Current Events in January 2017

You hear complaints and speculation about the objectivity of reviews on consumer sites, but for 21 states, Moody's Investors Service represented a much bigger fish in need of frying. 

The states, together with the U.S. Justice Department and the District of Columbia, charged that Moody’s harmed consumers by falsely claiming to be an independent source of analysis on structured finance securities when, in fact, its ratings were driven by its own desire for revenues, as well as favoritism toward investment banking clients who issued the securities and paid the company fees.

Moody's has agreed to pay $863 million to settle the suit, which alleged that it violated state and federal laws by misleading consumers about its independence and objectivity in the rating of structured finance securities. The origins of the case can be found in the Financial Crisis that crested in 2009, as those structured financial securities crumbled.

“This is an important settlement because it holds Moody’s accountable for unscrupulous conduct that harmed New Jersey consumers of Moody’s services and others who placed their trust, and dollars, in a trusted name,” said Christopher S. Porrino, attorney general of New Jersey, one of the states bringing the action. 

RMBS and CDOs

Moody’s alleged misconduct began as early as 2001 and became particularly acute between 2004 and 2007. Structured finance securities – including residential mortgage-backed securities (RMBS) and collateralized debt obligations (CDOs) – derive their value from the monthly payments consumers make on their mortgages. These securities, particularly those backed by subprime mortgages, were at the center of the nation’s financial crisis.   

“Moody’s sought – and obtained – investor confidence by assuring consumers its ratings and analysis were objective and unbiased, but those assurances proved to be empty,” Porrino said. “In reality, the company acted on behalf of its own, profit-driven interests, and on behalf of favored investment banking clients whose fees provided Moody’s with a lucrative revenue stream.”

The Securities and Exchange Commission (SEC) says investment bank Morgan Stanley Smith Barney has agreed to pay a $13 million penalty to settle charges that it overbilled investment advisory clients.

Morgan Stanley said the overbilling occurred because of coding and other billing system errors. But the SEC says the bank also ran afoul of the custody rule dealing with annual surprise examinations.

According to the regulatory agency, 149,000 Morgan Stanley advisory clients were overcharged because the company failed to follow accepted compliance policies. It said Morgan Stanley also failed to back up billing rates contained in the firm’s billing system against client contracts, fee billing histories, and other documentation.

An extra $16 million in fees

As a result, the SEC found Morgan Stanley collected $16 million more in fees than it was entitled to, during a period between 2002 and 2016. Morgan Stanley, meanwhile, says it has reimbursed this full amount plus interest to affected clients.

“Investors must be able to trust that their investment advisers have put appropriate safeguards in place to ensure accurate billing,” said Andrew Calamari, Director of the SEC’s New York Regional Office.

Calamari said the deficiencies that remained in place for years led to a total of 36 different types of billing errors that, in turn, led to the overcharging.

The Morgan Stanley settlement, along with Citigroup's similar settlement with the New York Attorney General's office, prompted Bill Harris, CEO of Personal Capital, to weigh in. Harris says his firm is a fiduciary of its clients money, meaning it must put the client's interests ahead of its own.

Not as obvious as you think

That might seem an obvious concept, but Harris says that isn't how the investment world is set up.

"They're brokers who sell whatever makes them the most money, rather than true advisors who look out for their clients' money first," Harris said.

In April, new Department of Labor rules are scheduled for implementation that will require brokers to act as a fiduciary when marketing retirement accounts. Harris says these rules have faced “fierce opposition” from brokers and the financial services lobby.

Late last week, New York Attorney General Eric Schneiderman announced the resolution of a probe of Citigroup Global Markets (CGMI) that found the investment firm had overcharged 47,000 clients more than $22 million in fees. As part of the agreement CGMI has begun refunding the fees to affected clients.

Florida officials have announced coordinated settlements with online lenders Western Sky Financial, LLC, CashCall, Inc., WS Funding, LLC, and Delbert Services Corporation.

Florida Attorney General Pam Bondi and Office of Financial Regulation Commissioner Drew Breakspear had charged the companies with running an online lending scheme.

Coincidentally, there is a Florida class action settlement pending in U.S District Court for the Southern District of Florida, resolving charges that the lenders offered, serviced, and collected on Western Sky loans to Florida borrowers with illegal interest rates of more than 18%.

Assuming the court takes final action, officials say some Florida consumers stand to share more than $11 million.

“Lending schemes harm consumers seeking financial assistance, and with these settlements, Florida borrowers will now be better protected from such business practices,” Bondi said. “Thanks to a great partnership with the Office of Financial Regulation, Floridians will receive millions in restitution.”

