Fourteen of the largest public packaged food and beverage companies still use the controversial chemical bisphenol A (BPA) in their packaging, according to the new report Seeking Safer Packaging by two investor groups, Green Century Capital Management and As You Sow. This chart ranks the firms contacted for the study.

Our expert, Public Health Advocate Liz Hitchcock, joined the groups in releasing the report:

“With the packaged food industry continuing to expose consumers to this toxic chemical, Congress must take action to ban the use of bisphenol A in food and beverage containers,” said U.S. PIRG Public Health Advocate Liz Hitchcock, a report reviewer. “America’s kids can’t wait any longer for the industry to act.”

Studies have linked the synthetic sex hormone to developmental problems, heart disease and diabetes. The report examined 20 publicly traded companies’ use of BPA. According to Green Century and As You Sow, companies that continue to use BPA in food and beverage packaging face competitive, reputational, and potential market exclusion risks.

In 1991, many of the PIRGs were founders of Green Century. Its mission is to provide people who care about a clean, healthy planet the opportunity to use the clout of their investment dollars to encourage environmentally responsible corporate behavior.

Paying for What Works: A U.S. PIRG Policy Primer on Health Care, finds that the U.S. could save $299 billion with an innovative, coordinated approach to health care. Here is an excerpt from the primer by U.S. PIRG's Larry McNeely, released this week:

The total premium cost for employer-sponsored family health insurance has doubled in less than ten years, and may double again by 2016. In the face of high-cost premiums, both large employers and small businesses face tough choices: shoulder greater costs and potentially harm their competitiveness, pass on large increases on to employees who aren’t equipped to pay them, or reduce coverage.

[...] Americans might accept these rising costs if their health care dollars were purchasing quality care on which they could depend. Instead, today’s health care system is undermining family physicians’ and other primary care providers’ ability to provide quality, personalized care to American families. [...] Over the first few months of 2009, these twin crises of cost and quality have helped generate an unprecedented breadth of support for reform. [...] This policy primer is intended to help meet that challenge. It examines seven factors which have led to the interrelated crises in cost and quality, and prescribes specific policy remedies to tame costs and restore health professionals’ ability to provide the care on which American families rely.

Last week, on Tax Day, U.S. PIRG released Tax Shell Game: The Taxpayer Cost of Offshore Corporate Tax Havens (news release). The cover is at left. The report (full report pdf) illustrates how 83 of the 100 biggest corporations in America dodge taxes by maintaining foreign subsidiaries in off-shore locations. The report by Tax and Budget Reform Advocate Nicole Tichon documents that the cost of these tax shelters is $100 billion and lists the cost by state. Keith Olbermann did a nice piece on the report. You can watch it on our tax loophole page. Olbermann disparages competing teabag protests cooked up by coin-operated front groups and promoted by Fox News before explaining our report:

As handfuls of sheep possibly wearing LED vests, as seen earlier in Oddball, are herded into made for TV protests of taxation with representation, the US Public Interest Research Group (PIRG) has now analyzed a Senate report from last year that showed just how much we lose as a nation in tax revenues hidden by corporations...

Those who support tax havens typically argue that American corporations are already taxed enough or too much. But, whatever one thinks is the proper rate of corporate taxation, there should not be a parallel shadow system of tax avoidance that leaves other taxpayers shouldering the burden. Markets work best when companies prosper based on their productivity and ability to innovate, not on their access to sophisticated tax lawyers and to tax-avoidance schemes.

[Ohio] Activists plan to hand out “wish you were here” post cards from the Cayman Islands, which they describe as “a prominent corporate tax shelter.”

Check out last night's two-part interview Jon Stewart of The Daily Show did with Harvard Professor Elizabeth Warren, head of the Congressional Oversight Panel (COP) on the TARP (Wall Street bailout). He's got some Daily Show humor, of course, but at the end I think you'll agree with Jon that Elizabeth Warren's recipe for financial re-regulation is "financial chicken soup" and you'll feel better, too. Here's a detailed summary from Sam Stein over at HuffPo.

On Tuesday, the COP holds a hearing with Tim Geithner, Treasury Secretary and distributor of TARP funds. I am sure Professor Warren will be asking Geithner: "So, on Thursday the papers reported that Lending By Bailout Recipients Falls Again (Washington Post) -- by 24% no less. What's up with that?"

