Few Changes for Consumers in 103Rd Congress

Few Changes for Consumers in 103rd Congress

Although there will be at least 121 NY), all of whom retired, and Rep. Weiss, the possibility of a positive legislative and the anti-consumer attacks of the last two new faces, including unprecedented who died. regulatory agenda on issues that affect con- administrations." numbers of women and minorities, the sumers' pocketbooks and their health and "We will know more what to expect once 103rd Congress is expected to vote much House and Senate Banking safety," he added. "While it is almost certain we see what kind of appointments Clinton like the 102nd when it comes to consumer Committees Change to be a moderate agenda, and the deficit makes, but, all in all, this should offer a issues. will limit our opportunities, we should new opportunity for pro-consumer reform," Most of the changes in membership re- Dramatically nonetheless see a major improvement over Kimmelman said. sulted from the record number of mem- One area where the election is expected bers who retired this year. But redistrict- to have a dramatic effect is in the make-up ing, the House Bank scandal, and a strong of the House and Senate Banking Commit- Successful CFA-Endorsed Candidates grassroots sentiment against politics as usual tees, which both saw a large number of also contributed, causing more incumbents members retire or lose their fight for SENATE MA: Rep. John Olver (D-01) to lose than have in recent elections. Among reelection. Rep. Richard E. Neal (D-02) CA: Rep. Barbara Boxer (D) them were eight House incumbents en- Five left the committee in the Senate, Rep. Barney Frank (D-04) dorsed by CFA. three through retirement and two through FL: Sen. Bob Graham (D) Rep. Edward J. Markey (D-07) But the slight loss of ground for con- defeat. In the House, 13 Banking Commit- IL: Carol Moseley-Braun (D) Rep. Joseph P. Kennedy II (D-08) sumers in the House was not expected tee members either retired or were de- Rep. Joe Moakley (D-09) MD: Sen. Barbara Mikulski (D) to cause a significant change in votes on feated. And still more changes could come Rep. Gerry E. Studds (D-10) consumer issues. And consumers held their if returning members request reassignment. ND: Rep. Byron Dorgan (D) MI: Bart Stupak (D-01) own in the Senate, where the two incum- The good news for consumers is that Rep. Dale E. Kildee (D-09) bents endorsed by CFA won, as did two most of those who are leaving have generally Rep. David E. Bonior (D-10) CFA-endorsed House members running for sided with industry in opposition to pro- HOUSE OF REPRESENTATIVES Rep. Sander M. Levin (D-12) open Senate seats and one non-incumbent consumer initiatives, particularly in the AL: Earl Hilliard (D-07) Rep. William D. Ford (D-13) open-seat candidate. House. Rep. John Conyers, Jr. (D-14) AZ: Rep. Ed Pastor (D-02) In addition, among the CFA-endorsed can- Also, Rep. Jim Leach (R-IA), who has re- Rep. Barbara-Rose Collins (D-15) didates who lost their Senate races was ceived special recognition from CFA for CA: Rep. Robert T. Matsui (D-05) MN: Rep. Bruce F. Vento (D-04) Rep. Jim Moody (D-WI), who was defeated his pro-consumer record on banking issues, Rep. George Miller (D-07) Rep. Martin Olav Sabo (D-05) in the primary by Russell D. Feingold. Fein- is next in line to take over as ranking Rep. Nancy Pelosi (D-08) Rep. Coilin C. Peterson (D-07) gold went on to defeat Republican Bob minority member. Rep. Ronald V. Dellums (D-09) Rep. James L. Oberstar (D-08) Kasten in the general election. Although Furthermore, in the Senate, Alphonse Rep. Tom Lantos (D-12) MO: Rep. Alan Wheat (D-05) he was not endorsed by CFA, Feingold is DAmato (R-NY) is expected to replace Gam Rep. Fortney "Pete" Stark (D-13) expected to be far more supportive on con- as ranking minority member. Though no Anna Eshoo (D-14) NJ: Rep. Frank Pallone (D-06) sumer issues than Kasten, who was the consumer champion, Sen. DAmato has been Rep. Don Edwards (D-16) Rep. Robert G. Torricelli (D-09) Senate's leading proponent of anti-consumer more supportive on consumer issues than Rep. Leon E. Panetta (D-17) Rep. Donald M. Payne (D-10) tort reform measures. Gam, and he is not the strong proponent Rep. Anthony C. Beilenson (D-24) NM: Rep. Bill Richardson (D-03) of financial restructuring proposals that Rep. Howard L. Berman (D-26) NY: Rep. George J. Hochbrueckner (D-01) Most CFA House Gam was. Rep. Henry A. Waxman (D-29) Rep. Gary L. Ackerman (D-05) Endorsees Win Rep. Matthew G. Martinez (D-31) Rep. Charles E. Schumer (D-09) Clinton Win Should Benefit Rep. Esteban Edward Torres (D-34) Rep. Edolphus Towns (D-10) nf th» i7n ^nriitifites endorsed by CFA Consumers Rep. Maxine Waters (D-35) Rep. Major R. Owens (D-ll) in the House, 96 won and 22 lost. In