ACC Calls on Procter & Gamble and Dopps to Strengthen Safety Features of Tide Pods

The American Consumer Council (ACC) has called upon its members to contact The Procter & Gamble Company and Dopps, the seller and manufacturer of Tide Pods, and demand they strengthen the safety features of this product. 

According to complaints from ACC members and a recent ABC News report, to some kids, the bright colors and bite-size packaging of single-doss packets of laundry detergent look too much like candy. A large number of young children have consumed the Tide Pods and suffered serious repercussions including severe nausea, vomiting and diarrhea.

Thomas Hinton, president of the American Consumer Council, said, “While Dopps has taken several steps to address product safety concerns, it’s not enough. Too many children are still accessing this product and suffering serious physical consequences.  We’re asking P&G and Dopps to re-examine their packaging and hamper the product's ease-of-access so children cannot open it so quickly.”  

Hinton added, “It resembles a candy jar and that attracts youngsters to  eat it. P&G and Dopps need to move quickly to change the features and safety packaging of Tide Pods .”

American Consumer Council Applauds Credit Unions for Helping Federal Employees

The American Consumer Council (ACC) is giving kudos to credit unions across the nation for their support of furloughed federal employees during the government shutdown.

ACC specifically recognized credit unions such as Fort Knox Federal Credit Union for offering financial assistance to local military, Department of Defense employees and contractors directly affected by the federal government shutdown. Fort Knox FCU is offering to cover their lost pay through an interest free loan. 

ACC's president Thomas Hinton stated, "At a time when so many consumers are negatively affected by the irresponsible actions of the Congress, it's good to know that credit unions are stepping up to help their members through tough times and save the day!"

ACC Meets NCUA Requirements for Association SEGs

The American Consumer Council (ACC) has received an independent legal opinion stating that ACC meets the National Credit Union Administration's (NCUA) "totality of circumstances" test which is required in order to be approved as an associational SEG (Select Employer Group).

The independent legal opinion was requested by a large federally-chartered credit union and rendered by the San Diego law firm of Selzter Caplan McMahon Vitek on October 1st.

In essence, the Legal Opinion states that ACC meets the seven criteria set forth in the Federal Credit Union Act, Section 109(b) that pertains to associations and the requirements necessary to affiliate with a federally-chartered credit union. 

Copies of the Legal Opinion may be obtained by contacting ACC's media office at: info@americanconsumercouncil.org 

Have We Forgotten About the Plight of Consumers Hurt in the Recession?

Here's a powerful article that appears in Fortune magazine by Sheila Bair, the former head of the FDIC. We recommend you read it because we think her points are right on and problems still persist!

Thomas Hinton,

President & CEO

American Consumer Council

By Sheila Bair

I told myself I wasn't going to do a "Lehman" column given the media frenzy over this month's five-year anniversary of that institution's bankruptcy. But in researching a new book I am writing for young adults about the 2008 financial crisis, I have been uncomfortably reminded of the hardship so many families encountered because of the crisis, particularly their kids.

Their plight has been largely forgotten in the power politics that have overcome financial reform. It's all about winners and losers, with regulators and reform advocates pitted against a powerful industry lobbying machine, oiled by political money and the grease of revolving door jobs. The objective of protecting the public from another recession brought on by an unstable financial sector seems lost in the Washington shuffle.

So let me recount the heartbreaking memories of the families I have interviewed. They bear tragic similarities. Their problems usually started with a steeply resetting mortgage payment, or job loss or cutback, frequently combined with an unexpected health problem not covered by insurance. Whatever the catalyst, it is almost always followed by high levels of stress for the family, sleepless nights for parents and kids, deteriorating grades at school, lost hope as savings are depleted, and finally the loss of a home. The kids give up their rooms, their pets, their schools, their neighborhoods, and will always live with the traumatic memories of their forced dislocation.

MORE: Are we ready for the next meltdown?

