This has been a big year for consumer-oriented legislation, with federal bills introduced to deal with everything from health care to financial planning.
But the year that started with a bang is ending with a fizzle. Several prospective laws that were once expected to fly through Congress are languishing. Some have been so drastically watered down that they're unlikely to do what they promised.
What happened to 1993's consumer legislation as we enter 1994? Here's an alphabetical rundown of some important bills.
* Credit reform. HR-1015, by Rep. Joseph Kennedy (D-Mass.), would amend the Fair Credit Reporting Act in several significant ways. It would tighten rules--and create penalties--for companies that failed to correct inaccurate information in credit reports within 30 days. It would also force credit reporting companies to provide all consumers with one free copy of their credit report each year.
Right now, you're entitled to a free copy of your report only if you've been turned down for a loan because of your credit file. Otherwise, you must pay about $8 for each report requested from Trans Union or Equifax. TRW currently provides one free credit report annually to anyone who asks.
But the bill no longer bars credit reporting firms from selling pre-screened mailing lists (based on information in credit files) to direct marketers who want to target certain types of consumers. Selling these lists is currently common practice, despite the fact that a 1990 Harris poll revealed that 76% of the study participants found the practice unacceptable.
* Financial planners. A bill that would increase regulation of financial planners was once expected to sail through Congress since it had little organized opposition and won strong support from most financial planning groups.
Now, roughly a year later, both House and Senate lawmakers have passed versions of the bill that would dramatically boost registration fees paid by financial planners. The money would go to the Securities and Exchange Commission, which would hire additional investigators to oversee the financial planning industry.
However, provisions that would require disclosure of fees and commissions earned by planners on specific investments look unlikely to survive, experts say. Registered financial planners currently must disclose how they are paid--by the hour or through commissions on products they sell. And they already have to disclose apparent conflicts of interest.
But they don't have to note which individual products earn them the biggest commissions. That knowledge could give consumers a clue as to why some planners recommend a lot of limited partnerships and whole life insurance policies.
* Health reform. The Health Security Act, introduced late in the legislative session, aims to extend a sweeping set of health benefits to 37 million uninsured Americans. While many consumer advocates laud the concept, they acknowledge that the massive bill has little chance of passing quickly or in its current form.
A host of lawmakers, consumer groups and special interest groups have already taken issue with various parts of the bill. Changes are expected to fly fast and furious and from every quarter. Even the Clinton Administration, which introduced the 1,300-page bill, has already submitted 60 pages of revisions.
On the other hand, health reform will be a top priority in 1994, experts say. And almost everyone agrees with the basic premise that more Americans need better health insurance.
* Mortgage scams. Sen. Donald W. Riegle Jr. (D-Mich.) and Rep. Kennedy introduced bills to curb so-called "high-cost mortgages." The bills were introduced after legislators listened to testimony from individuals who lost their homes after being duped into taking out "home improvement" loans that came with outlandish interest rates and fees. Notably, in many cases the lenders did not expect the homeowners to be able to pay back their loans. The goal of these so-called predatory lenders is to take the home in foreclosure, congressional investigators said.
The Senate's version of the mortgage bill was tacked on to the Community Development Financial Institution package, which is given a fairly good chance of success in the 1994 session. But even consumer groups that support the bill acknowledge that it will not stop many mortgage abuses.
It won't stop lenders from making loans that clearly can't be repaid based on the borrower's income. It does not allow states to pass stricter laws. And other critics maintain that the law could hinder legitimate transactions as easily as the abusive practices they were designed to stop. Nonetheless, in a joint letter to senators, six consumer groups voiced support for the law, calling it "a modest but critical step toward eliminating home equity scams."