Last week the New York Times editorialized against legislation, HR 1214, the so-called Payday Loan Reform Act, introduced by Rep. Luis Gutierrez (D-IL) (previous blog). Well, last night, Stephen Colbert took it apart on his TV comedy show, where he said that the bill would subject triple-digit payday lenders to the "anemic firefly flicker of nominal oversight." Warning: at least one joke in the piece may not be family-friendly, but neither is the bill, HR 1214. It legalizes predatory payday loans on a national basis at 390% APR for a two week loan, 780% APR for a one week loan. Also, the Arizona Star editorialized this weekend against both HR 1214 and another even more pro-payday lender bill, HR 1846, the Consumer Lending Education And Reform Act from Rep. Joe Baca (D-CA).

The film "Broadcast Blues" by Sue Wilson and Public Interest Pictures has won the "Environmental Vision" award at the Sacramento Film Festival. The film opens with a scene on the Minot, ND toxic chemical cloud fiasco that was not reported to the public in a timely manner because emergency personnel could not reach real people at 6 of the town's 7 radio stations, all owned and remotely robotically controlled by Clear Channel Communications. As Sue Wilson explains in her blog:

"Environmental", for a movie about media, you say? Don't forget, media influences every aspect of our lives. When the media weights the few scientists who are funded by oil companies who discount climate change as being equal with the many scientists who are peer reviewed and factually back up climate change, we the people lose. The environment loses. But the broadcasters win, because it is cheap and easy to set up those kinds of arguments and pretend they are telling both sides of the story. Cheap and easy means more profits, but less credible information.

it is "a documentary lamenting the erosion of the contrasting-views concept in the wake of deregulation and media conglomerates [... that] maintains that corporate ownership of (overwhelmingly conservative) talk-radio stations hinders real political discourse and that fewer locally owned stations means less stewardship of decency standards and emergency broadcast systems and fewer opportunities for listeners to lodge complaints locally."

The CPSC (release) has imposed a $1.1 million civil penalty on Mega Brands America, formerly Rose Art, to settle allegations that the firm "failed to provide the government with timely information about dangers to children with Magnetix magnetic building sets, as required under federal law." This penalty for a serious violation is based on pre-2008 law. The CPSC's release shows that had the threat of civil penalties been greater (neither the CPSC's enforcement stance nor the maximum penalty deterred Rose Art/Mega Brands), thereby causing the company to comply with the notification elements of the law, perhaps one death and as many as 25 dangerous intestinal surgeries of small children might have been avoided.

CPSC learned through the subpoena that at the time Rose Art filed its “initial report” in December 2005, it had received over 1,100 consumer complaints that magnets had fallen out of plastic pieces from dozens of different Magnetix models. Additionally, the subpoena revealed that Rose Art had received at least one report of an injury due to magnet ingestion, prior to the toddler’s death in Washington state.

In my Senate testimony during the leadup to passage of the landmark 2008 Consumer Product Safety Commission Improvement Act, I referred to the problem that the CPSC also had essentially allowed Rose Art/Mega Brands to conduct a "replacement" program or a "non-recall recall," that left dangerous products on the shelves. That was due to weak recall authority that should be corrected now that we are post-CPSIA. More on the Rose Art fiasco history in this blog.

Bob Hunter of the Consumer Federation of America and Birny Birnbaum of the Center for Economic Justice -- the nation's leading insurance consumer advocates -- have sent a sharply worded letter to members of the National Association of Insurance Commissioners (NAIC) urging them to reject a proposal they will consider later this week to deregulate auto and homeowners insurance and slash protections for consumers. Hunter, an actuary, is a former Texas and federal insurance commissioner; Birnbaum, an economist, was his associate commissioner in Texas. From the letter from Hunter and Birnbaum:

The NAIC jumped on the deregulation bandwagon in 2000 with its plan for modernizing insurance regulation that featured Speed to Market -- ways for insurers to get their products to markets sooner in part from less regulatory oversight. There was never any consumer demand for insurers bringing products to markets sooner or for insurers bringing ever more complicated and confusing products to market. It is time for the NAIC to acknowledge that Speed to Market should follow -- not replace -- careful regulatory oversight.