addi- Mayor Walter Tucker (D-37) Rep. Charles B. Rangel (D-15) tion, Rep. Matthew J. Rinaldo (H-NJ) retired,— Perhaps the biggest gain for consumers Robert Filner (D-50) Rep. Jose E. Serrano (D-16) and Rep. Ted Weiss (D-NY) died. in the 1992 election was Bill Clinton's vic- CO: Rep. Patricia Schroeder (D-01) Rep. Eliot L. Engel (D-17) Of the 96 successful candidates, 84 were tory in the presidential race. Although Clin- Rep. Nita M. Lowey (D-18) incumbents, and 12 were candidates for ton has been associated with the more CTTt Rep. Barbara B. Kennelly (D-01) Rep. Michael R. McNulty (D-21) open seats. As in the Senate, none of the conservative, pro-business wing of the Rep. Sam Gejdenson (D-02) Rep. Louise M. Slaughter (D-28) 11 challengers to anti-consumer candidates Democratic Party, he is nonetheless expected FL: Peter Deutsch (D-20) Rep. John J. LaFalce (D-29) managed to unseat their opponents. to be far more sympathetic to consumer Carrie Meek (D-17) OH: Rep. Marcy Kaptur (D-09) The eight CFA-endorsed candidates among concerns than either George Bush or Ronald Karen Thurman (D-05) Rep. Louis Stokes (D-ll) the 43 House incumbents to lose their seats Reagan. GA: Sherrod Brown (D-13) were: Rep. John W. Cox (D-IL); Rep. James CFA Legislative Director Gene Kimmelman Rep. John Lewis (D-05) Rep. Thomas C. Sawyer (D-14) Jontz (D-IN); Rep. Chester G. Atkins (D- outlined four positive changes that he ex- Cynthia McKinney (D-ll) Rep. James A. Traficant (D-17) MA), who lost in the primary; Rep. Gerry pects will fundamentally alter the legisla- HI: Rep. Neil Abercrombie (D-01) Sikorski (D-MN); Rep. Thomas J. Downey tive and regulatory environment for pro- Rep. Patsy T Mink (D-02) OK: Rep. Mike Synar (D-02) (D-NY); Rep. Stephen J. Solarz (D-NY), who consumer initiatives in a Clinton IL: Rep. Sidney R. Yates (D-09) OR: Rep. Ron Wyden (D-03) lost in the primary; Rep. Mary Rose Oakar administration. Rep. George E. Sangmeister (D-ll) Rep. Peter A. DeFazio (D-04) (D-OH), and Rep. Peter H. Kostmayer (D-PA). • The threat of a veto of reasonable con- Rep. Jerry Costello (D-12) PA: Rep. Thomas M. Foglietta (D-01) The defeat of Reps. Jontz and Sikorski sumer legislation has disappeared for the Rep. Lane Evans (D-17) Rep. Robert A. Borski (D-03) was a particular blow to consumers, as first time in 12 years. Rep. Glenn Poshard (D-19) Rep. William J. Coyne (D-14) both had been leaders on issues of concern • There is the possibility of administra- Rep. Richard J. Durbin (D-20) TX: Gene Green (D-29) to consumers, and both had compiled pro- tion muscle behind measures consumer VK Bernard Sanders (I-AL) consumer voting records that earned them advocates support. IN: Rep. Peter J. Visclosky (D-01) CFAs designation as Lifetime Consumer • There are unlikely to be administration Rep. Frank McCloskey (D-08) VA: Leslie Byrne (D-ll) Heroes. initiatives that are blatantly anti-consumer. ME: Rep. Thomas H. Andrews (D-01) WA: Rep. Jolene Unsoeld (D-03) Other Lifetime Consumer Heroes who • And, despite the limitations imposed MD: Rep. Benjamin L. Cardin (D-03) Rep. Jim McDermott (D-07) will be missing from the 103rd Congress by the deficit, there is likely to be a new Rep. Steny H. Hoyer (D-05) WV: Rep. Robert E. Wise (D-02) are Sen. Brock Adams (D-WA), Sen. Timothy energy at the regulatory agencies. Rep. Kweisi Mfume (D-07) WI: Rep. Gerald D. Kleczka (D-04) Wirth (D-CO), and Rep. James Scheuer (D- "For the first time in 12 years we have Rep. Constance A. Morella (R-08) Rep. David R. Obey (D-07)

CONSUMER FEDERATION OF AMERICA Page 2 November 1992 • CFAnews 1992 Legislative Wrap-up

of the bill's consumer protections were RTC Funding 'telecommunications D. Dingell (D-MI) succeeded in stopping the measure from coming to the floor. removed during Banking Committee con- The bailout of insolvent savings and loan sideration, however, making it considerably Cable Reregulation A staff draft of a bill with broad regula- associations ground to a virtual halt in 1992 tory protections for consumers, put together weaker than laws in several states. As a when Congress failed to pass additional In October, Congress overrode the presi- by Telecommunications and Finance Sub- result, consumer advocates opposed its funds for the Resolution Trust Corpora- dent's veto — the only successful override committee Chairman Edward J. Markey ID- passage with the preemption provision in- tion. The Senate barely passed a bill (S. in the 102nd Congress — and enacted legisla- MA), never was introduced. No action was tact. A companion bill in the Senate (S. 2482) in March to provide $43 billion more tion to lower cable television rates and pro- taken on narrower information services 2776) was not acted on. It also contained to the agency. Also in March, the House