14,000 consumers to get compensation

Bondi says the settlements are expected to provide payments for approximately 14,000 Florida consumers. To be eligible for a payout under the settlement, consumers must have borrowed from the lenders and paid back the principal plus 18% interest. Bondi says eligible borrowers will be officially notified when details are worked out.

At the same time, Western Sky and its affiliates are barred from collecting more than $15 million in outstanding loans made to Florida consumers.

Back in September a federal court ruled in a case involving the federal government and 16 states, that CashCall's business model did not provide an exemption from fair lending laws. The case was joined by the Consumer Financial Protection Bureau (CFPB), which had challenged CashCall's use of the “tribal model” to make and collect on loans in states that limit interest rates.

Western Sky stopped accepting loan applications in 2013 after tangling in court with a number of states. But CashCall continued to automatically withdraw payments from customers' accounts even though the loans were voided as a result of the state probes, according to an American Banker report.

Western Sky initially claimed immunity from state interest rate caps through its affiliation with the Cheyenne River Sioux tribe.

In recent years hackers have shifted their primary aim from individual consumers to large retailers and corporate networks because it offers more bang for the buck.

It's a good thing too, because most of us individual consumers are sitting ducks.

Make no mistake, hackers still launch attacks on individuals. It's one way they harness millions of individual zombie computers to carry out their various nefarious deeds. And Keeper Security, a cyber security firm, says consumers make it easy for them by using pathetically-easy passwords.

In its blog, the company said it reviewed the passwords that leaked to the internet from data breaches in 2016, looking for the year's most common passwords. Incredibly, it found nearly 17% of consumers are still using “123456” as a password. That was number one. Believe it or not, the eighth most-common password in 2016 was “password.”

Main takeaways

Keeper Security says the main takeaways from its analysis include the fact that the list of most-used passwords hasn't changed much over the years. In other words, we haven't gotten very creative.

“While it’s important for users to be aware of risks, a sizable minority are never going to take the time or effort to protect themselves,” the company writes. “IT administrators and website operators must do the job for them.”

Long passwords are best, but four of the top 10 passwords on Keeper Security's list, and seven of the top 15, are six characters or shorter. Those passwords are no match for hackers' state-of-the-art tools that can break those flimsy passwords in seconds.

Less random than you think

Some consumers may think they're well ahead of the hackers by using passwords like “1q2w3e4r.” When you look at the sequence of numbers and letters it may appear random, but it's not. If you'll glance at a qwerty keyboard, you'll quickly see the combination is assembled by moving diagonally to the right from the number row to the top letter row. It's little more inventive than “123456.”

The company says email providers should be doing a better job of using their services for spam delivery, and the way to do that is by enforcing tougher password rules.

“We can criticize all we want about the chronic failure of users to employ strong passwords. After all, it’s in the user’s best interests to do so,” the company writes. “But the bigger responsibility lies with website owners who fail to enforce the most basic password complexity policies. It isn’t hard to do, but the list makes it clear that many still don’t bother.”

Keeper Security said it had no trouble finding passwords published on the internet. It says there were at least 10 million of them, the result of 2016's data breaches.

Palmer Candy Company is recalling of certain chocolate products that may be contaminated with Salmonella.

No illnesses have been reported.

The following products, produced between October 20, 2016, and December 9, 2016, and shipped to grocery, convenience store and wholesale customers nationwide, are being recalled:

The UPC #s are usually on the back of the bag or bottom of containers.

What to do

Consumers should throw out or return the recalled products to the place of purchase for a full refund.

Consumers with questions may call Palmer Candy Company at 712-258-5543 between 9:00 a.m. and 4:30 p.m. (CST).

It took Samsung many months to issue a recall of top-loading washing machines that can basically shake themselves apart and send pieces flying through consumers' laundry rooms. Now an Oklahoma man says the company hasn't followed through on its recall of the machines.

In a lawsuit seeking class action status, Jerry Wells says the remedies Samsung is offering aren't adequate. Wells says he has made numerous attempts to have his machine repaired, alleging that although he made three appointments, no service person ever showed up.

Wells isn't alone. Many other consumers have complained that Samsung either refused to repair their washer or, as in Wells' case, failed to do so successfully.

“I was told they would refund my money,” D.C. of Rosewell, Ga., wrote in a ConsumerAffairs review. “Then my refund was denied stating my receipt was 'blurry.' I honestly feel retailers should step in and help consumers. I now sit with a washing machine that is not usable as it sounds like a jet ready to take off when it is in use.”

"My new Samsung washer has slammed itself all over the laundry room. I have readjusted it on about every load. It barely uses any water and soap is stuck to my jeans. I have never washed bedding," said Cindy of Jacksonville, Ala. "It goes nuts on towels or jeans. Now I find out it is on recall. ... I guess they didn't want to refund my money."