“It is astonishing that the states would consider a proposal to deregulate auto and home insurance at a time when even Alan Greenspan has recognized the failure of weak government oversight of the financial services industry” said J. Robert Hunter, Director of Insurance for CFA and former Texas Insurance Commissioner and Federal Insurance Administrator.

“Americans, struggling to make ends meet, need increased, not reduced insurance price protection by the states, especially if they are required by law or by lenders to purchase auto or home insurance,” he said. “State insurance commissioners defend state-based insurance regulation by claiming they are tuned in to local markets and consumer issues. But, the paper and recommendations represent a startling lack of understanding by regulators of the problems insurance consumers face today when buying auto or homeowners insurance,” said Birny Birnbaum, executive director of CEJ.

Great news. New FTC Chair Jon Leibowitz has selected constitutional scholar and consumer advocate David Vladeck to head the FTC Bureau of Consumer Protection. David's been teaching at Georgetown Law for a while and before that was a longtime public interest attorney at Public Citizen. This is great news for consumers who want a fair marketplace and bad news for corporate criminals and those who support lax enforcement of the consumer laws. I will do a longer blog from a real computer. -- From the Blackberry, in Baltimore.

U.S. PIRG is participating today at a conference Beyond the Credit Crisis: Financial Institution Regulation for the 21st Century, at the University of Baltimore School of Law. I speak on the second panel (agenda). My remarks will be based on the Call To Action for real financial reform recently issued by U.S. PIRG and 130 civil society organizations.

Just as we are disappointed that some of our Congressional consumer champions are supporting legislation that would protect predatory payday lenders, we are also disappointed that the great Magic Johnson is fronting for a tax refund anticipation loan company, Jackson-Hewitt. Here is Don McNay's piece last week in the Huffington Post:

There is no reason for tax refund anticipation loans to exist. The industry targets a poor audience, charges high fees and provides a "service" that is not really a service. People wait all year for a tax refund. They can wait another two weeks or so.[...]It's easy to eliminate an industry with a dubious business model and a laundry list of regulatory violations. It's harder to eliminate a business where Magic Johnson is its public face. Because of Johnson, the tax refund business might stick around, luring in more millions of Americans. Although I admire his place in basketball history, it's now hard for me to think of Johnson as a magic man.

The non-profit, independent American Antitrust Institute has issued a white paper by James Hurwitz agreeing with our views that the Ticketmaster/Live Nation merger should be rejected by the U.S. Department of Justice. Excerpt:

Regardless of how the primary sales market is defined, the combination of Ticketmaster and Live Nation would create an overwhelmingly dominant entity. The discussion considers two other attributes of the proposed transaction that make it even more problematic. First, one of the chief concerns raised by the merger is that Live Nation Entertainment would be a vertically integrated enterprise with dominance or substantial power on six market levels. The new entity would therefore be able to use its strengths in some markets as leverage to gain customers or compliance in others. Moreover, this vertical integration would effectively frustrate new entry, because as a practical matter it would require firms seeking to compete seriously against Live Nation Entertainment to enter the industry on several levels at once. The second factor is that the merged entity would likely enjoy market power not just as a seller but also as a buyer.

Over at USA Today, Kathy Chu has a story Average college credit card debt rises with fees, tuition on a Sallie Mae study to be released today. Her lede:

As college costs soar, students are charging more educational expenses to plastic, helping boost credit card debt to record levels. A new study to be released Monday by Sallie Mae, a college-financing company, finds that the average undergraduate carried $3,173 in credit card debt last year, the highest level since Sallie Mae began collecting this data in 1998. In 2004, the last time the study was done, students carried an average of $2,169 in card debt.

A growing number of Connecticut lawmakers are calling for more regulations on how companies market credit cards at colleges. A legislative committee has unanimously endorsed a bill that would bar companies from soliciting undergraduates during class registration or using gifts and other application incentives.

Today's New York Times editorial 391 Percent Payday Loan explains the problem with legislation proposed by U.S. Rep. Luis Gutierrez (D-IL), the new chair of an important Congressional subcommittee:

Payday loans — advances that are to be repaid on payday — are so burdensome and so pernicious that in 2006 Congress effectively banned them for military families. Given all the problems workers face right now, Congress should extend this protection to everybody. Unfortunately, some members are pushing an ersatz reform that would allow payday operators to charge what amounts to an annual percentage rate of 391 percent.