To be sure, many of the parents I have interviewed bear some responsibility for their troubles. As home prices escalated, they repeatedly refinanced their houses to pull out cash. When the housing market turned, they were left with unaffordable mortgage debt, which far exceeded the value of their homes. But these cash-out refis were not always done to pay for fancy vacations or flat screen TVs as apologists for Wall Street would have you believe. Rather, more typically, the money was used to pay for college tuition, medical bills, or simply to help make ends meet.

Several of the families I interviewed never participated in the housing craze. They had traditional 30-year, fixed rate mortgages that they could no longer pay when they lost their jobs or suffered pay cuts. They did nothing wrong except live in a country where we temporarily deluded ourselves into thinking that a "self-regulating" financial sector tethered to a housing asset bubble could provide a solid foundation for prosperity.

These families are now clawing their way back. Many are living in apartments or spartan rental homes. Most have regained employment, but at significantly lower wages. Several have managed to start rebuilding their savings. Their kids have grown to accept getting by with less. Some have foregone college, as their parents depleted their college accounts in a desperate attempt to hold onto their homes. Instead, they join the military or try to find work in a teen labor force which has a 24% unemployment rate. Others go to college by borrowing heavily. They graduate, then move back home, taking a low-paying job. As young people, they should be filled with hope and optimism. Instead, they confront limited job opportunities, reduced standards of living, and mountains of student debt.

MORE: Government banks $15 billion on Citigroup bailout

Their lives, like so many across the country, are improving only after years of personal struggle. Protecting them from another crisis should be regulators' highest priority.

Some say that the people who participated in the bailouts five years ago (and I was one) are "heroes" because we "saved the system". But it didn't take heroism to throw trillions of government cash at big financial institutions. The true heroes are those regulators who can show the courage to tame the system against the fierce lobbying of the very institutions that benefited from the government's largesse.

As the Lehman bankruptcy assumes its place in the annals of our financial history, it saddens me to think how historians will characterize the timid reform effort that has followed so far. With the Dodd-Frank financial reform law barely one-third implemented, regulators still have the opportunity to make the post-Lehman era their finest hour. I hope they rise to the occasion.

Sheila C. Bair, the chairwoman of the Federal Deposit Insurance Corporation from 2006 to 2011, is the author of Bull by the Horns: Fighting to Save Main Street From Wall Street and Wall Street From Itself released in paperback this month

In Response to Dr. Keith Leggett's Credit Union Watch Blog of July 10, 2013

Keith:

Your recent Blog, which referenced the American Consumer Council (ACC), has several errors and inaccuracies that need to be corrected.  For the record, the American Consumer Council is a non-profit consumer education organization with over 140,000 members nationwide. Our focus is consumer advocacy, financial education and corporate social responsibility. Our common bond is very clearly stated in our bylaws and literature.

For you to suggest that consumer-members of ACC should not be eligible to join a credit union is arrogant and discriminatory. It smacks of the typical “Big Bank” gobbledygook that is offensive and condescending to most American consumers. And, let’s be candid here, it’s the reason why so many banks are reviled by consumers. Simply stated, banks have lost our trust.

Consumers haven’t forgotten that is was Big Banks – not credit unions – that betrayed consumers and largely caused the Great Recession with their shady practices and “wheeling n’ dealing” that devastated our retirement and savings accounts. It was Big Banks that deceived consumers with mortgage deals and then illegally foreclosed on millions of consumers’ homes.

At a time when banks have all-but-deserted the average American consumer, credit unions are more vital to the financial success of our members, entrepreneurs and small businesses than ever before. We proudly stand with our credit union partners because they do an outstanding job serving the financial needs of consumers.

So, Keith, let me help you get your facts right. As with every non-profit organization, ACC has membership eligibility criteria which is listed in our bylaws and on our website. Therefore, it’s misleading for you to suggest that “anyone can join a credit union [or our organization] by checking a box on a credit union application.”  That’s just not true.

Consumers join our organization by completing a membership application and paying the appropriate dues. Every individual who wants to join ACC must meet our membership criteria in order to become a member.  We also provide scholarships to a segment of the consumer population that cannot afford our annual dues.