Consumers get a choice, sort of

The recall offered consumers the choice of a warranty extension and in-home repair, a rebate on a new machine, or a complete refund if the consumer had purchased the machine within 30 days of the date the recall was issued.

Wells says he chose the warranty extension and repair, but Samsung has failed to deliver. His suit seeks to represent consumers who purchased one of the 34 recalled models between March 2011 and November 2016. He is asking for a court order that would require Samsung to replace parts or entire washers free of charge.

Wells also asks the court to bar Samsung from continuing to manufacture the top-loading machines, saying they are a hazard to consumers' safety.

Samsung has conceded that it has received nine reports of injuries resulting from flying parts, including a broken jaw and injured shoulder. It has received hundreds of reports of damage to the machine resulting from excessive vibration.

Wells' case was filed in the U.S. District Court for the Western District of Oklahoma. He is represented by attorney William B. Federman.

As the Trump Administration prepares for take-off, American businesses are cautiously optimistic that the fabled real estate developer will pursue business-friendly policies. But some business sectors are more optimistic than others.

Airlines and the travel industry in general, for example, are hoping that Trump's tirades against Mexico, Cuba, and other nations don't restrict travel to those countries.

Southwest Airlines CEO Gary Kelly expressed concern at an event in Tampa about travel to Cuba, a fast-growing market for Southwest and other carriers.

"Those flights have high demand both from the U.S. and from Cuba and obviously we're hopeful that we can continue to operate them," Kelly said, according to a report in the Tampa Bay Times.  "If the government, for other reasons decides that that's not possible obviously we'll obey the law but we're hoping that's not the case."

Southwest is one of several U.S. airlines to begin flying to Cuba under relaxed policies implemented by the Obama Administration, flying a Havana-Tampa route for the last month. Trump has indicated he may take a harsher approach to relations with the island nation, as well as other Central and South American countries that are on Southwest's radar.

Kelly noted that while Southwest remains a primarily domestic carrier, it has been adding flights to Mexico, Central America, and the Caribbean through a new five-gate international terminal it's building at Fort Lauderdale-Hollywood International Airport.

Changed course

Trump was uncharacteristically silent last week when the Obama White House reversed the decades-old "west foot/dry foot" policy that allowed any Cuban who managed to make it to U.S. shores to remain here legally, although he had said last year that the policy was "not fair."

Although the decision was sudden, there was general agreement that either Congress or Trump would have revoked the special treatment that Cuban refugees have long enjoyed.

Despite the continuing wrangling over Cuban immigration and trade policy, tourism to the long-isolated country is booming, with a record 4 million visitors last year. With new cruise and airline routes now operating, Cuban tourism officials are expecting at least 100,000 more visitors this year.

That could, of course, all change in a tweet. Trump has warned he may scrap the whole Cuba normalization process started by Obama in December 2014 unless the U.S. gets a "better deal." 

Sling carriers keep infants snuggled up close to their caregiver, which can help strengthen the bond between a mother and her child. Moms who practice attachment parenting are often proponents of babywearing, as research suggests that it can diminish fussiness and aid the development of a baby’s emotional, intellectual, and physiological systems.

But baby slings can also be dangerous if proper precautions aren’t taken. In 2010, the Consumer Product Safety Commission (CPSC) warned parents of small babies that sling-style carriers may pose a risk of suffocation.

"A very young infant's head will be folded forward. That cuts off the airway, and they essentially suffocate,” explained Don Mays of Consumer Reports.

Now, the CPSC has approved a new federal safety standard to improve the safety of infant sling carriers. Per the new standard, all slings must come with a more permanently attached warning label and clear instructions for use.

Preventing deaths and injuries

Sling carriers must be structurally sound and able to carry up to three times the manufacturer’s maximum recommended weight, according to CPSC requirements. Additionally, warning labels must be more permanently attached to the sling and instructional literature must be included.

Under the new federal safety standard, warning labels and instructional literature are required to include:

• Pictures to show the proper position of a child in the sling.
• A warning statement about the suffocation hazard posed by slings and prevention measures.
• Warning statements about children falling out of slings, and a reminder for caregivers to check the buckles, snaps, rings, and other hardware to make sure no parts are broken.

Wearing babies safely

Parents and caregivers should be cautious when using sling-style carriers for babies younger than four months of age, says the Commission. Without fully developed neck muscles, newborns may be unable to get themselves out of a position that blocks their breathing.

A second suffocation hazard can arise when sling-bound infants are in a curled position with the chin bent toward the chest. The airways can be restricted, limiting the oxygen supply and preventing the baby from being able to cry for help.

To keep infants safe, parents and caregivers should always follow these tips:

• Make sure the infant’s face is not covered and is visible at all times
• If nursing the baby in a sling, change the baby’s position after feeding so the baby’s head is facing up and is clear of the sling and the mother’s body.
• Be vigilant about frequently checking your baby in a sling. Make sure nothing is blocking the baby’s nose and mouth and that the baby’s chin is away from their chest.