According to the story Bailed-Out Banks Face Probe Over Fee Hikes in today's Wall Street Journal (pd. subs. may be req'd), Professor Elizabeth Warren and her Congressional Oversight Panel are investigating

"instances of potentially inappropriate lending by banks that got taxpayer capital. "The people who are subsidizing the activities of the banks through their tax dollars are the same people who are furnishing the high profits through consumer lending," Ms. Warren said in an interview. "In a sense, we're asking taxpayers to pay twice.""

Since the Troubled Asset Relief Program was launched last October, banks bolstered by capital infusions have boosted charges on a wide range of routine transactions, hiked rates on credit cards and continued making loans criticized as predatory by consumer advocates. The TARP funds are intended to open lending spigots and make it easier for people to borrow money.

Last week, on a chilly day, over 350 advocates for the blind and others with print disabilities held a protest in front of the Author's Guild in New York City over the authors' demand that speech software on the Kindle 2 e-book reader be turned off to preserve authors' rights to royalties from selling "books on tape" products that they read themselves. Amazon, the Kindle's maker/seller, has capitulated to the authors. The authors want the blind to submit to a special registration process where they would pay a fee and would be granted a license to turn the robotic reader software back on. They claim the Kindle 2 otherwise violates copyright laws. Fair use experts say "not true." We agree with advocates for the blind and others with reading disabilities that the authors are wrong on the law and wrong to pick this fight and that Amazon took the wrong side.

I've seen numerous reports on the net about the power of the event (Jamie Love chronicles numerous stories in the Huffington Post, Manon Ress at the Knowledge Ecology International (KEI) blogs with many photos (including the one in this post), an Electronic Frontier Foundation (EFF) report with numerous photos, Cory Doctorow posts at BoingBoing, Greg Sandoval writes at CNET, John Mahoney writes at Gizmodo, etc. From Manon Ress:

In a world where paying consumers can download a book and start reading it and where there exists a technology that allows people with reading disabilities to do the same, turning off text to speech is a brutal act of segregation. Why is it an unacceptable form of censorship? Because if authors and publishers can decide who reads, when and how, it is censorship. It is against the free flow of information that they claim to believe in.

You can sign the Reading Rights Coalition petition in favor of fair use. Excerpt from the preamble:

Sadly, the Authors Guild does not support equal access for us. The Guild has told us that to read their books with text-to-speech we must either submit to a special registration system (that not all may qualify for and that would expose disability information to all future eBook reader manufacturers) and prove our disabilities -- or pay extra. The Guild’s position is contrary to the principle of equal opportunity for all and discriminates against millions of people with print disabilities.

NYPIRG, with the Center for Medical Consumers, has a new report The Price Is Not Right: A Review of New York's Prescription Drug Pricing Website. From the Associated Press via Forbes:

A new report says a state Web site designed to help consumers shop around for the least expensive medication offers inconsistent pricing information, with wild cost differences on the same drugs in different pharmacies.

Yesterday the Congressional Oversight Panel on the Wall Street bailout released its latest report: Assessing Treasury’s Strategy: Six Months of TARP (that link is to a 151 page pdf, a news release is also available).

The total value of all direct spending, loans and guarantees provided to date in conjunction with the financial stability efforts (including those of the FDIC as well as the Treasury and the Federal Reserve) now exceeds $4 trillion. This report reviews in considerable detail specific criteria for evaluating the impact of these programs on financial markets.

The new report Too Small To Help from our colleague Deanna Loonin at the National Consumer Law Center has troubling news for student loan borrowers:

The federal government and lenders must do more to help borrowers struggling to pay back expensive private student loans. [...] The annual volume of new private student loans soared over the past decade to exceed $19 billion, as college tuitions grew, grant aid stagnated, and the government set limits on its loans.

I got some calls yesterday from consumers in good standing with Bank of America but were having their credit card rates jacked for no reason. I told them what I told Jane Kim at the Wall Street Journal (pd. subs. may be req'd):

The banks "want to mess with people before they can't, [...] Every day they can earn income at a higher interest rate is more profits for them."

