranking the cleanliness of New York City subway lines. Stay off the E and the Q. From the New York Times story A Survey of the Cleanest, and Dirtiest, Subway Trains in New York City by William Neuman:

Wet, sticky spots on the train floor, chicken bones, nut shells, spilled coffee, hot dogs and "lots and lots of rolling bottles" often greet subway passengers who travel on the E and the Q trains -- rated the dirtiest lines in the New York City subway system in the latest survey by a rider advocacy group.

Today U.S. PIRG staff attorney John Krieger and Washington, DC Mayor Adrian Fenty released our new report A Better Way To Go. That's Mayor Fenty speaking, in hat, with John to his immediate picture left, along with other transit and public officials. They're standing in front of the Eastern Market Metro Orange/Blue Line stop a few blocks from our Capitol Hill offices. The chart far camera right describes a possible extension/branch of the Metro Orange Line to Dulles Airport through the traffic quagmire known as Tysons Corner. Here is the news release. The national report uses the Dulles example and those of a variety of other local projects around the country to demonstrate the benefits of reinvesting in public transit to save oil and provide other benefits to the ecoonomy.

"Americans are spending more money at the pumps, more time stuck in traffic, and more resources looking for solutions to our addiction to oil," said US PIRG staff attorney John Krieger. "This report data shows that our country needs federal investment in popular projects like the Dulles Extension in order to meet our country’s long-term transportation needs."

Earlier this evening the Senate passed on a 79-13 vote (consumer vote is yea) a comprehensive version of S. 2663, the CPSC Reform Act. Here is a link to the consumer coalition news release commending the bi-partisan bill.

While a managers' amendment resolving differences and accepting some amendments without votes did tinker around the edges of the state Attorney General enforcement, lead and whistleblower protection provisions, the final bill includes all the core provisions we had going onto the floor. And, the final bill adds several provisions:

Once the Senate soundly defeated the DeMint (R-SC) amendment to simply substitute the narrower House bill, the air went out of the National Association of Manufacturers' attempts to weaken this important reauthorization of the CPSC. They'll patch and pump that balloon back up for the conference committee negotiations, but we'll be there, too. Here's an excerpt from our release followed by one from the Senate bi-partisan sponsors.

Excerpt from consumer news release commending the bi-partisan bill:

The Consumer Product Safety Reform Act, S. 2663 as passed, will do the following: increase CPSC's budget over the next seven years to $155 million; create a consumer database of product hazard information to better help consumers make informed purchasing decisions; make the industry's voluntary toy safety standards mandatory, ensuring that all toys are tested to comprehensive criteria; establish third-party, pre-market testing of children's products; increase the current limit on CPSC's civil penalties to $10 million for most violations, and cap it at $20 million for "aggravating circumstances;" give State Attorneys General tools to better protect their residents; lower lead levels in children's products; and protect CPSC staff and private-sector employees who blow the whistle on wrongdoing.

The groups acknowledge the importance of marrying the strong reforms of the Senate bill with key provisions in the House product safety bill passed in December. In particular, the groups point to the Senate's provisions addressing the public database, State AG enforcement and whistleblower protections. The groups will urge conferees to keep these provisions, while also adopting a critical House measure that ensures product testing of more children's products by defining such products as those designed for children under 12 years of age. The Senate bill covers products designed for children under seven years of age.

"The CPSC is crippled under budget restraints, mounting imports and thousands of new products entering the marketplace. As a result, we've seen endless recalls and unnecessary deaths and injuries," Pryor said. "My legislation allows parents and the CPSC to fight back against the tide of dangerous toys and products. It provides new safety safeguards that emphasize resources, accountability, disclosure and testing -- from the factory floor to the store shelves. I appreciate the broad, bipartisan support behind this bill and will work toward swift conference action in order to produce a solid, aggressive bill for President Bush to sign."

"I thank Senator Pryor and Senator Stevens for their leadership in negotiating this bipartisan compromise bill. S. 2663 authorizes the appropriate level of resources and provides the new authorities necessary for the agency to do the job it was created to do: protect consumers," Inouye said. "Children are dying and suffering grievous injuries because of unsafe products. This legislation directly addresses the weaknesses of our nation’s product safety system and is a good step forward in our effort to keep harmful products off of store shelves."