mote competition in the cable industry (RL. bills, including H.R. 3515, a strong pro- a provision to preempt stronger state laws. Banking Committee approved its own bill 102-385). By April, the Federal Communica- consumer measure introduced by Rep. Jim (H.R. 4241) to provide $43 billion to the tions Commission must establish reasonable Cooper (D-TN) and endorsed by CFA, and Regulatory Burden RTC. It also passed a bill to restore about rates for a basic tier of cahle service, uniform a weak bill introduced by W. J. "Billy" Tauzin $18 billion in funds appropriated in customer service! standards, and maximum (D-LA). The Senate never acted on a com- Senate legislation was introduced late in November 1991 that went unspent and prices for installation and the equipment panion to the Cooper bill (S. 2112). A 1991 the session to exempt approximately 70 reverted to the Treasury. Fearing the first used to receive basic service. Senate-passed bill (S. 173) to allow the Bell percent of the nation's banks — those with bill could not pass, the latter bill (H.R. 4704) Local franchising authorities will regulate telephone companies to design and manu- less than $100 million in assets — from was sent to the House floor. It was rejected rates according to federal guidelines. The facture telecommunications equipment, a number of important record-keeping re- overwhelmingly when a number of Demo- FCC also will be required to resolve which was opposed by consumer advocates, quirements, such as disclosure of their small crats refused to vote for the bill unless customers' complaints about unreasonable was never acted on in the House. business and small farm lending records. a majority of Republicans agreed to share rates for expanded tiers of service, with In addition, it would have delayed implemen- the political heat and give it their support. the exception of premium channels, and 900-Numbers, tation of truth-in-savings legislation for a can lower rates and order refunds where year and subjected deposits made at auto- it finds the complaints to be legitimate. Telemarketing Fraud matic teller machines to an additional day's Eventually, cable companies will be required At the end of the session, Congress cleared hold. Although the legislation was not acted Limited Partnership Rollups to offer premium channels without requir- for the president's signature a bill (H.R. on, several less drastic, but still anti- Late in the 1991 session, the House passed ing customers to purchase an expanded 6191) to address abuses in the 900-number consumer, "regulatory burden" provisions, legislation (H.R. 1885) to prevent abuses tier of service, Where competition exists industry. The president signed the measure including a three-month delay in implemen- — for example, where another cable or (P.L. 102-556) in October. It requires that tation of the truth-in-savings act, were at- of limited partners by general partners dur- satellite transmission company serves the callers be warned at the start of a call tached to uhe housing bill. ing limited partnership "rollups." Senate community — cable rates will not be of the costs and terms of the call. Callers Securities Subcommittee Chairman Chris- regulated. 'lb encourage competition, pro- will be able to hang up early and not incur topher J. Dodd (D-CT) attempted to pass grammers affiliated with cable operators a charge. Services aimed at children under Rule of 78s a weaker version of the bill (S. 1423), but are prohibited from discriminating against 12 are banned. Bills that would have re- Legislation was attached to the housing he was stopped repeatedly by the maneuver- cable's competitors, and local authorities quired the Federal Trade Commission to bill to prohibit the use of the Rule of 78s ings of Sen. Phil Gramm (R-TX). Rollups are barred from granting exclusive cable define and prohibit deceptive, fraudulent, in consumer loan transactions, but the are highly controversial reorganizations in franchises. and abusive telemarketing practices (S. 1392, measure only applies to loans with a term which two or more partnerships are rolled H.R. 3203) were passed by both houses, longer than 60 months. As a result, virtu- up into a single entity, typically losing money but they died when the House and Senate ally all auto loans, for example, will still for the limited partners while generating Bell Company Business were unable to work out their differences. be subject to the abusive practice. Rule lucrative fees for the general partners. The Restrictions of 78s is an outdated accounting method House bill, sponsored by Rep. Edward J. Markey (D-MA), would have given more Although several bills were introduced that allows lenders to charge a hidden pen- alty on prepayment/refinancing loan pack- rights and information to limited partners [■elated to regional Hell company entry into Financial Services who oppose the rollups. The Senate meas- information services, equipment manufac- ages by attributing a larger percentage of ure was similar, but contained far weaker turing, and long distance services, no legisla- early payments to paying off interest rather provisions related to dissenter's rights. tion was enacted In the 102nd Congress. Government Sponsored than principal than would occur under The House bill which came closest (H.R. Enterprises the actuarial method. 