"Current interest rate is 9.99%. BoA is raising my interest rate as of 5/09 to 15.74% with no explanation to me as to why I’m being penalized. I am opting out of this increase, and will pay down my balance, and then put the card in a drawer and not use it again, until such time I can renegotiate a better rate with them."

Along with over 130 consumer, labor, civil rights, community and responsible investing organizations, U.S. PIRG and the state PIRGs have urged the Obama administration and all members of Congress to base financial reform legislation on the recommendations of the Special Report on Regulatory Reform issued by the Congressional Oversight Panel. We are following up the Call with meetings on the hill and administration from representatives of the broad civil society signers of the "Call to Action." Excerpt:

In the face of a full-blown global economic crisis, bold action is needed now by leaders in Congress, the Administration and the federal government to repair our nation’s broken financial system, establish integrity in the financial markets, and facilitate productive economic activity that benefits all segments of our communities. It is only in doing these things that we can meaningfully address the public’s shattered confidence in the fairness of the financial marketplace and establish a healthy, robust and productive economy.

The good news is that a framework for the needed financial services regulatory reform already is in front of us: the “Special Report on Regulatory Reform,” released on January 29, 2009, by the Congressional Oversight Panel identifies the key principles essential for meaningful financial reform. Chaired by Professor Elizabeth Warren, the Panel was established by Congress to monitor the bailout and to help ensure that aid to the financial sector is accompanied by meaningful market reforms. The January report concluded that “the present regulatory system has failed to effectively manage risk, require sufficient transparency and ensure fair dealings.”

It proposes principles calling for reforms to:

more closely regulate financial institutions that pose systemic risk;

limit excessive leverage in key financial institutions;

increase supervision of the shadow financial system;

create a new system for federal and state regulation of mortgages and other consumer credit products;

put in place executive pay structures that discourage excessive risk taking;

reform the credit rating system;

establish a global financial regulatory floor; and

start planning now for dealing with the next crisis.

You're probably tired of hearing about the tedious campaign that the big toy and chemical industries, cleverly fronted by small "bidness" organizations, are running against the landmark Consumer Product Safety Improvement Act of 2008 (CSPIA). Heck, they even had a 2-hour press conference last week (on April Fool's Day, no less) that they managed to call a "rally." But if you want some good updates about what is wrong with the "facts" behind their campaign, one place to look is over at the Pop Tort blog run by our colleagues at the Center for Justice and Democracy up in NYC. Pop Tort is worth checking out-- they also regularly comment on other important civil justice and consumer safety issues. Excerpt from another Pop Tort blog, quoting a Consumers Union analysis:

Some who spoke at today’s rally, including Toy Industry Association President Carter Keithley, claimed that there are no health impacts from lead in toys. Others who spoke suggested that adult clothing was covered by the law, which is not the case. The lead testing restrictions apply only to children’s products.

Over at the American News Project, videographer Harry Hanbury has been chronicling the influence of money on politics. In particular, he's been watchdogging financial industry battles, including the fight to make credit cards fair. In this piece on last week's committee votes for reform he interviews Travis Plunkett of the Consumer Federation of America, Ken Clayton of the American Bankers Association and me. My closing comment is that banks want to delay the bills so that they keep collecting penalty fees because "they want that money."
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In the song Choctaw Bingo, by the alt-country singer James McMurtry, the character Uncle Slayton is a rogue and an outlaw who cooks both moonshine and crystal meth. Mcmurtry sings:

"He cooks that crystal meth because the shine don't sell; You know he likes his money, he don't mind the smell."

While I often blog on unfair consumer practices or products that threaten consumer health and safety, U.S. PIRG also seeks to protect taxpayer wallets by ensuring that government budget and spending policies make sense. In this National Journal experts' blog on transportation issues, one of U.S. PIRG's tax and budget experts, Phineas Baxandall, gets the last word (scroll down) in a debate on road privatization:

The notion that the next transportation bill will bring more private financing has taken on an air of inevitability. Elected officials have little incentive to question the truism. It gives people something to say about where additional money might come from without taking political heat for mentioning new taxes or fees. But upfront money for privatized roads is not akin to money falling from trees.[...]Congress will need to scratch beneath the surface of benign-sounding terms such as “innovative finance” and “public-private partnerships” (PPPs). We should remember that sub-prime mortgages and derivatives are also innovative finance. The troubled Freddie Mac and Frannie Mae are also PPPs. It should give us pause when Jim Chanos, an early critic of Enron, warns in Fortune magazine that Macquarie, the world’s largest private road operator’s financial practices bear “the hallmarks of a Ponzi scheme.”

