Coalition EffortsConsumer Action is working on these important issues along with other organizations. If you would like to know more about these issues, please see "More Information" at the end of each article.
Desperate students need protection from debt “relief” scams
Advocates called on the White House to crackdown on private companies that charge fees for student debt assistance, loan discharge forgiveness and consolidation services that are otherwise free. Often, the scams are passing off the federal government’s income-based repayment programs as their own and billing borrowers for it. These companies, known for preying on desperate student borrowers, must be closely monitored and shut down to protect borrowers and prevent them from paying for unnecessary services, adding to their mounting financial problems.
Monitoring availability and affordability of auto insurance requires key data
Consumer advocates have long argued that low-income drivers are price-gouged when it comes to car insurance quotes. In response, the Federal Insurance Office (FIO) set a standard that recognizes auto insurance as “unaffordable” when the average premium in a community exceeds two percent of the community's median household income. The FIO is also preparing to publish its first report on auto insurance affordability with help from the insurance industry. Advocates are urging the FIO to require mandatory participation from some of the biggest insurance companies, instead of relying on the companies’ voluntary submission of data. The group also asks the office to evaluate premiums at the zip code level to ensure the affordability analysis accurately represents the cost of insurance around the nation.
Consumers have a right to their day in court
Forced arbitration clauses are agreements that large corporations often hide in the fine print of contracts that Americans sign every day. These clauses have big consequences: By restricting access to the court system, these clauses prevent consumers who have been wronged from seeking meaningful legal recourse. The Consumer Financial Protection Bureau has proposed a new rule that will prohibit financial services companies and big businesses from including provisions in their fine-print agreements that prevent class-action lawsuits. It's a good start toward unraveling the growing stranglehold that forced arbitration has on consumer rights.
Solar panel loans cast shadow on low-income families
The U.S. Department of Energy (DOE) recently drafted a list of nonbinding best practices for states and localities that adopt property assessed clean energy (PACE) programs. However, the guidelines don't adequately protect consumers, and PACE loans should be subject to the same rigorous federal disclosure and consumer protections as mortgages. In a letter to the DOE, advocates argue that the loans will put lower-income borrowers at a greater default and foreclosure risk. PACE loans tend to carry significantly higher interest rates than second mortgages and are structure as assessments that can cause issues.
A need for racial justice in student lending
For nearly a decade the Department of Education has failed to take sufficient steps to ameliorate the disproportionately negative impact on student-borrowers of color, or even to conduct further research to discover the causes or the extent of disparities. In a letter to the Secretary of Education, John B. King, advocates urged the Department to leverage its tremendous resources and ensure that student loan policies work for all borrowers.
Help for defrauded students and taxpayers
The U.S. Department of Education has proposed reforms to provide debt relief to students defrauded by unscrupulous colleges, like Corinthian Colleges, and to hold these colleges accountable so that they, not taxpayers, pay for their wrongdoing. The proposed new rules improve protections for students and taxpayers and will help curb bad behavior by predatory colleges. But the rules need to be strengthened. As written they also roll back eligibility for student loan relief, in some cases, and make it likely that many defrauded borrowers will get partial or no relief.
Demand real consumer protection from pyramid schemes
Consumer Action joined consumer advocates in urging members of the U.S. House of Representatives to oppose H.R. 5230, the Anti-Pyramid Promotional Scheme Act of 2016. The bill, which is currently pending before the House Energy and Commerce Committee, purports to strengthen consumer protections from fraudulent pyramid schemes. In reality, it would rob the Federal Trade Commission (FTC) of its ability to protect Americans from all but the most egregious forms of pyramid schemes.
Proposed bill would damage credit scores of millions
Consumer Action joined consumer and civil rights advocacy groups in expressing their opposition to The Credit Access and Inclusion Act of 2016 (H.R. 4172). Proponents of the bill argue it helps those with little or no credit build their credit scores by allowing utility and telecom companies to repot their customers’ on-time payments to credit-reporting agencies. However, this proposed legislation will preempt existing state and local privacy protections that prevent companies from sharing a customer’s financial information without their consent. It would also create a negative credit score for “thin file” or “no file” consumers–consumers who are disproportionately from low-income and moderate-income African American communities. For areas like employment and insurance–where a negative credit report or low score could harm job prospects or increase rates–it is often better to have no credit history.
More policy riders intended to threaten retiring Americans, hijack budget process
A coalition of 254 groups is urging Congress to reject any federal appropriations bill that contains inappropriate and “ideological” policy riders. These riders, which were wildly popular during the last budget cycle, would jeopardize policies that restrain Wall Street abuses and would weaken new legislation intended to protect American families and their retirement savings. These policy riders are little more than special favors and sweetheart deals for big corporations and ideological extremists and have no place in the appropriations process.
Keep the CFPB strong on forced arbitration
Here we go again—those who have opposed increasing consumer protections and the creation of the Consumer Financial Protection Bureau (CFPB), are at it once more. Coalition advocates are urging Appropriations Committee members to reject any proposals that might weaken or limit the Consumer Financial Protection Bureau’s (CFPB) ability to take action against companies who have used forced arbitration clauses in their consumer contracts. After the well-documented abuses that led up to the 2008 financial crisis, Congress included in the Dodd-Frank Act a provision that specifically authorized the Consumer Financial Protection Bureau (CFPB) to restore consumers’ legal rights by regulating, curbing, or outright prohibiting forced arbitration clauses in consumer contracts.