Also, we actively support many areas of the country where there are large numbers of under-served consumers. Unlike banks, which have closed branches in under-served regions and “blacklisted” many consumers because of simple mistakes they made during their banking transactions (as recently reported in the New York Times), credit unions have been a strong, reliable financial partner with ACC by delivering value-added services at competitive rates to these under-served consumers and regions.

Finally, it’s ludicrous for you to suggest that because a credit union enrolls members of the American Consumer Council that they are somehow “straying from their charter.”  Every credit union is strictly regulated by the NCUA or its state regulator. We have found that the men and women who work tirelessly for the NCUA are dedicated, competent people who follow the letter of the law. This is why ACC must adhere to the same guidelines that every other Select Employer Group (SEG) must adhere to when we put forward a request to have a credit union represent or enroll our members. It’s a cheap shot on your part to blame regulators for doing their job… and a good job at that!

It’s unfortunate your perspective is so lop-sided simply because you work for the American Bankers Association, a good organization but one that really doesn’t embrace the traditional American values of competition and capitalism. How ironic.

Also, it’s obvious from your own blog postings, articles, and statements which I’ve read, that you seem hell-bent on destroying credit unions, which only represent 6% of the financial market; and, in the process, the “little guy.” Certainly, there must be a more enlightened way for you to communicate your views than by knocking the “little guy” – the average American consumer who feels abandoned by the very banks you represent.

While your position at the ABA does give you a platform to espouse your views towards credit unions, it doesn’t give you the right to misstate the facts. Nor, should it give credence to your lop-sided idea that consumers should be denied the right to choose their financial relationships; or, have the right to become members of credit unions; or, suggest that credit unions not be able to legally partner with organizations like the American Consumer Council, whose mission is to help our consumer-members obtain the financial services they need to live their dreams.

Thomas Hinton 

President & CEO

American Consumer Council

www.americanconsumercouncil.org 

National Consumer Protection Week: Tips to Make You a Smarter Shopper

Sales pitches and financial advice come at you from every direction—by phone, by mail, and every time you read an ad, go online or turn on your TV. It can seem like a full time job just to sort it all out, but you don’t have to do it alone.

Government agencies, consumer organizations and advocacy groups join forces during National Consumer Protection Week, March 3-9 with shopping strategies and consumer tips to empower you to make better buying decisions and protect your rights in the marketplace.
Start learning now with these tips:

DID YOU KNOW:

• A free mobile app can help you check any product or vehicle, new or used, to see if it’s been recalled or has safety complaints? Keep up with recent recalls of things you may have around the house or check on that great thrift shop bargain before you buy. Use the Recalls.gov app and mobile site to search by product type and brand name.
• When your wallet is lost or stolen, there are eight steps you need to take right away (PDF)? A thief won’t waste time trying to cash in on your loss. Learn now so you’ll be ready to protect your identity and your credit as soon as your wallet goes missing.
• A new federal agency is working to eliminate deceptive and unfair lending practices? Established in 2010, the Consumer Financial Protection Bureau (CFPB) works to make sure providers of mortgages, credit cards, student loans and banking services market their products honestly, clearly and legally. Learn more about their work, and their simple tips for protecting yourself.
• Scammers see tough economic times as an opportunity? Job scams are abundant, as swindlers “guarantee” you an unadvertised job, try to get you to pay for their placement services or tell you that you can get rich by working from home. Learn more about financial scams and saving money at the Federal Trade Commission’s Consumer.gov.
• There’s a formula for complaining effectively? If you’re not satisfied with a product or service, use the Consumer Action Handbook’s sample complaint letter to let the company know where they went wrong and how you want them to fix it. To get the free Handbook or its Spanish counterpart, la Guía del Consumidor, visit the consumer protection sections of USA.gov or GobiernoUSA.gov.

A Simple Cure for the Banking System

by Margaret Heffernan

This article is reprinted from the Huffington Post. Visit www.huffingtonpost.com

 

We bailed out the banks because we couldn't afford not to. We award absurd salaries and bonuses to bankers because we think we can't function without them. In any other context, being made to do something you know is wrong is a crime called blackmail; in banking it appears to be normal. But it doesn't have to be this way. 