"This important legislation will provide the Consumer Product Safety Commission with the tools needed to better protect American consumers," said Stevens. "The measure sends a strong message that when it comes to our children, safety comes first. I am especially pleased that the bill includes my provision to protect users of all-terrain vehicles by requiring both domestic and foreign ATV companies to comply with the same basic safety standards and sales practices."

"Toy safety has made a giant leap forward with the Senate's approval of this bipartisan bill to strengthen the federal Consumer Product Safety Commission. This bill will help the federal government better detect and prevent threats to our children before, not after, toys reach store shelves," said Collins.

Senate Majority Leader Harry Reid (D-NV) filed a cloture petition preparatory to bringing the CPSC Reform Act (now numbered S. 2663) to the Senate floor next week. A procedural vote known as a cloture vote or motion to proceed (60 yeas required) is scheduled for 5:30 pm Monday.

Meanwhile, we've joined other leading consumer groups in a release rebutting a 10-point memo (more of a screed actually) attacking the bill that was issued by the office of Senator Jim DeMint (R-SC), a member of the Senate Commerce Committee. Since his committee held a number of hearings, we'd expect a better understanding of the bill's intent and scope. Conversely, the ranking Republican and co-chair of the Committee, Senator Ted Stevens (R-Alaska) is a co-sponsor of the bill.

We're supporting all strengthening amendments, and of course opposing efforts to gut or delay this important product safety reform bill. From our release today:

Consumer, Safety Groups Call Foul on False Attacks on Product Safety Reform Bill-- Groups rebut charges; bill will be considered in the Senate beginning on Monday

(Washington, DC) -- Consumer, public interest, safety, and scientific groups today condemned false charges from the office of Sen. Jim DeMint, released through the Republican Steering Committee, against a Senate bill that would overhaul the ailing Consumer Product Safety Commission, and urged Senators to approve the measure -- without weakening amendments -- when it is slated to come up for a vote next week.

As part of its campaign for a smokefree Wisconsin, Wisconsin PIRG has released a new study finding that smokefree laws and ordinances do not harm businesses. According to the report Smoke and Mirrors: Tobacco Industry Claims Unfounded:

There is no reliable, independent scientific evidence to support...claims...that jobs will be lost in the hospitality industry and bars will go out of business.

Update: Here's a detailed story by consumer reporter Michael Sorkin of the St. Louis Post Dispatch.

We joined Public Citizen in a news conference today (all documents are here, including my press statement) commenting on a recent class action settlement benefiting purchasers of Sears stoves prone to tip-overs. The New York Times has a story.

As I pointed out in my remarks, one year ago, U.S. PIRG and the Consumer Federation of America asked the CPSC what it was doing about the 26 known deaths and 75 known injuries, mostly to children and the elderly, since 1980, caused by top-heavy stoves tipping over. When we received no satisfactory answer, PIRG and CFA joined Public Citizen in a news conference last April.

This is a good settlement that recovers compensation for consumers, improves product safety (by compensating consumers for necessary bracket installation) and deters other companies from making stoves prone to tipping. It demonstrates why we need to maintain the rights of consumers (and state attorneys general) to enforce laws. We do still need a stove and furniture standard that will force firms to make bookcases, TV tables and stoves that are inherently stable. That will be a matter for the new CPSC leadership.

I also pointed out in my statement that, bizarrely, last month the CPSC did recall a Sears stove -- a play stove -- that tipped over. Didn't kill anyone, like the real stoves that they haven't recalled have. You couldn't make this stuff up, it writes itself.

We spoke today at a news conference announcing the delivery of 125,000 postcards urging Congress to kiss credit card abuses goodbye. Speakers included Rep. Carolyn Maloney (D-NY), who chairs the key House subcommittee with jurisdiction over unfair credit practices, along with Reps. Mark Udall (D-CO), Keith Ellison (D-MN) and Lincoln Davis (D-TN). They are among the now 61 sponsors of the Credit Cardholders Bill of Rights Act, HR 5244, introduced last week by Rep. Maloney, pictured above surrounded by boxes of postcards (in my first published camera-phone shot. Note: We'll try to remember the real digital camera in the future). Also speaking were Jeanine Kenney of Consumers Union, Travis Plunkett of Consumer Federation of America and Stephen Lerner of SEIU.

