Claire has been a champion of consumer rights throughout her term in the Senate. As a member of the Consumer Protection Subcommittee of the Senate Commerce Committee, Claire has worked to see that products are kept safe and industry practices are not abusive to customers. Drawing on the experiences of her family members and constituents, Claire is working hard to help protect consumers from predatory marketing and lending practices from the reverse mortgage industry to credit card companies.
Consumer Protection Safety Commission Improvements
In July 2008, Claire supported the reauthorization of the Consumer Protection Safety Commission (CPSC), which prevents dangerous products from reaching consumers and gives consumers the tools they need to access information about hazardous products. With the recent concerns arising about the levels of lead in children's products, the CSPC has faced challenges in properly protecting consumers due to understaffing and out-of-date regulations. In response, Claire supported raising the current funding level from $80 million to $136 million by fiscal year 2014, restoring the CSPC to a five-member commission and increasing staff to at least 500 employees by 2013. She also sponsored a provision to extend whistleblower rights to private employees who report violations of consumer product safety laws, as well as a provision to increase oversight at the CSPC by strengthening the Office of the Inspector General. Claire continues to be vigilant about oversight of organizations that protect consumer safety and has done work on a number of other provisions that protect consumers more directly from predatory lending and misleading advertising.
Credit Card Reform
When times are tough, Claire knows that more and more Missourians rely on credit cards to keep afloat, and often are victims of unexplained increases in interest rates and fees. After seeing first-hand how credit card companies dealt with her mom and her college-age children, Claire knows credit card companies often target consumers who can easily get in over their heads. Since arriving in Washington, D.C., she has worked hard to crack down on credit card companies’ abusive practices towards consumers.
In 2007, she joined with Sen. Carl Levin (D-MI) to introduce the Stop Unfair Practices in Credit Cards Act. Many of the provisions outlined in that bill were included in the Credit CARD Act, which Congress passed and President Barack Obama signed into law in June 2009. By 2010, the bill will require credit card statements to be mailed 21 days before a bill is due, prohibit card holders from structuring payments to maximize interest charges and put limitations on card issuers' ability to change interest rates. Claire continues to look for ways to protect Missourians against predatory lending and fight against abusive practices by big lenders.
Claire has been a champion of strengthening consumer protections and program integrity of the reverse mortgage program since chairing a 2007 Special Committee on Aging hearing about it.
Reverse mortgages allow borrowers 62-years-old and older to tap into their home equity without having to move out or immediately repay the loan. The vast majority of loans made under the reverse mortgage program are insured through the Department of Housing and Urban Development (HUD) Home Equity Conversion Mortgage program. This insurance protects lenders from the risk that their home will sell for less than the balance of the loan since HUD makes up the difference to the lender. Borrowers are also protected if the lender defaults. Because lenders are largely protected from loss on these lucrative loans that are being heavily marketed, there is a risk that HUD will become responsible for inflated loans and taxpayers will ultimately make up the difference, as happened this year when HUD requested $800 million to cover losses on the program.
Although Claire recognizes that reverse mortgages can be helpful for many older Americans, reverse mortgages are also widely considered to be risky for some borrowers because they are expensive and complicated. In practice, many seniors who lack financial sophistication must rely on brokers and lenders for guidance. Unfortunately, the brokers and lenders have conflicting financial incentives, leading to marketing that rewards troubling deals to boost lenders profits, but increase costs to seniors. Furthermore, it has been reported that some seniors are being persuaded to put the proceeds of their reverse mortgages into expensive long-term care or annuity contracts that offer little or no benefit to the borrower while exhausting their home equity. Finally, many now believe the reverse mortgage market resembles the subprime market, a market that substantially contributed to the financial disaster on Wall Street and the real estate collapse. Consequently, Claire has been conducting aggressive oversight of reverse mortgages in order to protect America's seniors, prevent more market turmoil and put a stop to abusive lending practices.
At the first hearing Claire chaired on reverse mortgages, Claire heard testimony about a woman whose home equity was drained after an agent used the proceeds of a reverse mortgage to buy deferred annuities, which ate up much of her home's equity in fees and tied up the remainder for decades. Claire worked to include protections against this kind of cross-selling of annuities into the Housing Economic Recovery Act. Since then, she has continued to monitor developments in the reverse mortgage industry. Last June, at another Special Committee on Aging hearing that she chaired, the Government Accountability Office (GAO) testified that counseling – the single most important consumer protection – is inadequate. She also heard from the HUD Office of the Inspector General that fraud and abuse are on the rise in this vulnerable program.
Consequently, Claire is currently working on legislation that will increase criminal penalties for fraud, strengthen counseling, and improve program integrity and enforcement activities in an effort to protect taxpayers, seniors and this program for those who must rely on their homes equity for retirement.
Digital Television Transition
When it was announced that all television would be switching from analog to digital (DTV), millions of households who used televisions with "bunny ears" antennas were left in the dark. Claire pledged to do something about it. For more than a year-and-a-half, Claire advocated for better education for the general public about the transition. As the transition date approached, it was clear the public was not fully aware of the changes taking places and their options available to ease the transition. In response, Claire and her staff held more than 100 meetings with constituents across the state to help raise awareness and answer questions about the transition to digital television. She also continually pressed the National Telecommunications and Information Agency (NTIA) and Federal Communications Commission (FCC) to provide ample information in order to ensure the transition went as smoothly as possible. Following the transition date, Claire has made her office a resource for Missourians struggling with the new DTV systems and converter boxes.
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