We feel ourselves to be at the mercy of the banks because they are so big. But that is also why they go wrong. So why don't we just make them smaller?

A recent study, funded by the Rockefeller Foundation and the Global Alliance for Banking on Values (GABV) compared the performance between 2007 and 2010 of 17 values-based banks with 29 Globally Systemically Important Financial Institutions (GSIFI) as defined by the Financial Stability Board. The value banks are smaller, mission-focused banks like credit unions, Triodos and Handelsbank. The globally significant banks are 'too big to fail' and include Bank of America, JP Morgan, Barclays, Citicorp and Deutsche Bank. 

And guess what they found? The value banks did more for their customers and were financially stronger. "Values-based banks were twice as likely to invest their assets in loans, lending more than 70% of their assets during this period on average. The values-based banks also appear to be stronger financially with both higher levels of, and better quality, capital. The BIS 1 Ratio, an important measure of a bank's solvency, averaged over 14% during the period studied, compared with under 10% for the mainstream banks. The sustainable banks also had an average Equity/Asset ratio of over 9% while the GSIFI banks averaged just over 5% during the period covered." In other words, the smaller banks were less likely to fail. 

Even more important, the smaller banks also delivered better returns: "Return on Assets, the measure increasingly considered most relevant for judging a bank's financial performance, averaged above 0.50% while the big banks earned an average of just 0.33%. Values-based banks also had returns on equity averaging 7.1%, compared to 6.6% for the GSIFI banks."

The report argues that what accounts for the success of the values-based banks is their values. They're embedded in their communities, have transparent governance, enjoy long term relationships with clients and pursue a triple bottom line that won't trade off performance for social impact. And it argues that having these values at the heart of the organization makes them stronger and better. 

I couldn't dispute any of that but I think the report overlooks something so obvious it's easy to miss. These values-based banks are not huge. They are small. That means that the values they pursue are not just statements posted in reception and left to gather dust. It means that personal relationships - between employees and reaching out to customers - are up close and personal. It means that oversight is actually feasible. And it means that titanic, market-shifting deals are impossible. 

Many of the problems posed by the banks derive from their sheer scale. Because they are so vast they can move markets. Because they're huge, they reap enormous profits which then fuels big salaries and giant bonuses. Because the institutions are so mighty, the people running them feel themselves to be immensely powerful. The money and the power both change the way that people think and both work to move leaders ever further away from engagement with society. 

The executives who go astray inside these institutions don't start off as market manipulators; the money and power that size brings changes them. It's easy to cast stones but the truth is that most of us, given the rewards, status and flattery that surround these positions, would find it impossible not to start believing that we were gifted, brilliant and virtuous; it would require the psychological defenses of an elephant not to. The institutions make these people, not the other way around. 

Much has been said and written about the need to change the culture of high street banks. I think these motherhood statements are naïve at best and disingenuous at worst. Everyone in business knows that culture is the hardest thing in the world to change. Think about it: most fat people want to get thin and can't. Most people want to save and don't. Changing human behavior is so unbelievably difficult that there is an argument as to whether it is possible at all. The idea that a vast institution the size of Barclays or RBS or HBOS can change the behavior of every individual it employs is a fantasy.

You cannot achieve cultural change without structural change. This is the central truth that everyone - bankers, regulators, politicians, economists and pundits - have been willfully blind to now for years. It's about time we stopped fooling ourselves and put an end to this painful economic fiasco. Rules won't change banks. A few resignations won't change banks. Inquiries won't change banks. And cultural change is beyond us. Break the banks up and they won't be too big to fail; they will - finally - be small enough for success.

 About the Author:  Margaret Heffernan is the British author of Willful Blindness: Why We Ignore the Obvious at Our Peril and How She Does It: How Women Entrepreneurs Are Changing the Rules of Business Success. Both books are available on Amazon.com