5096), sponsored by Judiciary Committee Just before adjourning, Congress passed Chairman Jack Brooks (DTX), would essen- legislation (H.R. 6094) to improve oversight Nationwide Branching Government Securities tially have codified the business restric- of the Federal National Mortgage Associa- Sen. Wendell Ford (D-KY) succeeded in In response to the Solomon Brothers bid- tions in the original AT&T breakup agree tion (Fannie Mae) and the Federal Home adding a measure to the Senate GSE bill rigging scandal, legislation was introduced meni. Bell companies seeking entry into Ixian Mortgage Corporation (Freddie Mac), to place a 15-month moratorium on inter- in both houses of Congress to improve these three service areas would have had which provide a secondary market for home state branching by federally chartered sav- regulation of the federal government securi- to get a Justice Department ruling thai mortgages. The measure was attached to ings and loan associations, but the provi- ties market. The Senate approved two they no longer possessed monopoly power the housing bill and cleared on the last sion was stripped from the final version modest bills — S. 1247 to reauthorize the that could thwart competition. day of the session. The president signed attached to the housing bill. The Office Government Securities Act and to give H.R. 5096 was approved by the House the bill in October. Although the final ver- of Thrift Supervision issued a final rule regulators new authority to set rules gov- Judiciary Committee in July, but Energy sion was stronger than the House bill passed earlier this year allowing such branching, erning sales practices in the government and Commerce Committee Chairman John in 1991 (H.R. 2900), it was still significantly bond market, and S. 1699 to clarify that weaker than consumer advocates had hoped despite numerous studies which show that the benefits of concentration have been fraudulent bids on Treasury bonds and lor. It creates a new regulator within the overstated while the anti-consumer effects other manipulative practices are violations Department of Housing and Urban Develop- are substantial. Bills to allow interstate of the Securities Exchange Act of 1934. ment to oversee Fannie and Freddie. The branching were introduced in both houses The House Energy and Commerce Com- two GSEs will have to meet risk-based (H.R. 4170, H.R. 4202, and S. 2207), but mittee passed companion legislation (H.R. capital, minimum capital, and critical capital CONSUMER FEDERATION OF AMERICA they were not acted on. 3927), which contained stronger provisions standards, lb ensure that the GSEs serve 14^4 18th Street, N.W Washington, D.C. 20036 on market surveillance and investor pro- (202) 387-6121 the mortgage needs of all income levels, tection. The bill was seriously weakened the new law also requires the Secretary President: Kenneth McEldmrney Investment Adviser in Banking Committee. Efforts to win floor Executive Director: Stephen limbeck of HUD to set specific goals for the GSEs Regulation passage of the stronger Energy and Com- lietfiMlative Director: Gene Klmmebnan to expand their commitment to providing Assistant Director: Ann U>\\vr merce Committee version failed, and the low and moderate income housing; hous- Both the House and Senate passed bills Research Director: Mark Cooper issue remained unresolved. Public Affairs Director: Jack Gillia ing in central cities, rural areas, and under- (H.R. 5726, S. 2266) to improve regulation Product Safety Director: Mary EUen list- served areas; and affordable housing for of investment advisers, but they were unable Coalition Coordinator: Diana \eidle to work out differences between the two Executive Assistant: Edith I'ursi low and very low income people. Conference Manager: Sheila Mcade measures before Congress adjourned. Both legislative Counsel: Bradley Stillirtan would have increased investment adviser McCarran-Ferguson Reform Administrator: Miguel Curpio Fair Credit Reporting registration fees in order to fund more Although a bill (H.R. 9) by Judiciary Chair- Secretary: Eydin Gnygan Administrative Assistant: Karen Edwards Sponsors of legislation to reform credit frequent inspections