The event was organized by Jeanine and Consumers Union, which along with SEIU, collected 120,000 cards from members. We went out to some of our lists and added 5,000 more in a day. The first hearing on the bill is scheduled for March 13. From the CU/CFA/SEIU release:

In mid-January, Bank of America reportedly sent notices of steep rate hikes to many of its cardholders. The move has prompted protests from consumers who face rate hikes even though they're in good standing with Bank of America.

A 2006 report by the General Accounting Office (GAO) found that credit card fees have risen much faster than inflation and that late fees were assessed on 35 percent of all credit card accounts in 2005. That year, the six largest credit card issuers collected $7.4 billion in penalty fees from cardholders that made late payments or exceeded their credit limit. The GAO concluded that current fee disclosures are difficult to understand, bury important information, and often fail to convey to cardholders when late fees would be charged and what actions could result in penalty interest rates.

We've issued a news release with the Consumer Federation of America and the National Consumer Law Center critiquing last week's IRS actions on privacy and predatory lending. Here is the lede from our release:

Consumer group representatives condemned new taxpayer "un-privacy" rules recently issued by the IRS for expanding rather than closing "gaping loopholes" that already allow sharing and marketing based on tax records, but issued cautious support for a separate IRS request for comments on developing new regulations that could rein in the marketing of predatory refund anticipation loans by tax preparers. On the same day that it issued its weak final privacy rule, the IRS asked for comments on developing rules restricting the sharing of tax return information to market refund anticipation loans, refund checks, audit insurance and other high cost products typically sold to low income taxpayers.

CALPIRG has released a new report documenting that companies are failing to provide consumers with details required by state law about their uses and sharing of non-public personal information. This information, which includes Social Security Numbers, enables identity theft if it falls into the wrong hands.

California's consumers are "Still in the Dark" when it comes to who has access to their personal information [...]Only about one-third (33 percent) of survey participants reported receiving a response consistent with the terms of the "Shine the Light" law.

Ann Brown, CPSC chair under Bill Clinton, has joined Florida PIRG's Brad Ashwell in a column Congress must address the trouble in toyland running in Florida newspapers:

And we must allow state legislatures and state attorneys general to help police the product safety marketplace. We need 51 consumer cops on the beat, not just one. Congress must listen to the American families who have stopped buying toys because they've lost confidence in their safety. The best gift Congress can give America's littlest consumers this year is to better protect them from dangerous toys.

Today the House passed its version of CPSC reform on a 407-0 vote. Excerpt from our joint statement with other leading consumer groups:

We appreciate the hard work that has gone into crafting H.R. 4040, the Consumer Product Safety Modernization Act, and thank the House Energy and Commerce Committee and the House Leadership for their prompt action today. Our current product safety system is in dire need of comprehensive reform, and this bill represents the first concrete effort to help protect consumers while addressing industry concerns.[...]We also commend both houses for the anticipated final passage later today of provisions in the Omnibus package providing CPSC with an $80 million budget for FY08 -- $17 million more than the Commission received last year, and $16.75 million than the Administration's request.

The Senate will not act on its CPSC bill, S 2045, this year. Senator Mark Pryor (D-AR), our lead Senate sponsor, has pledged early action in 2008. Nevertheless, the increase in CPSC appropriations to $80 million is a major holiday present for America's littlest consumers. That will become law as soon as the president signs the omnibus package.

The House bill reauthorizes the CPSC for three years, increases its civil penalty authority to $10 million, lowers allowable lead levels in children's products significantly and requires testing of all children's products subject to mandatory rules.