Some people have a certain taste for spicy foods, but could eating them actually help you live longer?

Researchers at the University of Vermont think that might be the case. Led by Dr. Benjamin Littenberg and medical student Mustafa Chopan, they found that eating red hot chili peppers led to a 13% reduction in total mortality.

Reduced mortality risk

The positive health effects of eating chili peppers have been documented for centuries, but only one other major study published in 2015 had attempted to further investigate the issue. That study, which was published in China, had found positive relationships between eating chili peppers and reduced mortality.

In order to corroborate the findings, Littenberg and Chopan examined data taken from 16,000 Americans who were tracked over the course of 23 years. They found that those who ate hot chili peppers tended to have a variety of common characteristics, including being young, male, white, Mexican-American, and married.

They also found that these people tended to smoke, drink alcohol, consume more vegetables and meats, have lower HDL-cholesterol, lower income, and less education. However, after examining mortality rates among all participants, they found that they also had a 13% reduced chance of mortality.

Capsaicin could be the key

The reasoning behind the relationship is still largely unknown, but the researchers did provide a possible explanation. They say that capsaicin – a principal component found in chili peppers – plays a major role in certain body and cell functions; they say it helps prevent obesity, modulate coronary blood flow, and “may indirectly affect the host by altering the gut microbiota.”

The study’s findings give some credence to this theory; after examining the causes of death in tracked patients, the researchers found a large decline in the number of deaths associated with heart disease and stroke, suggesting that eating hot chili peppers confers cardiovascular benefits.

Chopan believes the findings could eventually lead to changes in dietary recommendations, or could prompt further research and clinical trials. The full study has been published in PLOS ONE.

There's an old-school retail expression called “window shopping.” It's when a consumer walking down the street stops at a storefront to gaze at the products on display in the window.

Window shoppers may admire what they see, maybe even imagine owning it. But they don't go in the store to buy it. Instead, they continue down the street.

Today, there's an updated version of window shopping. It's when a consumer visits a retailer's website for the first time but leaves without buying anything. And it turns out almost all of us do it.

A study by Episerver, a digital commerce support firm, says 92% of consumers will go to a brand's website for the first time and leave without buying anything. The report, “Reimaging Commerce,” delved into the reasons for a first-time visit.

The researchers found 45% of consumers are simply looking for a specific product or service. One-quarter are shopping prices and other variables. More than one in ten are on a scouting mission, looking for details about the store.

Unlikely to make sale

The study covered more than 1,100 consumers to get an idea of what they are looking for when they visit particular retailers' sites. The takeaway is that unless the consumer is familiar with the site, the company is almost certainly not going to make a sale on the initial visit.

Nearly a third of consumers who actually plan to make a purchase when they visit a brand's website or mobile app almost never complete checkout. Drilling deeper, the researchers found the biggest turn-off is missing or incorrect information about the product they want.

“The content customers see and the experiences they have while interacting with a brand online are crucial to shaping their purchasing behavior, said James Norwood, chief marketing officer and executive vice president of strategy at Episerver. "While not every consumer visiting a brand's website is there to make a purchase, brands must consider how the experience of their websites -- from navigation to checkout -- supports engagement."

Of course, some consumers do make a purchase on their first visit to a brand's website. When they do the researchers found more than half will go directly to the product page. These consumers are less likely to consider other items that might be on sale and only 7% check out consumer reviews first.

If one of your New Year's resolutions is to get ahead financially in 2017, maybe you should think about relocating. Part of your struggle may have to do with where you live.

For example, if you live in New Jersey, Maryland, Massachusetts, Hawaii, or California, you could be barely making ends meet. A survey by GoBankingRates.com has identified the states where consumers are most likely and least likely to be living paycheck to paycheck. The island paradise of Hawaii tops the list.

On the other hand, you may be doing just fine if you happen to live in Michigan, Mississippi, or Oklahoma. It's not so much a matter of how much you earn in those states, but how much you have to spend.

The report's authors took into account a state's median income, then subtracted the average housing costs, food expenditures, transportation costs, utilities, and healthcare.

'Live like royalty on $60,000'

It turns out there are also some specific cities where your money will take you farther. CNBC recently chose 15 American cities where earning $60,000 “would allow you to live like royalty.” That might be overstating it a bit, but the numbers are indeed impressive.

For example, the cost of living in Detroit is about half the national average. The median base salary is $61,000 while the median home value is $123,000.

Other inexpensive cities include Memphis, Pittsburgh, and Cleveland. There are plenty of jobs and the median home value is less than $126,000.