by the Securities and man Jack Brooks (D-TX) was readied for Administrative Assistant: Encarnitn Arguellcs reporting practices (H.R. 3596) pulled the Exchange Commission. The House bill went floor action in 1991, the House never voted CFAnews Editor: Barbara Hoper bill from the House floor in late September further, requiring the SEC to adopt im- on legislation to repeal some of the anti- after losing a close vote to delete the bill's proved oversight procedures and establish- trust exemptions granted the insurance in- CFAnews Is published sight times .1 year uinuaJ subscrip- tion rate is Si.', par war. provision preempting stronger state laws. ing far more expansive disclosure require- dustry under the McCarran-Ferguson Act. ©Copyright 1992 Iiv c uiisiiiuri' Federation of America. CFA The bill was intended to make it easier ments for investment advisers. The issue The Senate did not act on its bill (S. 430) should l>r iTi'ditt'd tor all material. All Mights Reserved for consumers to get access to their credit is expected to be taken up again in the introduced by Sen. Howard M. Metzen- Dstlgna i\|',->,i tq Dshlman/MtddourDesign reports and to correct errors. A number 103rd Congress. baum (D-OH) early in 1991. November 1992 • CFAnews Page 3

Indoor Air (Quality and six. The bill, as amended, also would Seafood Inspection discounters to get their cases before a jury. have required the agency to mandate warn- Comprehensive Legislation Senate proponents of a mandatory sea- In June of 1992, however, the House re- ing labels and to consider safer product food inspection program worked out the jected a conference report which was based Once again, the Senate passed compre- designs for five-gallon buckets, which have differences that have stalled efforts in largely on the stronger Senate bill, and hensive indoor air quality legislation (S. 455) been associated with infant drownings. previous years and introduced strong legis- the issue died for the 102nd Congress. in 1991, only to see a companion House Although consumer advocates supported lation (S. 2538) in 1992. The measure in- bill (H.R. 1066) bog down in three separate the small parts provision, they opposed cluded a comprehensive mandatory inspec- Energy and Utilities committees. The Senate bill included sup- the legislation because of its weak reau- tion program, inspection of fishing and pro- port for research, programs to deal with thorization and bucket provisions. The cessing vessels, sampling for chemical and National Energy Strategy, the most serious health threats, centralized Senate did not act on the measure. microbiological contamination, and whistle- authority in the Environmental Protection PUHCA Reform blower protections for workers who report Congress approved and the president Agency, grants for development of new Lead safety violations. It would have shared technologies, and incentives for building signed legislation (P.L. 102-486) designed to The housing bill approved by Congress responsibility for the program between the increase energy conservation and domes- improvements. It would have established and signed October 28 by the president Agriculture, Commerce, and Health and health advisories for hazardous air pol- tic production and decrease dependence contained provisions to reduce lead-based Human Services departments. A hearing on foreign oil. Among the most significant lutants and required a nationwide assess- paint poisoning hazards in private and on the measure was held in the Senate provisions in the bill are those to promote ment of indoor air quality in buildings federal housing. Commerce Committee in June, but no ac- competition in the electric utility industry owned by local education agencies and day The bill provides for federal grants to tion was taken. by making it easier for utilities and inde- care facilities. It authorized $48.5 million states and localities to reduce hazards in pendent power producers to compete in each year through 1996 to fund the pro- low-income housing. In addition, the bill will Meat Inspection the wholesale electric power market. It re- gram. The House bill contained an author- phase in requirements for evaluating and The Streamlined Inspection System for quires utilities to share access to their trans- ization of $53.5 million a year through 1996. reducing paint hazards in federally subsi- beef, which has been opposed for years mission lines in return for just compensa- It expanded on the Senate bill, requiring dized housing, and home buyers will be able by food safety advocates, was defunded tion. Also included in the bill are a number ventilation standards for public and com- to test for lead paint before buying a home. in this year's Agriculture appropriations bill. of provisions to