Our support for the House bill was tempered by the fact that the Senate Commerce Committee-passed bill was significantly stronger although we expect it to be modified and weakened in floor negotiations. Nevertheless, the House did get to the goal line first. Measures that are stronger in the Senate bill include the following: higher civil penalties for wrongdoers, better limits on secrecy of CPSC information, stronger language on preemption and attorney general enforcement and higher funding authorization for CPSC.

Key provisions that only appear in the Senate bill include a provision extending new testing requirements to all toys, including those under voluntary standards (such as small magnets and strangulation hazards) and a new provision protecting whistleblowers.

The House bill includes a provision requiring third party testing of infant and durable products (such as cribs); the Senate bill does not.

The FCC has several votes scheduled today on matters of public importance. The biggest is whether it will impose regulation on the behemoth cable industry under the 1984 rule known as 70/70. The PIRG-backed Media-Democracy Coalition is urging a yes vote on that proposal and also urging that the FCC protect the future viability of community-owned low power FM radio stations (our release). The key swing vote is longtime consumer champion Jonathan Adelstein.

From the story FCC Could Extend Reach To Cable TV by Frank Ahrens in the Washington Post.

A vote could begin a process resulting in a national cap on cable ownership, with no cable company allowed to have more than 30 percent of all U.S. subscribers, a ceiling that Comcast Communications is near. It could also reduce prices that cable companies could charge smaller or independent programmers to lease access on unused channels. The FCC has the authority to impose such regulations only if 70 percent of all U.S. households are able to subscribe to a cable service with at least 36 channels and if 70 percent of those households subscribe to such service. The first threshold was crossed years ago; nearly all U.S. homes are now "passed" by cable, to use the industry term.

PIRGs released the 22nd annual Trouble In Toyland report and annual survey of toy hazards including dangerous small magnets, choking hazards and lead-laden toys at 75 news events today. We had one piece of jewelry that weighed in at 65% lead by weight, or over one thousand times legal limits. That's NYPIRG's Tracy Shelton at her event (AP photo). You can download our full report, our Toy Tips brochure and our news release at toysafety.net. Here's an excerpt from the release:

U.S. PIRG called on Congress to pass the strongest possible product safety reforms under consideration:

-Ban lead except at trace amounts. The PIRG-backed HR 3691, the SAFE Consumer Product Act, sponsored by Rep. DeLauro (Conn.)and 153 co-sponsors, would reduce all lead levels – in paint or in the product -- to 40 parts per million -- the level recommended by the American Academy of Pediatrics.

-Increase the budget and staffing of CPSC. CPSC has only one toy tester and a tiny force of 15 inspectors to check millions of toys at hundreds of ports of entry.

-Require companies to guarantee that their products have been subject to independent third party testing before they put them on toy store shelves.

"It doesn't matter whether a toy is made in China or made in Kansas," said Mierzwinski. "Companies have to make sure that it is safe."

Mierzwinski noted that two other bills, the CSPC Reform Act, S 2045 (Pryor-AR), which is ready for Senate floor action, and the Consumer Product Safety Modernization Act, HR 4040 (Rush-IL, Stearns-FL, Dingell-MI, Barton-TX), which is awaiting full Energy and Commerce committee action after Thanksgiving, are "good steps that include many of our proposed reforms, but should be improved in several areas."

We've joined the Center for Digital Democracy in a supplement filed today at the FTC to our November 2006 complaint on Internet privacy and behavioral targeting. Here is the news release. Excerpt from the release:

In connection with today's FTC Town Hall meeting, "Ehavioral Advertising: Tracking, Targeting, and Technology," the two groups filed a 74-page supplemental statement in support of the formal complaint they filed last year which identified new technology designed to aggressively track Internet users and create data profiles used in personalized "one-to-one" targeting schemes. "Over the past 12 months, new tracking and targeting technologies have escalated the attack on personal privacy online. As our report documents, online marketers are creating digital dossiers on individual consumers ('behavioral profiling'), so they can be tracked when surfing the Web, watching a broadband video, or using their mobile phone," explained Jeff Chester, executive director of the CDD.