Most major cities absent

Though Detroit, Cleveland, Houston, and Atlanta are on the list of most affordable cities, most other major cities are missing. The main reason is the cost of living. For example, you certainly won't find any California metros included among the locales where $60,000 will make you feel affluent.

There are no Colorado cities on the list either. It's no surprise since a new report on employment and income shows 25% of Colorado residents lack enough money to meet basic needs. An astounding 294,000 Coloradans were found to be living in “deep poverty.”

The report by the Colorado Center on Law and Policy, a nonprofit, non-partisan research and advocacy organization, found low wages in comparison to the cost of living and high levels of unemployment and underemployment.

Industry experts attending the National Association of Home Builders (NAHB) International Builders' Show in Orlando, Fla., expect the 55+ housing market will continuing growing in the years ahead.

"We know, anecdotally, over the past few years that the 55+ housing market has been growing and is likely to continue to grow for the next decade, and now we have new numbers that back that up," said Paul Emrath, NAHB's vice president of survey and housing policy research. "The return of 55+ data -- now included in the American Community Survey -- will not only show us the size of the entire group of 55+ households, but also will give us information about individual markets, and how they are currently accommodating that growing segment."

In addition, Emrath says, builder confidence has increased over the past several years. "NAHB's 55+ Single-Family Housing Market Index, which is based on a survey of members that measures builder and developer confidence for that market, regularly posted year-over-year gains from 2012 through 2015, and has remained in a very positive position through 2016, with third-quarter reports of sales and current traffic posting increases from the previous year."

Aging boomers fuel the market

As the boomer generation ages, many are looking for a smaller home -- one that's the right size, with a floor plan that makes single-level living possible, but with space for visiting family members and entertaining friends.

"Older home owners, in recent years, have been able to sell their large homes in the suburbs and buy an energy-efficient right-sized home, often in walkable communities with a wealth of opportunities for activities and social engagement," said Jim Chapman, chairman of NAHB's 55+ Housing Industry Council. "Downsizing 55+ buyers do their research -- they know what they want and don't want to settle for less."

However, Chapman warns that not every 55+ household is positioned to buy into such communities, so it's important that local jurisdictions plan to address the growing need for affordable rental housing for seniors as well.

Teachers who say they are victims of "legalized theft" are getting a little help in the form of a lawsuit that challenges the wrongful conversion of federal grants into delinquent loans.

The U.S. Education Department, which sponsors the TEACH Grant program, has ignored the problem, as has the Pennsylvania state agency that services the grants and the Congressional representatives who might have been expected to come to their constituents' aid.

The case involves David West, a teacher in Lexington, S.C., and Ashley Ford, a special-ed teacher in Kent, Ohio. Both volunteered to teach in high-needs schools for four years in exchange for grants of a few thousand dollars during their college years.

But because of minor errors on their annual renewal forms, their grants were converted to delinquent loans complete with past-due interest and penalty payments.

"This is an advertised federal program to help people become teachers. In reality, it's a for-profit scam," said West.

"For-profit scam"

The issue first came to light in October 2015 when ConsumerAffairs wrote about West's case. West, who applied for a TEACH grant while he was a student at the University of South Carolina, got a $4,000 grant and took a job teaching visual arts at White Knoll High School in Lexington, S.C., a subject and school that met the TEACH criteria. 

Things were fine the first two years, but at the beginning of his third year, West was tripped up by paperwork.

"I had the form filled out completely with all relevant information, also signed by my school's principal certifying everything. I submitted the form on time to them, but I overlooked a spot on the back of their dense form that required my signature," West told ConsumerAffairs in 2015.

"They sent me a letter saying I had 30 days to complete and resubmit the form, but I didn't receive this letter until about two weeks into that 30-day period.  I sent the form to my principal's secretary," he said. "When I resubmitted the form via fax, it was at most two days past their deadline. I never imagined that such a seemingly innocuous administrative oversight would end up costing me $4,000 plus interest."

West was quickly informed that his grant had been converted to a loan -- a delinquent loan at that -- and he began receiving demands for payment from FedLoan Servicing, a contractor to the Education Department. 

West was infuriated and has since stopped making payments and is now being threatened with garnishment of his wages. 

Ashley Ford's problems began when she was on maternity leave. She fell behind in her paperwork and her $7,000 grant was converted to a delinquent loan with nearly $2,000 of accrued interest.

Doing the job

Both West and Ford note that they are doing what they agreed to do -- teaching in "high-need" schools -- generally schools that are in low-income areas and have trouble attracting top teaching talent. Their only error was in being late with routine paperwork.

An investigation by the Government Accountability Office later found that 2,252 recipients had their grants mistakenly converted to loans from August 2013 through September 2014, the Washington Post reported. 