improve energy efficiency. mercial buildings, product labeling specify- Landlords of older rental units will be re- A pro-consumer provision that would have ing contaminant emissions, and Occupa- quired to disclose potential lead hazards. restricted the authority of states to limit tional Safety and Health Administration stan- The bill also strengthens protections Health and Health Care natural gas production in order to drive dards for indoor air pollutants in the against lead poisoning for workers and up prices passed the House but was not workplace. directs the Environmental Protection Agen- Tobacco Control included in the final bill. Although attempts cy to establish or approve state certifica- In July, Congress cleared and the presi- were made to include increased fuel effi- tion programs for lead inspections. All lead dent signed legislation (S. 1306, PL. 102-321) Radon ciency standards for automobiles in the contractors will be subject to training and that wU] require states to enforce laws bar- Legislation to reauthorize programs to original Senate version of the bill, which certification requirements. In a separate ring the sale of tobacco products to minors. reduce radon exposure (S. 792, H.R. 3258) was defeated in 1991, those efforts were measure to improve disease and injury Enforcement efforts must be reported on passed both houses of Congress this ses- unsuccessful and were not renewed in the prevention (H.R. 3635, P.L. 102-531), Con- annually to federal authorities. Failure to sion, but failed to reach the president's 1992 session. gress created a new program to increase enforce the laws will cause the states to desk when the House and Senate ran out screening and prevention of lead poisoning lose up to 40 percent of their federal of time in which to reconcile differences in children. substance abuse funds. The bill is the first transportation in the two bills. Both bills would have major anti-tobacco bill to pass Congress reauthorized three programs which form Bike Helmets since the airline smoking ban in 1989. In Motor Vehicle Safety the centerpiece of the Environmental Pro- order to win passage of the measure, Sen. The Senate passed legislation (S. 3096, In a year when money was tight, Con- tection Agency's efforts to increase public Edward M. Kennedy (D-MA) agreed not awareness of the need to test and mitigate S. 2952), sponsored by Sens. John C. Dan- gress appropriated some, but not all, of to press forward this year with his bill the money needed to implement the motor homes for radon. In addition, the House forth (R-MO) and Howard O Metzenbaum (S. 1088) to increase federal education ef- (D-OH), to promote the use of bike helmets vehicle safety provisions in 1991's surface bill would have required radon test devices forts on the hazards of tobacco use, pro- by children under 16 and to establish con- transportation bill. The appropriations bill and those who conduct tests to meet mini- vide assistance to states to enhance health sumer product safety standards for the (H.R. 5518, P.L. 102-388) included an addi- mum performance criteria and would have education in the schools, require more helmets. These measures passed in the last tional $100,000 and two new positions to required radon contractors to meet a prominent warnings on tobacco product days of the session and were never acted conduct auto safety rulemakings at the Na- minimum level of proficiency. The more packages, require disclosure of additives, on in the House. The Danforth bill would tional Highway Traffic Safety Administra- comprehensive Senate bill also contained and give the government authority to re- have established a new program under the tion. The appropriations bill also contained several provisions to prevent radon prob- strict harmful additives. In addition, after National Highway Traffic Safety Administra- $12 million for grants to states that have lems in newly constructed buildings and voice vote passage in the Senate, House tion to provide grants to states and localities in place or pass mandatory safety belt and a requirement that EPA develop guidelines conferees refused to accept a measure spon- for programs to encourage helmet use by all-rider motorcycle helmet use laws. on testing radon in schools that receive sored by Sen. Frank Lautenberg (D-NJ) that children, including enforcing laws, assisting This is approximately $6 million short federal funds. would have limited smoking in facilities in the acquisition of helmets, and providing of the amount needed to fully fund the of federally funded programs serving education. In addition to including these program. In addition, the Senate never acted Product Safety children under age 5. provisions, the Metzenbaum bill would have on a "technical