"The new business models of the Internet and mobile commerce can stimulate the economy and offer consumers choices," observed Ed Mierzwinski, Consumer Program Director of U.S. PIRG, "but unless the FTC steps in now and sets some basic rules for privacy protection, the costs to consumers posed by so-called behavioral targeting, the manipulation of both surfing and price choices, and the 24/7 corporate surveillance and dossier-building will easily outweigh any supposed benefits to consumers."

Today, both U.S. PIRG staff attorney Amina Fazlullah and The Center for Digital Democracy's Jeff Chester are featured panelists at the opening day of the FTC's 2-day Town Hall on Behavioral Targeting and Internet Advertising. Watch this space. At 9 am we will post the latest update to our fall 2006 CDD/U.S. PIRG complaint to the FTC outlining the scope of threats to privacy and consumer well-being posed by the Internet's unchained and unregulated search/advertising business model. Many trace the origins of this town hall to the issues we raised one year ago.

Two weeks ago California governor Arnold Schwarzenegger signed legislation to make California the first state in the country to ban the use of phthalates in children's products. The legislation was a big victory for Environment California, the new home of CALPIRG's environmental work:

"When a child puts a phthalate-laden teether in her mouth, it’s like sucking on a toxic lollypop," said Rachel Gibson, Staff Attorney for Environment California. Phthalates have been shown to interfere with the natural functioning of the hormone system. These toxic chemicals have been linked to reproductive problems, early onset of puberty, liver and thyroid damage, and testicular cancer.

U.S. PIRG's Gary Kalman released a new report yesterday documenting that serious fraud and previous failure are no impediments for beltway bandits lining up for new government contracts at the taxpayer-funded trough.

The report, Forgiving Fraud and Failure: Profiles in Federal Contracting, highlights nine representative examples of new, often no-bid contracts that were granted to companies with recent records of questionable performance. U.S. PIRG Education Fund report cites secretive practices, lax oversight, weak rules and lack of competition for the problems uncovered by the study.

In each of the cases profiled, companies received new contracts during or shortly after having negotiated settlements in cases of poor performance. In several instances, contracts were actually awarded with less competition after problems surfaced than before.

Last night the Senate approved the FDA drug safety bill passed by the House the day before. The bill achieves 4 of PIRG's five priorities going into the process, according to my colleague Paul Brown, who worked the bill full-time for the last 9 months. The bill provides for transparency of clinical trial results, improves conflict of interest rules, increases FDA's civil penalty authority and transfers $225 million of drug company user fees to post-market safety reviews.

Our fifth priority, strict regulation of direct-to-consumer advertising, was largely scuttled (except for certain fines if ads are misleading) due to an alliance between drug companies and the media and advertising industry (we're shocked, shocked!), as reported in Media Industry Helped Drug Firms Fight Ad Restraints (pd. subs. req'd) in today's Wall Street Journal, but nevertheless passage of this new law with four priorities in strong shape is still a major victory for consumers. Previous blog. Because the bill also extends the user fee program for new drug approval for five years, big PhRMA is also for it, so the President will sign it. Our champions, including Senator Ted Kennedy (D-MA) and Reps. Frank Pallone (D-NJ) and Henry Waxman (D-CA) and others deserve great credit for keeping so many consumer provisions in the package.

[At the end of this post is a release "The CPSC: The Little Agency That Couldn't." PIRG put it out at the first hearing yesterday.] In testimony today before the House Energy and Commerce Committee, Dana Best, MD of the American Academy of Pediatrics (AAP) recommended that lead limits for "all products intended for use by or in connection with children" be set to allow exposure to no more than trace amounts of lead:

The Academy recommends defining a "trace" amount of lead as no more than 40 ppm, which is the upper range of lead in uncontaminated soil.

She is finally asking Congress for help. It's about time. From AP:

Leaders of the agency responsible for protecting consumers from faulty products said Wednesday that Congress should increase their budget and power in the wake of huge recalls of lead-contaminated toys..."Our small agency has been ignored by the Congress and the public for way too long," said the acting chairman, Nancy A. Nord. "Our laboratory desperately needs to be modernized."

The CPSC: The Little Agency That Couldn't

"Information obtained by committee investigators that retailers have not informed the public of numerous lead hazards in children’s toys and products is not surprising. The CPSC law is so weak