What’s happening on Capitol Hill?

Consumer Action’s DC-based advocates have been busy protecting the consumer protections in last year’s Dodd-Frank Act from attack by conservatives in Congress, fighting for consumer privacy rights and promoting new ways to help people who are in danger of losing their homes to foreclosure. Here’s a run-down of our activities:

Consumer Financial Protection Bureau Consumer Action, alongside fellow consumer groups, fought hard last year for financial reform legislation that among other features created the Consumer Financial Protection Bureau (CFPB). Harvard professor Elizabeth Warren, a long-time advocate for low income and working families, was selected by President Barack Obama to set up the bureau, slated to open July 1. The bureau is the first federal financial regulator with sole responsibility to protect consumers from financial product abuses. However, the bureau has been under attack since January, as the GOP-controlled House attempts to kill the financial watchdog before it opens its doors.

The House Financial Services Committee in May passed three bills intended to, in Warren’s words, “delay, defund and defang” the bureau:

HR 1315 (Duffy), a bill that would grant existing financial regulators sweeping authority to veto new CFPB rules.

HR 1121 (Bachus), a bill to dilute leadership of the Bureau from a director to a five-member commission.

HR 1667 (Capito), a bill to limit what action the CFPB can take until such time that a director has been confirmed.

Consumer Action strongly opposes these anti-CFPB bills.

“It’s time for the political gamesmanship to end. Conservative lawmakers should lick their wounds and move on,” said Ruth Susswein of Consumer Action. “Why not give the CFPB a chance to do the job Congress gave it?”

While the bills passed the House Financial Services Committee, they have yet to be voted on by the full House, and are not expected to pass the Senate.

Privacy  This spring saw a flurry of privacy-related legislation in Congress. One in particular garnered Consumer Action’s support: Senator Jay Rockefeller’s Do Not Track Online Act of 2011 offers a straight-forward approach to giving consumers meaningful privacy rights when they use the Internet.

Senator Rockefeller, chairman of the Senate Committee On Commerce, Science and Transportation, designed his bill to help consumers know how and when their sensitive and personal information is being used by companies who track them online. Under the legislation, online businesses would be required to give consumers the opportunity to opt-out of information tracking. The bill would require opt out for Internet and mobile network tracking.

“Consumer Action has long sought a reliable and mandatory Do Not Track mechanism, which will help consumers use the Internet with confidence in their right to control personal information collected about them,” said Linda Sherry of Consumer Action.

A coalition of consumer groups and privacy advocates, including Consumer Action, also welcomed bipartisan online privacy legislation by Senators John Kerry and John McCain. However, the coalition believes that the bill needs to be strengthened if it is to effectively protect consumer privacy rights in today’s digital marketplace.

In a letter to the Senators, Consumer Action, Consumer Watchdog, the Center for Digital Democracy, Privacy Rights Clearinghouse and Privacy Times stated that they could not support the Kerry/McCain, without addressing the following issues:

The Federal Trade Commission (FTC) should be empowered to create and enforce a “Do Not Track Me” mechanism. The bill would usurp the FTC’s traditional lead role in protecting privacy and turn much of its responsibility over to the Commerce Department. The Commerce Department is not, nor should it be expected to be, the primary protector of consumers’ interests and must not have the lead role in online privacy.

The bill relies too heavily on the “notice and choice” model and could simply enshrine current practices, allowing the continued compilation of vast digital dossiers that can negatively affect consumers in transactions involving their finances, health and families.

The bill gives special interest treatment to Facebook, and other social media marketers, by permitting them to gather data on their users without sufficient safeguards.

Consumers must have the right to hold companies accountable for violating their privacy in court through a private right of action.

The bill would prohibit states from enacting stronger protections, limiting the rights of states to protect their citizens.

Foreclosure Prevention

Consumer Action supports Foreclosure Prevention bills in the House, HR 1783 (Miller), and in the Senate S 824 (Brown), which would:

• Ban any effort to simultaneous foreclose on a homeowner who is working with a servicer to modify his or her loan and to remain in the home.
• Require mortgage servicers to participate in loan modification efforts, including a reduction in a homeowner’s principle loan balance if doing so would be in the best interest of the homeowner and mortgage investors.
• Require a single point of contact during the loan servicing or mortgage modification process to close multiple loopholes that often cost consumers their homes.

Consumer Action also supports the Preserving Homes and Communities Act of 2011, S 489 (Reed) and its House companion bill, HR 1477 (Cummings). The bills would:

• Require mortgagors to use their best efforts to determine if homeowners are eligible for a loan modification.
• Ban the sale of homes when they are being considered for a loan modification.
• Require the government to set up an appeals process for mortgage modification disputes.

For more information about these and other advocacy activities, please visit the Consumer Action website.  Consumer Action urges you to let your representatives know your position on these bills by using our Take Action Center.

Save the Office of Privacy Protection

Consumer Action was outraged to learn that the California Office of Privacy Protection (COPP) was slated for closure under state budget cuts.

In a letter to Governor Jerry Brown, Consumer Action asked for continued support of this important consumer resource. Under the direction of Joanne McNabb and deputy Debra Castanon, the Office Privacy Protection (part of the California Consumer Services Agency) provides information and assistance on privacy issues to individuals and recommends privacy practices to businesses and other organizations. The office opened in 2001, with a mission of identifying consumer problems in the privacy area and encouraging the development of fair information practices.

The Office of Privacy Protection plays a vital role in assisting individuals with identity theft and other privacy-related concerns, providing consumer education and information on privacy issues, coordinating with local, state and federal law enforcement on identity theft investigations, and recommending policies and practices that protect individual privacy rights.

With a modest staff of six, COPP provides direct assistance to over 5,000 Californians per year and among other important publications, has created an identity theft manual used by law enforcement agencies around the state.

“Eliminating this office with its staff of six would have a very small effect on the state budget, but it would send a distressing signal about the value of the citizens’ privacy,” said Consumer Action Executive Director Ken McEldowney. “We call on Governor Brown to reconsider the elimination of this vital consumer protection agency.

Please consider adding your support to preserve the Office of Privacy Protection (COPP) by reaching out to your California state representatives. Use our free Take Action Center to send an email to your elected officials today.