The case illustrates what critics say is the sloppy, even negligent, way in which the government handles programs that affect individual citizens. It also illustrates the complete indifference with which government agencies and elected officials respond when informed of such problems.

The Education Department, for example, has never responded to any of the inquiries made by ConsumerAffairs since October 2015. Sen. Lindsay Graham (R-S.C.) -- a constant and voluble commenter on all matters political -- was no help. "The response I received basically parroted the rationale FedLoan Servicing is providing for converting this grant into a loan. It seems they called on my behalf and just relayed to me what FedLoan Servicing told them," West said.

Rep. Joe Wilson refused to help because, although White Knoll High is in his district, West lives in Rep. Jim Clyburn's district. Clyburn's office didn't respond to a request for comment.

Can't sue City Hall

As West and others quickly learn, government agencies not only are aloof and often completely unresponsive, they also enjoy a certain immunity from lawsuits. 

The agencies that administer and service the TEACH grants are the usual alphabet soup. Most directly responsible is something called PHEAA -- the Pennsylvania Higher Education Assistance Agency and its subsidiary, FedLoan A quasi-public agency, PHEAA says its "earnings are used to support its public service mission and to pay its operating costs, including administration of the Pennsylvania State Grant and other state-funded student aid programs." 

A PHEAA spokesman, Keith New, said back in 2015 that he could not comment on the teachers' complaints. "We are just a contractor to the Department of Education. We have been instructed that all media inquiries must go to them," he said. Inquiries to the Education Department, in turn, went unanswered.

Just a contractor it may be, but PHEAA is very much a creature of Pennsylvania state government. Most of its 20 board seats are held by sitting members of the state legislature, who have remained blithely above the fray.

Columbus, Ohio, attorney Troy Doucet is representing West and Ford and is seeking class action status to include others who have been victimized by what West has called "legalized theft." Doucet says PHEAA makes more money servicing loans than servicing grants.

"Fedloan’s actions of converting grants into interest-bearing loans is unacceptable," said Doucet in a blog posting. He was not immediately available for further comment.

Luc Novovitch remembers being taken by surprise when he learned that a new, 148-mile natural gas pipeline was coming to the Texas county where he had served on the Commissioner’s Court, whether locals wanted it or not.

Brewster County is a rural west Texas county, the population hovering around 9,000, that is popular among tourists for its scenic views and relative short drive to the Big Bend National Park. The desolate region had no massive natural gas pipelines until last year, when Energy Transfer Partners began constructing the Trans-Pecos Pipeline. 

As locals learned in 2015, swaths of land in Brewster County fall in the path of the Trans-Pecos Pipeline project. The pipeline, according to operator Energy Transfer Partners, is expected to deliver 1.4 billion cubic feet of natural gas per day to Mexico. Originating in Texas’ northern Pecos County, the pipeline makes its way through Central West Texas before finally terminating at the United States-Mexico border.

"The Trans-Pecos pipeline will provide new market outlets for domestically produced clean-burning natural gas, thereby encouraging continued production in the U.S. energy sector," Energy Transfer Partners says on their promotional website.

A done deal

By the time Energy Transfer Partners executive Rick Smith made a presentation to the Brewster County Commissioner’s Court about the project in April 2015, Novovitch remembers it was all but a done deal. 

“I tried to bring the attention of the feds about what was going on, and it didn't really help,” Novovitch, who is no longer on the Brewster County Commissioners Court, now tells ConsumerAffairs. 

With incoming President-elect Donald Trump expected to dismantle whatever environmental protections he can come January 20, environmentalists are concerned about what health and ecological dangers the new administration may bring.

But if Donald Trump’s agenda includes fast-tracking as many oil and gas pipelines as possible, he can thank the Obama administration. Regulations that President Barack Obama used his executive authority to enact in 2012 have allowed for expedited reviews of oil and gas pipeline projects, setting what environmentalists warn is a dangerous precedent. 

Obama counters Republican attacks with faster pipeline permits 

In March 2012, as Republicans accused Obama of dragging his feet on approval of the Keystone XL Pipeline amid objections from environmentalists, the president took a trip to Cushing, Oklahoma. It was there, in the heart of oil country, that companies like Keystone XL’s Transcanada aimed to build more pipelines to transport all of the oil and gas produced by the domestic fracking boom.

“We are drilling all over the place. Right now that's not the challenge. That's not the problem. The problem in a place like Cushing is that we’re actually producing so much oil and gas, in places like North Dakota and Colorado, that we don’t have enough pipeline capacity to transport all of it where it needed to go," Obama told the crowd.

