CFA News Update- September 27, 2010
Ending months of speculation, President Obama announced last week that Harvard Professor Elizabeth Warren will play a key role in the start-up process for the new consumer protection bureau created by the Dodd-Frank regulatory reform bill. CFA Legislative Director Travis Plunkett commended the president for naming “someone with Professor Warren’s stature and commitment to strong consumer protection to a leadership role in creating the Bureau. Professor Warren conceived the idea of an independent consumer financial protection agency. She is eminently qualified to bring it to life so that it functions as an effective watchdog protecting consumers from unscrupulous practices in the financial services marketplace.” The rest of his statement is available here.
Investors do not understand the differences between brokers and investment advisers, do not understand the different legal standards that apply to their recommendations, and nearly unanimously agree that all financial professionals should have to act in the best interest of the client and disclose conflicts of interest when giving investment advice, according to a survey released last week by CFA, AARP, state securities regulators and several investment adviser and financial planner groups. The groups submitted the survey results to the Securities and Exchange Commission for consideration as part of its study regarding the standard of conduct that should apply to brokers and investment advisers when they give investment advice. "This survey confirms that investors are bewildered when it comes to the different standards of care that apply to brokers and investment advisers,” said CFA Director of Investor Protection Barbara Roper. “Now, Congress has given the SEC a chance to fix this problem by adopting a policy that makes sense to investors and puts their interests first.”
With auto manufacturers objecting to an EPA proposal to provide consumers with simple fuel economy labels based on a grading system, a new analysis released by CFA last week finds that the vast majority 2010 automobiles failed to make the grade. Less than one percent of 2010 models would have gotten an “A,” while over 40 percent would have been graded “C” or lower if the labels had been available. “We all understand the difference between an ‘A’ and a ‘D’ and that’s what scares the car makers,” said CFA Public Affairs Director Jack Gillis, author of The Car Book. The complete analysis is available here.
Partnering with states, CFA is launching a new program to protect consumers and financial institutions from fake check scams. Connecticut became the first state to launch the program. Participating banks and credit unions will hand out a brochure developed by CFA, “Don’t Become a Target,” to consumers who come in to deposit checks or money orders for $1,000 or more or to withdraw $1,000 or more. “The key is to prevent consumers from being victimized by educating them about these scams at the very point where they may be at risk,” said Susan Grant, CFA’s Director of Consumer Protection, who is coordinating the program. Consumer organizations and agencies can order bulk quantities of the brochure. There are also electronic versions of the brochure are on CFA’s Web site in both English and Spanish and a PowerPoint to show to consumers with notes that serve as a guide for presenters.
With food safety legislation still awaiting approval in the Senate, and child nutrition reauthorization legislation still pending in the House, leading food policy experts convened in Washington, D.C. this week for CFA’s National Food Policy Conference. Keynote speakers included: Elisabeth A. Hagen, Under Secretary for Food Safety in the U.S. Department of Agriculture; Samuel D. Kass, White House Senior Policy Advisor on Healthy Food Initiatives; Janey Thornton, Deputy Under Secretary for Food, Nutrition, and Consumer Services at USDA; Congresswoman Marcia Fudge, and Joe W. Thompson, Director of The Robert Wood Johnson Foundation Center to Prevent Childhood Obesity and Surgeon General for the State of Arkansas. The conference agenda is available here.