CFA News Update- December 8, 2010
The Consumer Product Safety Commission (CPSC) has voted 3-2 to implement a Consumer Product Safety Information Database that will allow people to share and access safety information about the products they own and consider buying. The database, which is required under the Consumer Product Safety Improvement Act (CPSIA), is now scheduled to be online and available to the public at SaferProducts.gov starting in March.
The vote was hailed by consumer groups as a major step forward in educating consumers about product safety hazards and improving the CPSC’s ability to identify and act on problems in the marketplace. “As a result of the commitment to the effectiveness of the database by CPSC, consumers will have access to lifesaving information and the agency will more nimbly be able to identify and act upon safety hazards,” said CFA Senior Counsel Rachel Weintraub.
A consumer group statement praising the Commission for the vote is available here.
Federal Communications Commission (FCC) Chairman Julius Genachowski announced last week that the agency will vote later this month on “network neutrality” rules designed to prohibit Internet providers from favoring or discriminating against traffic that goes over their networks. Although the proposal has so far met mixed reviews, CFA and Consumers Union welcomed the Commission action, saying it would resolve the current uncertainty in the Internet marketplace. “The only way to preserve the open Internet is for the FCC to immediately put in place a pragmatic set of rules that gives teeth to the principles that have governed the open Internet since its inception,” said CFA Research Director Mark Cooper. “Ultimately, the devil will be in the details of the final order, but the FCC appears headed toward the right goal. We look forward to working with the Commission to ensure an effective framework not only for network neutrality, but also for universal service and consumer protection.” A vote is scheduled for December 21.
A new report released by CFA last week outlines best practices for consumer protection in cloud computing services, a term used to describe services that store users’ data on remote servers and make it available to them through the Internet or other connections. The report is the product of a two-day retreat that CFA held in June which brought together representatives from consumer and privacy organizations, academia, government and business from the United States and Europe.
Consumers are increasingly entrusting family photos, documents, and personal information to cloud computing services such as Gmail, Flickr and Facebook. While cloud computing services can offer benefits, such as providing access to one’s data from any computer, making data sharing easier, and keeping data more secure than it would be on one’s own computer, their growing use also creates challenges for consumer protection and privacy.
“In the cloud, people’s expectations, companies’ practices, and even the law are unclear,” said CFA Consumer Protection Director Susan Grant. “Our goal in holding this meeting and releasing the report is to encourage cloud service providers to be transparent, fair and responsible in their dealings with consumers.”
Consumers surveyed as part of the 11th annual CFA-Credit Union National Association holiday spending survey indicated some improvement in their financial condition and intention to spend this holiday season than in 2009. More survey respondents than last year reported that their financial condition has improved (23 percent vs. 19 percent), and fewer reported that their financial condition has worsened (30 percent vs. 36 percent). Perhaps as a result, more report that their holiday spending will increase (10 percent vs. 8 percent last year), and fewer report that their holiday spending will decrease (41 percent vs. 43 percent). “While these results convince us that holiday spending will increase this year – elements of our survey also underline the fact many consumers continue to harbor significant concerns about the economy and their personal finances,” said CUNA Senior Economist Mike Schenk. “Because of this we expect the increase in holiday spending this season to be modest – roughly half the 5 percent long-run average increase.”
The survey also indicated that consumers are making greater efforts, and having some success, managing their debt. The highest percentage in the survey’s history (47 percent) indicated that, if they received a $5,000 windfall, they would use it to “pay down some debt.” Moreover, fewer respondents reported that they are very concerned about meeting monthly credit card payments this year (10 percent) than last (12 percent), and far fewer said they were very concerned about meeting monthly payments on all types of debt this year (17 percent) than last (23 percent). “Our survey provides further evidence, along with less borrowing and more saving, that consumers are trying to rebuild their balance sheets and are having some success doing so,” said CFA Executive Director Stephen Brobeck.
A remarkable collection of financial service policymakers and commentators presented their perspectives on a variety of financial issues facing consumers and government officials at CFA’s 23rd Annual Financial Services Conference last week. FDIC Chair Sheila Bair, Presidential Assistant Elizabeth Warren, and Rep. Randy Neugebauer (R-TX), a senior member of the House Financial Services Committee, delivered keynote addresses that provided contrasting viewpoints on financial regulatory reform. In addition, Allan Sloan, Senior Editor at Large of Fortune Magazine, Jean Chatzky, Financial Editor of NBC’s Today Show, and Mark Zandi, Chief Economist for Moody’s Analytics, delivered keynote addresses on, respectively, financial disclosure, financial literacy education for children, and the state of the economy.