Update: Progress Illinois has posted some (5 minutes each or so) Youtube video excerpts of last week's hearing. In this one, Jean Ann spars with Chairman Gutierrez (D-IL) on payday lending and his bill's effect; in this one, Jean Ann and Rep. Jackie Speier (D-CA) discuss why the Gutierrez bill won't work as advertised.

Original post: For many years, Jean Ann Fox of the Consumer Federation of America has led the nationwide fight against predatory triple-digit payday lending that leaves consumers in an endless cycle of debt. On Thursday, a House subcommittee led by Rep. Luis Gutierrez (D-IL), largely took the side of the payday lending industry against her at a hearing where Fox was the only consumer witness. Chairman Gutierrez has introduced HR 1214, the so-called Payday Lending Reform Act, to legalize predatory payday lending at an allowable 391% interest rate (APR). You can read the testimony and watch the hearing video here. Heck, the hearing was so embarrassingly one-sided, even the rent-to-own boys who sell furniture on perpetual debt contracts liked it. Along with other leading groups we signed onto Fox's testimony and will oppose all efforts to legalize triple-digit payday lending at the federal level. In a letter to the hill, our groups called the Gutierrez bill the Payday Lender Protection Act. Consumers are urged to contact their Representative (find them here and then either write them here or call any of them here 202-225-3121) to oppose HR 1214, the so-called Payday Loan Reform Act. It is really a Payday Lender Protection Act, not in any way a reform act; it will hurt working class Americans; and, we will continue to urge Mr. Gutierrez to drop efforts to pass it. In 2006, at the request of the Pentagon, Congress capped lending to military families at 36% APR to protect them from financial predators; now, some in Congress want to legalize loans at more than ten times that rate for the rest of us?

Predatory lending is very profitable. Recent stories in The Hill and by the Associated Press document the money that the payday firms are dumping into this push. In 2008 they spent tens of millions in Arizona and Ohio but were defeated. Oh, you may be confused by the stories and some testimony into thinking that the industry opposes the federal bill. Don't believe it. They have been for just about every bit of HR 1214 in the states, as Jean Ann explains.

The drug giant Pfizer is reported (Washington Post) to have reached a settlement with the Nigerian government over what had been a $9 billion criminal indictment due to the deaths of at least 11 children and injuries to many others in an allegedly illegal drug trial in 1996. The company tested the drug Trovan during a meningitis epidemic. If reports of a $75 million settlement (presumably with criminal claims dropped) are true, it appears the drug giant got off cheap--kids' lives, no matter where they live, are worth more that. Also, such a small settlement may not deter other alleged corporate wrongdoing. It is unclear what effect the settlement will have on other civil cases. From the Washington Post:

Trovan was never approved for use by American children. The Food and Drug Administration approved it for adults in 1998 but later severely restricted its use after reports of liver failure. The European Union banned the drug in 1999.

LAST NIGHT's POST: Nicole Tichon has released U.S. PIRG'S latest Bailout Briefing, describing the fiasco known as the TARP: Key finding: Six months, $565 billion, 24 hearings and 364 reports later, the American taxpayers still don’t know where their money has gone.

Meanwhile, on the Wall Street Journal website (pd. subs. req'd):

In January, the CBO pegged the ultimate cost to taxpayers of the $700 billion TARP at $189 billion. When the agency issued revised numbers in late March, it revised that to $356 billion, a change that drew little attention. The larger estimate reflects, among other things, the Treasury's move to use the TARP to help avoid foreclosures, as well as the changing details of its aid to American International Group Inc., and the deterioration of financial conditions and of banks in which the Treasury has invested TARP money.

Our tax dollars are backing the purchase of credit card debt by investors. The program is called the TALF, and it just lent $4.7 billion from the New York Federal Reserve Bank to unidentified investors [...] The NY Fed told Consumers Union that it would not release the names of the investors. The American Banker newspaper reported that the investment to be financed was “a $3 billion offering by Citigroup.” (Apparently the private investors in this credit card debt put up $200 million of their of their own money to go with the $2.8 billion in funds borrowed from the NY Fed.) Nice leverage there-- government $2.8 billion; private investors $200 million.