corrections" bill (H.R. 5753) Product Liability required the Consumer Product Safety Health Care Reform that contained a number of provisions to Commission to begin a rulemaking to weaken safety protections in the surface In September, supporters of a bill (S. 640) establish a final helmet safety standard that Although more than 300 bills were in- transportation bill. that would have limited the ability of con- included protections against the risk of troduced in the 102nd Congress to reform sumers injured by dangerous products to re- helmets coming off and that addressed the the nation's health care system, none was Anti-car-theft cover damages fell two votes short of the enacted. Congress failed to act both because risk of injury to children. During the last week of the session, Con- 60 needed to end debate and bring the bill of an inability to reach consensus on the gress passed legislation (H.R. 4542, P.L. to a floor vote. The bill contained several best approach and because of a threatened 102-519) to discourage automobile theft. The "loser pays" rules to discourage lawsuits. presidential veto of any comprehensive bill makes carjacking — armed robbery of Also, it would have repealed the doctrine Food Safety and Nutrition reform measure. One measure (S. 1872), a vehicle while the driver is present — a of joint and several liability for non-economic which cleared the Senate as part of two federal crime punishable by up to 15 years damages; shielded manufacturers of govern- FDA Enforcement tax bills but was never enacted, would have in prison and requires new procedures to ment approved drugs, medical devices, and reformed the private insurance market for Both houses of Congress considered, but make it easier to detect stolen vehicles. aircraft from punitive damages unless fraud small businesses by limiting the cost of failed to pass, legislation to enhance the The president, who had called for action to was involved; and barred injury claims for health insurance policies for businesses with enforcement powers of the Food and Drug halt carjackings, signed the bill in October. workplace products over 25 years old. A Administration. The bills (H.R. 3642, S. 2135) 50 employees or less, prohibiting insurers similar House bill (H.R. 3030) was never would have granted the agency authority from denying coverage to employees or OSHA Safety Belt and acted on. to recall and embargo products, to inspect their dependents, and limiting the amount records of manufacturers, to subpoena doc- by which insurers could vary premiums Helmet Use Rules CPSC Reauthorization, uments, to impose civil monetary penalties, for different groups. The measure was Congress turned aside an attempt to block stripped from both bills by House Demo- Small Parts Warning Labels, and to deal more effectively with imported a rule proposed by the Occupational Safety products. Currently, the FDA must operate crats who opposed the bill's incremental and Health Administration to require on- and 5-Gallon Buckets under highly unwieldy and inefficient pro- approach to reform. the-job use of safety belts and motorcycle In September, the House approved a weak cedures that have allowed unsafe products helmets and to require employers to pro- bill (H.R. 4706) to reauthorize the Consumer to reach consumers in the marketplace and Antitrust vide driver safety programs. Although the Product Safety Commission. In addition to have failed to deter repeat violations of measure blocking the rule was included reauthorizing the agency, the bill would the law. H.R. 3642 was approved in July Vertical Price Fixing in the House Labor-Health and Human Serv- have required choking hazard warning on a party-line vote in the House Energy Both houses passed legislation in 1991 ices appropriations bill, attempts to add labels on balloons, small balls, marbles, and and Commerce Committee, but it never (S. 429, H.R. 1470) to codify the principle a companion measure to the Senate bill toys containing small parts that are intended came to the floor for a vote. S. 2135 was that vertical price-fixing agreements are failed, and it was not included in the final for children between the ages of three never acted on. "per se" illegal and to make it easier for version cleared by Congress. Page 4 November 1992 • CFAnews

Interest Rate Gap Costs Consumers Billions