At that time, Obama issued a Presidential Memorandum, calling for, as his memo described it, “Expedited Review of Pipeline Projects from Cushing to Port Arthur and Other Domestic Pipeline Infrastructure Projects.” The executive order sounds innocent enough, calling for public government agencies to “coordinate and expedite their reviews, consultations, and other processes as necessary" so as to create "a more efficient domestic pipeline system for the transportation of crude oil."

But people and groups that have attempted to challenge pipeline projects describe the order as little more than a gift to the oil and gas industry. “It is downright foolhardy to cut corners on safety reviews for permitting the southern segment of the Keystone XL pipeline,” National Resources Defense Council’s program officer Susan Casey-Lefkowitz warned in a blog post, shortly after Obama enacted the expedited review process. 

At the same time, the United States Army Corps of Engineers began giving the green light to oil and gas pipeline projects that pass waterways under a quick process called Nationwide Permit 12.

“While the Corps’ use of NWP [Nationwide Permit] 12 is not new,” wrote a coalition of nearly two dozen environmental groups in a recent legal objection, “it is only since 2012 that the Corps began using NWP 12 to approve massive pipeline projects." 

“To the best of our knowledge, prior to 2012, the Corps had never before used NWP 12 to permit hundreds or thousands of water crossings to approve a major pipeline project," the environmental groups added.

Complicated permitting breaks massive pipeline projects into small parts

The trick behind expedited permitting reviews is that they break up what should be one single regulatory action, evaluating the environmental impacts of a massive pipeline project as a whole, into piecemeal parts, according to Coyne Gibson, a volunteer with the Big Bend Conservation Alliance. Gibson and the alliance have been trying to fight the Trans-Pecos pipeline in the courts.  

The Trans Pecos pipeline, Gibson explains, is expected to make 135 water crossings. “They claim that each of those in isolation has no significant impact," Gibson tells ConsumerAffairs. But regulators did not examine the bigger pictire, Gibson says, evaluating the impact of a natural gas pipeline making 135 waterway crossings as a whole. 

Federal energy commissioners give green light

Soon after Trans-Pecos made its presence known in Brewster County, locals like former County Commissioner Novovitch learned how limited federal involvement would be. Even though the pipeline crosses into Mexico, it flows only through one state in the United States. Federal regulators therefore classify the project as an “intrastate” pipeline.

As an intrastate project, the pipeline is subject to limited federal review, as feds claim most of that burden falls onto the state of Texas. In fact, the Federal Energy Regulatory Commission determined that only one small section of the 148-mile pipeline--just over 1,000 feet--should be subject to federal review, because that is the one section crossing the Texas border into Mexico. Otherwise, the feds and pipeline operator alike say it is merely an intrastate project. 

"From [the Texas border town of] Presidio, magically it becomes international, so they have to apply for a presidential permit, just for this section,” Novovitch tells Consumer Affairs.”This is ridiculous. It’s an artifice. I kept asking FERC to consider the cumulative impacts.”

The calls from Novovitch and other pipeline opponents to federal regulators were not heeded. “We have determined that if constructed in accordance with its application and supplements,” the Federal Energy Regulatory Commission wrote about the Trans-Pecos Pipeline January 2016, “approval of this proposal would not constitute a major federal action significantly affecting the quality of the human environment.” FERC officially granted the company its presidential permit in May 2016.

Pipes dot the hills of the Big Bend region, but much of the project is already buried. The Trans-Pecos Pipeline, according to Energy Transfer Partners, is expected to be in service by March 2017.

When federal regulators discovered last fall that Wells Fargo had been creating credit card and checking accounts for its customers without their permission, simply to boost its fees, regulators punished the bank with millions of dollars in fines.

But it turns out consumers have also been punishing the bank.

When Wells Fargo reported its earnings for the latest quarter and full year, it disclosed that new credit card accounts plunged 43% year-over-year and dropped 7% from the previous month.

As for bank accounts, new checking accounts plunged 40% from December 2015. However, they were up slightly from November.

But that bit of good news was overshadowed by the revelation that some current Wells Fargo checking account customers simply stopped using their accounts without closing them. Between November and December, active checking account customers fell by 100,000.

5,300 bank employees fired

Back in September, Wells Fargo reached a settlement with federal agencies and the City of Los Angeles over revelations it had opened millions of accounts without customers' knowledge or permission. In settling with government agencies, Wells Fargo announced that it had fired 5,300 employees and changed sales practices to end incentives to open new accounts.

Regulators charged that, not only was it fraudulent to move money and open accounts without a customer's permission, the customer also incurred fees in the process, costing him or her money.

In the earnings report Friday, Wells Fargo CEO Tim Sloan said the bank is working to regain the trust of consumers, employees and other key stakeholders.

“I am pleased with the progress we have made in customer remediation, the ongoing review of sales practices across the company and fulfilling our regulatory requirements for sales practices matters,” Sloan said. “As planned, we launched our new retail bank compensation program this month, which is based on building lifelong relationships with our customers.”

It should be noted that not everyone is punishing Wells Fargo. Even after reporting its earnings, which fell short of analysts' estimates, the company's stock rose on Wall Street. CNBC reported investors are looking past the bad news and are convinced the bank's profits will still rise in the future.

Do you remember ever playing with a whirligig when you were a kid? The simple toy, which dates back thousands of years, is made using two looped ends of thread and a small button. When put together, pulling the strings makes the button spin very quickly.

While perhaps not up to the toy standards of today’s youth, Stanford researchers have taken inspiration from it to create a handheld device that can help doctors quickly diagnose and treat dangerous diseases in low socioeconomic regions.

By outfitting a whirligig with small capillaries that can hold blood, users can pull the threads and separate individual blood components for analysis. So, basically, this small device can effectively do the job of a centrifuge. The catch? While centrifuge machines can cost between $1,000 and $5,000, the “paperfuge” costs less than a dollar to produce.

“This is a tool that requires no electricity, no infrastructure -- you can carry them around in your pockets for a price point of 20 cents,” said Manu Prakash, Assistant Professor of Bioengineering at Stanford University.

Much-needed for off-the-grid regions

The paperfuge is capable of spinning at 125,000 rpm and creating 30,000 Gs in centrifugal force. Prakash believes that it is the fastest spinning object that is driven solely by human power. But while the mechanical implications are impressive, what it may be able to do for low-income areas is astounding.

Having a centrifuge is essential for detecting many dangerous diseases, ranging from malaria and HIV to tuberculosis and African sleeping sickness. Unfortunately, many off-the-grid regions of the world where these diseases are most prominent do not have access to them because they are so expensive. The researchers realized this problem and went to work trying to create a suitable replacement.

“There are more than a billion people around the world who have no infrastructure, no roads, no electricity. I realized that if we wanted to solve a critical problem like malaria diagnosis, we needed to design a human-powered centrifuge that costs less than a cup of coffee,” said Prakash.

Working with fellow researcher Saad Bhamla, Prakash began coming up with ideas on how such a device could be made. The stroke of inspiration may have happened, however, when the duo least expected it.

“One night I was playing with a button and string, and out of curiosity, I set up a high-speed camera to see how fast a button whirligig would spin. I couldn’t believe my eyes,” said Bhamla, who recorded rpms between 10,000 and 15,000.

Astounding results

After examining the math behind the simple toy and creating a prototype, Prakash and Bhamla matched their paperfuge against real centrifuge machines. The results were very positive, and the pair determined that their device could separate blood in as little as a minute and half, though separating parasites in malaria-infected blood could take up to 15 minutes.

To learn more about the paperfuge, watch the video below from Stanford University. The full study has been published in Nature Biomedical Engineering.

A popular perception of rural life is it is healthier. There is less crime, less stress, and generally a slower pace of life.

But when it comes to the five most preventable causes of death, a new study by the Centers for Disease Control and Prevention (CDC) finds that the risk of death in rural areas is significantly greater than in the city.

In 2014 the CDC says there were 25,000 deaths in rural areas from heart disease, 19,000 from cancer, 12,000 from unintentional injuries, 11,000 from chronic lower respiratory disease, and 4,000 from stroke.

On a percentage basis, there were fewer deaths in urban areas from these same causes.

Striking gap in health

"This new study shows there is a striking gap in health between rural and urban Americans," said CDC Director Dr. Tom Frieden. "To close this gap, we are working to better understand and address the health threats that put rural Americans at increased risk of early death."

The report's authors point to several demographic, environmental, economic, and social factors that might put the 46 million rural Americans at higher risk of death. Rural consumers tend to be older and sicker than people living in cities. They are more likely to smoke, have high blood pressure, and to be obese.

When quizzed, rural consumers report less physical activity and are less likely to use seatbelts. They are also more likely to be poor and have less access to healthcare and health insurance.

Fewer healthcare resources

In fact, the best health care facilities tend to be in high population areas. Because of a smaller patient population, rural hospitals tend to be smaller and have fewer resources than their urban counterparts. Rural counties also tend to have fewer emergency service resources, meaning someone suffering an accident or heart attack may take longer to get to a medical facility.

Working with other federal agencies, the CDC says there are steps that should be taken in rural communities to improve health services. They include screening patients for high blood pressure and providing treatment for those at risk.

The agency also urges steps to increase cancer screening, education, and detection, while also providing more smoking cessation programs and encouraging healthy lifestyles, such as daily exercise and healthy diets.

Opioid addiction and overdose has also become a growing problem in rural areas, growing faster there than in cities. The CDC urges healthcare providers to follow the agency's guideline when prescribing these drugs for chronic pain.