Ticketmaster Entertainment Inc. on Friday said it received demands for information from the U.S. Justice Department and other government agencies investigating the company's activities in reselling concert tickets.

We testify (that is, me) this afternoon at a hearing on Consumer Debt — Are Credit Cards Bankrupting Americans? The hearing is before the House Judiciary Committee's Subcommittee on Commercial and Administrative Law, chaired by Steve Cohen (D-TN). Here is my testimony. That of the other witnesses should be available at the committee site around 2pm. Adam Levitin is a law professor who has investigated these issues and blogs with a number of other professors expert in debt and bankruptcy over at creditslips.org. Consumer attorney Brett Weiss will speak on behalf of the National Association of Consumer Bankruptcy Attorneys. Its members represent individual consumers who file for bankruptcy. In 2005, draconian bankruptcy amendments enacted by Congress at the request of the credit card companies made it harder and more expensive to file for bankruptcy and if you did, harder to get a fresh start because the unfair new law forced you to make continuing payments of unsecured debts to credit card companies. Excerpt from my testimony after the jump.

Your hearing comes at an opportune time. Over the last several years, even after enactment of the draconian 2005 bankruptcy amendments insisted upon by an eight-year credit card industry campaign, the credit card companies have continued to engage in arbitrary, abusive, and unfair credit card lending practices that trap consumers in a cycle of costly debt, such as sharply escalating “universal default” interest rates that can double some cardholders monthly payments overnight. Put simply, owning a credit company is a license to steal. You can change the rules at any time for any reason, including no reason. Pernicious mandatory arbitration clauses prevent consumers from private enforcement against unfair practices. State attorneys general have been preempted by federal regulators from enforcing laws against national banks and thrifts—nearly every large credit card company is a national bank. Those federal regulators, until a recent burst of consumer protection activity by the Federal Reserve, have encouraged the increasing use of unfair practices through lax oversight. Since 2000, the Office of the Comptroller of the Currency (OCC), chief regulator of national banks, has not imposed one public civil penalty or other sanction against a large credit card company.

Considerable evidence links the rise in bankruptcy in recent years to the increase in consumer credit outstanding, and, in particular, to credit card debt. The problem has been exacerbated by the 2005 bankruptcy amendments, which have made it harder and more expensive to file for bankruptcy, leaving many consumers in the credit card company “sweat box,” despite no evidence that consumers are abusing the bankruptcy system. Consumers are hurt by credit card practices, but no longer have adequate relief. Congress should immediately reform credit card company practices and make changes to the bankruptcy code to provide relief to aggrieved consumers.

Along with other leading groups, we're joining onto critical testimony today by Jean Ann Fox of the Consumer Federation of America at a hearing of the House Financial Institutions and Consumer Credit Subcommittee. Unfortunately, our testimony happens to be in opposition to a proposal, HR 1214, by the subcommittee's chairman, Luis Gutierrez (D-IL) to legalize predatory payday lending at an allowable 391% interest rate (APR). Excerpt from our comprehensive testimony after the jump:

We oppose enacting legislation to sanction a predatory credit product that traps cash-strapped American families in a debt cycle of repeat borrowing. Congress outlawed these loans for Service members and their families in 2006 and should extend the same protections to all Americans. As American families struggle to make ends meet, protections against extremely expensive loans, unaffordable repayment terms, and loss of control of bank accounts are more important than ever. H.R. 1214 does not provide the protections that American consumers need or want.

AJ Connelly of the AP has a great story Rage against the corporate fee machine (via Bellingham Herald) explaining all the more-than-nickel-and-dime and a la carte fees being charged by corporations ranging from banks to airlines to cell phone companies. The story explains how these new and growing fees accomplish several corporate goals: first, the firms can deceive you into thinking the price has not gone up (but wait, there's less!); second, you can't shop around if you don't know the true cost, or do if you do shop around, you'll think they're the lowest (but they're not). She goes on to give tips on "20 fees and charges you can look to cut out, potentially saving hundreds of dollars a year."