The gap between the interest rates banks, interest rate overcharges are fatten- banks charge consumers for loans ing record profits," he said. and the rates they pay on savings accounts The following are among the report's continues to widen, costing consumers key findings. billions of dollars a year in interest over- • For the first time, the November 1992 charges, according to a CFA study released update found that interest rates paid on in November. money market accounts and six-month CDs Entitled "The Widening Gap Between Con- were both below three percent. sumer Loan and Savings Rates: An Update," • In contrast, bank credit card rates in the study was released November 24 at November remained well above 18 per- a Washington, D.C. news conference. It up- cent. In the last year alone, the refusal dates previous bank rate studies from April of banks to lower credit card rates by just and October of 1991, reviewing rate changes two percentage points has cost consumers between April 1989 and November 1992 more than $3 billion in excess interest for two-year personal loans, credit cards, charges. new car loans, money market accounts, • The 15 percentage point spread be- and six-month certificates-of-deposit (CDs). tween savings rates and credit card rates

liilili- 1: Consumer Loan and Savings Rates April 1989 October 1991 November 1992 CFA Executive Director Stephen Brobeck released a report on the widening gap between interest rates on consumer loans and savings accounts at a November Washington, D.C. Savings news conference. 6-month CDs 9.02% 5.19% 2.98% Money Market Accounts 6.42% 4.89% 2.80% Meanwhile, credit card rates rose, and in- loan rates fell 3.34 percentage points. In Auto 12.50% 11.40% 9.16% terest rates on personal loans dropped less the last year they declined 2.24 percentage than one percentage point. points. Personal 16.94% 17.03% 16.11% • From October 1991 to November 1992, The interest rates on which the report Credit Cards 18.08% 18.88% 18.46% interest rates on CDs and money market is based have been reported weekly by accounts declined more than two percent- the New York Times, which cites its source "While consumers have many reasons is the highest ever, as is the 13 percentage age points, while credit card and personal as the Bank Rate Monitor. to give thanks on this Thanksgiving week, point spread between savings rates and loan rates fell less than one percentage point. Copies of the report are available for the widening gap between the high inter- personal loan rates. • The only good news for consumers $10 prepaid from the Consumer Federa- est rates that banks charge and the low • From April 1989 to November 1992, in the report is the fact that auto loan tion of America, 1424 16th Street, N.W., savings rates that they pay is not one of interest rates on CDs fell 6.04 percentage interest rates have declined nearly as much Suite 604, Washington, D.C. 20036, (202) them," said CFA Executive Director Stephen points, and interest rates on money market as interest rates on money market accounts. 387-6121. It is free to non-profit groups Brobeck, author of the studv. "At most accounts declined 3.62 percentage points. Between April 1989 and October 1992. auto and to the press.

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"3*^^dk i*i' w^^^ Barbara Roper Jack Gillis CFA and Staff Members Honored The Consumer Federation of America and two of its staff members have recently been recognized for their contributions to the consumer movement. In September, the North American Securities Administrators Association presented its Distinguished Service Award to Barbara Roper, CFA Director of Investor Protection. The association of state securities regulators honored Roper for playing "a vital role in the mission of investor protection throughout the United States." In particular, the award cited her "tireless work in advocating state and federal reform in the financial planning industry." In 1991, Roper received the Distinguished Service Award from the Na- tional Association of Personal Financial Advisors, an association of fee-only financial planners. CFA Director of Public Affairs Jack Gillis is the author of a publication that received an award from the National Association of Consumer Agency Administrators in this year's Awards in Excellence in Consumer Education program. The American Association of Retired Persons received first place in the business and industry category for two publications, including a guide to Social Security for women which was written by Gillis. The awards recognize effective and innovative educational efforts that alert consumers to potential dangers in the marketplace and provide them with the knowledge to make informed purchasing decisions. CFA received one of the first three Awards for Excellence offered by the Fight Back Foundation for Consumer Education. Presented in October as a part of a program to kick off National Consumers Week, the award CD recognized CFA's contributions to quality consumer information and improvements in the marketplace. The Fight Back Foundation is a non-profit organization dedicated to promoting consumer education and awareness in the marketplace.