My unfavorite new (to me, and I hear about a lot of fees) fee from her story: In addition to the outrageous price for peanuts or a coke or beer from the mini-bar in a hotel room, some hotels are also charging a $2.50 "re-stocking fee" for replacing the over-priced snack. That's truly nothing for something. It reminds me of Ticketmaster's online delivery fees. If you have fees you love to hate, let me know at ed [AT] pirg.org. Use the subject: Ripoff fee.

Someday, we'll be able to take comments directly on this blog.

From our colleagues at Flyersrights.org

FlyersRights Airport Express Lanes Open for Business
Airlines and TSA Reach Agreement with Airline Consumer Organization

Napa, CA. 04/01/2009: Kate Hanni, executive director of FlyersRights.org announced today that the airline consumer rights organization has reached an agreement with the Transportation Security Agency (TSA) and major U.S airlines that allows members of the organization to bypass security lines and airline gates, by driving their cars straight to their airplanes and having them unloaded by specially trained airline valets. (CONTINUES AFTER JUMP)

“All they have to do is show a special ID badge issued by the coalition”, said Ms. Hanni. Recipients of the badge must be members of the FlyersRights organization which they can do by signing the organization’s website petition at www.flyersrights.org, and pass a strict security background check. “After that, it’s clear sailing. We even have valets that will park their cars after they unload their baggage at the cargo areas near the planes”, Ms Hanni added.

Unfortunately, FlyersRights.org can’t guarantee what will happen after their members get onto the plane, or that the plane will actually go anywhere. “Congress has still not passed a law giving passengers the right to food, water, usable restrooms or the right to deplane after three hours”, said Ms. Hanni. “But we are making the flying experience a little more enjoyable with this new agreement”.

Spokesperson for the Air Transport Association, Magnum PeeWee said, “We reached this agreement with FlyersRight.org to prevent their members from mixing with the rest of the flying population.”

Officials from the U.S. Department of Transportation brokered the unlikely alliance in exchange for the coalition’s silence in regard to defective reporting of airline performance statistics. “We’ve agreed to look the other way”, said Ms. Hanni. “This is a sweet deal, and we’re available for any other quid pro quos that anyone else would like to offer .”

CAPBOR has over 24,000 members and is the largest non-profit airline passengers rights Coalition. For more information, contact Kate Hanni directly at Kate [AT] flyersrights.com

We've joined other groups in praising (our joint release) Senate Banking Committee approval yesterday of the Credit CARD Act championed by its chairman, Chris Dodd (D-CT) (his release). Narrower companion legislation, the Credit Cardholders' Bill of Rights, HR 627 (Carolyn Maloney-D-NY) was considered in the Financial Institutions and Consumer Credit subcommittee today and the final vote should occur tomorrow. Last year, the House overwhelmingly passed the Maloney bill, but this year too many members of the committee are listening to bank demands to delay it. Every day this bill to ban unfair practices is delayed is one more day that banks can cheat consumers. So, unfortunately, the committee approved, on a voice vote, a Maloney-opposed and PIRG-opposed amendment co-sponsored by new chair Luis Gutierrez (D-IL) and several others to delay implementation of the bill from its as-introduced 90 days after passage to either one year after passage or July 2010, whichever comes first, to comport the bill with the similar Fed rules. The change was also opposed by Rep. Jackie Speier (D-CA) who said (paraphrase) that "the credit card companies change rules on us overnight, we've asked the car companies to change their entire business model within 60 days, and we want to give the credit card companies another year after passage to make some changes?" We agree with Rep. Speier. As for the Dodd bill, it takes effect 9 months after enactment.

Previous blog on the credit card bills. Excerpt from our release on the Dodd bill below the jump:

“The CARD Act recognizes that credit card companies target unsuspecting college students for overpriced credit cards even when they don't have jobs or an ability to repay," said Ilicia Balaban of ConnPIRG. "The bill requires them to treat students like they are supposed to treat other consumers, fairly."

The Federal Reserve Board issued rules to stop unfair credit card practices, giving the industry until July 1, 2010, to implement the new practices. A number of major card issuers are now increasing fees and interest rates on millions of Americans before the new rules take effect. The House of Representatives passed legislation last year that was similar to the Federal Reserve Rules and is likely to do so again this year.

The Credit CARD Act has a number of protections that extend beyond those of the Federal Reserve rules and House legislation. It requires credit card companies to stop: