Current Events in April 2018

A bill introduced in the U.S. Senate takes aim at payday lenders by establishing retail banks in every U.S. Post Office to serve low income consumers.

The measure, sponsored by Sen. Kirsten Gillibrand (D-N.Y.), would set up a bank in all U.S. Postal Service locations. The banks' mission would be to give underserved populations – the so-called “unbanked” – access to basic banking services.

Gillibrand says the lack of access to traditional banking services creates an economic burden for low-income Americans, forcing them to spend large percentages of their income to cash their paychecks or pay back high-interest payday loans.

“Millions of Americans are being forced into payday lending schemes that only exacerbate their money problems, and Congress has the ability to wipe out these predatory practices right now by creating a Postal Bank that would be accessible to everyone, everywhere,” Gillibrand said

The New York Democrat says millions of consumers with no banking relationship face huge fees when they need to cash a check or pay for an unexpected car repair.

Basic financial services

“The Postal Bank would solve this problem by putting a retail bank branch in all of the U.S. Postal Service’s 30,000 locations, providing low-cost, basic financial services to all Americans, and effectively ending predatory lending nationwide,” she said. “Politicians in Washington have taken millions of dollars from payday lenders to help protect this industry’s predatory behavior on hardworking families, and it has to stop.”

The legislation is in line with recent suggestions from consumer advocates. Rather than regulating payday lenders out of existence, which is hard to do in a political environment, they suggest letting market forces do it by creating alternatives.

Under the Obama administration the Consumer Financial Protection Bureau (CFPB) drafted strict rules for payday lenders, requiring them to ensure a borrower can repay any loan. However, the Trump administration quickly backed away from that regulation.

It's been done before

Mehrsa Baradaran, Associate Professor of Law at the University of Georgia School of Law, says postal banking has been successfully employed by many countries in the past, including the United States. In the U.S., the United States Postal Savings System was established in 1911 but discontinued in 1966.

“Today, there are many communities across the country that are banking deserts,” Baradaran said. “The only financial service providers are fringe lenders and check cashers whose business model relies on the poor paying more for banking services than anyone else. This is a threat to our democracy.”

Baradaran said putting banks in post offices would provide safe, accessible, and much-needed financial services to the most financially-struggling communities in the U.S.

National Drug Take Back Day is coming up this Saturday, April 28. The nationwide event, held by the Drug Enforcement Agency (DEA), is an opportunity for consumers to safely dispose of dangerous expired or unwanted prescription drugs -- an action that is crucial in the midst of America’s opioid drug abuse epidemic.

Surveys show that a majority of teens who have taken a prescription medication for a non-medical reason said they did so because it was easy to get from their parents’ medicine cabinets.

“Medicines that languish in home cabinets are highly susceptible to diversion, misuse and abuse," the U.S. Drug Enforcement Administration (DEA) noted in a statement.

Curbing misuse and abuse

To keep leftover medication from ending up in the wrong hands, consumers can drop off their old pills or patches between 10 a.m. and 2 p.m. at a Take Back Day location near them. The service is free and anonymous.

Disposing of expired or unwanted medication isn’t only a good way of combating the opioid epidemic, it’s also good for the environment. According to the DEA, the "usual methods for disposing of unused medicines -- flushing them down the toilet or throwing them in the trash -- both pose potential safety and health hazards."

Last year’s Take Back Day resulted in more than 912,000 pounds of prescription drugs being handed over to the DEA and local law enforcement partners. More than 9 million pounds of pills have been turned in over the course of the previous 14 years that Take Back events have been held.

Finding a disposal site

This year, Google has partnered with the DEA to help consumers find a disposal site near them.

“Using Google Maps API, our team worked with the DEA to create a locator tool for the National Prescription Drug Take Back Day,” Google said in a statement.

“The locator tool can help anyone find a place near them to safely dispose of leftover prescription medications. Click on the image below to access the locator, and enter an address or zip code to find nearby Take Back Day events this Saturday and help fight the opioid epidemic.”

Consumers can also find a nearby prescription drug drop off location by visiting DEATakeBack.com.

Subway will close 500 of its 26,000 U.S. locations this year but will open more than 1,000 stores overseas. The move is part of the company’s revitalization plan, which will require franchise owners to invest more in their individual operations.

The international expansion plan will put Subway restaurants in Mexico, the U.K., Germany, South Korea, India, and China, CEO Suzanne Greco told Bloomberg.

“Looking out over the next decade, we anticipate having a slightly smaller, but more profitable footprint in North America and a significantly larger footprint in the rest of the world," Subway said in a statement.

Rebranding itself

Subway has been trying to rebrand itself in an effort to draw in more customers and kickstart sales, which dropped 4.4 percent last year due to competition from newer chains and other fast food options.

Subway had to shutter more than 350 U.S. stores in 2016. The year prior, the company had taken a public relations hit when former spokesman Jared Fogle pleaded guilty to charges of child pornography and crossing state lines to pay for sex with minors.

In 2017, the company closed another 800-plus locations.

"People are voting with their feet. They don’t want what Subway has to offer," Bob Phibbs, CEO of the New York-based consultancy The Retail Doctor, told USA Today. "They’ve been closing stores for a long time. They’re hoping to make this up internationally."

The chain plans to revamp its stores by adding self-service kiosks and more comfortable seating, as well as Wi-Fi and USB charging ports.

Subway launched a new line of wraps earlier this year and a loyalty program, called Subway MyWay Rewards. Last Summer, Subway started redesigning the look of its stores. The company moved away from its old "Tuscany" design and introduced a brighter aesthetic inspired by fresh vegetables.

More than half of workers 60 years old or older say they are postponing retirement plans, according to a new study by employment site CareerBuilder.

Despite an improved economy and rising wages, a large percentage of seniors in the workplace appear to be worried they won't have enough money to stop working.

The survey shows 53 percent of age 60-plus workers are putting off retirement, with significantly more men making that decision than women. Four out of 10 workers said they don't think they can retire until at least age 70.

It's going to have an impact

"Postponing retirement will make an impact across all of our country's workforce, along with retirement policy and financial and health care planning," said Rosemary Haefner, chief human resources officer at CareerBuilder. "With workers staying in their jobs longer, employers are adjusting hiring needs, but also reaping the benefits of the extra skills and mentoring abilities of mature employees."

While employers appear to be benefiting from the trend, what about the workers themselves? Few appear to be putting off retirement because they enjoy their jobs. Rather, it's a matter of addressing the uncertainty retirement brings.

Nearly a quarter of the workers in the survey admitted they don't know how much money they need in savings in order to stop getting a regular paycheck.

When asked to make an estimate, 20 percent of workers said they think they can retire on $500,000 in savings. Thirty-one percent said they would need between $500,000 and $1 million.

Challenges

Getting to those amounts have proven to be problematic. Roughly one in four people in the survey who are at least 55 said they do not contribute to a 401(k) or IRA retirement plan. Younger workers have a better record on that score, according to CareerBuilder.

As most Americans have longer and healthier lives, the concept of retirement has undergone changes. The financial crisis of 2008 has also had an impact, disrupting retirement savings plans for many just as they were entering what should have been their peak earning years.

A decade of stagnant wages hasn't helped matters. A 2017 study from Country Financial found over half the workers it surveyed were not saving for retirement. The most common reason was the difficulty in paying current expenses, with nothing left over for savings.

The New York Stock Exchange (NYSE) halted trading on five Nasdaq-listed symbols, including Amazon and Alphabet, midday on Wednesday due to a "price scale code issue," according to the exchange's website.

"Due to the previously announced price scale code issue affecting [Binary Consumer Customer Gateway] execution reports, trading in the following Tape C symbols will be suspended for the balance of the trading day," NYSE wrote on its website.

"Any open orders in these securities will be cancelled,” the alert to traders said. In addition to Amazon and Alphabet, trading for Booking Holdings (formerly Priceline), Zion Oil, and Gas Equity Warrants was also suspended.

Affected highest-priced stocks

The glitch appeared to have affected stocks with prices above $1,000. Booking Holdings, Amazon, and Alphabet are the three highest-priced stocks in the S&P 500.

Traders were alerted that execution reports priced above $1,000 were being incorrectly published with a price sale code of 5, which meant that they were being divided by a larger number than was accurate to determine their trading prices.

A spokeswoman for the NYSE, Kristen Kaus, said the technical issue only affected a handful of clients whose trading reports in the affected symbols were being returned in an unexpected format. The exchange elected to suspend trading in the affected symbols to minimize customer impact, Kaus said.

Trading of the five symbols outside the physical trading floor ran normally.

"To me it sounds extremely minor and not a big deal but definitely part of the [Nasdaq symbol migration] rollout," Joe Saluzzi, partner and co-founder at Themis Trading, told CNBC.

The NYSE confirmed at 4:40 on Wednesday that all securities will be active for trading today (April 26).

It looks like Google’s Play Music days are numbered. Reports have surfaced that the tech king may move all its musical eggs to the forthcoming YouTube Remix basket. The service was slated to start a month ago, but it looks like it’ll be closer to the end of the year.

Google’s move from an all-you-can-hear music streaming service to an all-you-can-hear-and-see music streaming service puts them in an exclusive space and away from the traffic jam that Play Music has had a hard time finding a comfortable seat in.

Out of the estimated 475 million monthly music streamers, Google is thought to have fewer than 10 million users -- a far cry from ruling that space. Spotify claims 140 million monthly users, including 70 million who pay for the premium version; Pandora counts 73 million among its faithful; Apple Music has 40 million of its own; plus there’s Amazon Music, iHeartRadio, Slacker, Tidal, and a dozen more fighting over what’s left.

Google has already gone down the road of combining YouTube and music once. Its YouTube Red platform offered access to advertising-free music streaming through Google Play Music on top of "YouTube Red Original" series and movies. However, the service has yet to gain traction where others like Hulu and Netflix have.

Why is Google making this move?

In a keynote speech at South by Southwest (SXSW) this year, YouTube’s global head of music Lyor Cohen said the new offering would bring “the best of Google Play Music’s context server and YouTube’s ‘breadth and depth of catalogue.’

Cohen doesn’t pretend to be a psychic, but he realizes that changing horses in the middle of this stream could be dicey. "We know we’re late to the party. It’s okay," he said.

Still, YouTube is both a cash cow and an eyeball magnet for Google, and sticking with what made it famous has a great upside. The video streamer is on track to pull in $3.96 billion this year -- more than 20 percent of the U.S. video advertising revenue market -- and its audience is projected to reach 188 million users in 2019. These are metrics that Cohen is fully aware of.

"I’m focused on bringing diversity to distribution; and we’ll do that by adding a subscription business on top of YouTube’s already growing advertising business," Cohen remarked.

There are dozens of loose ends for Google to tie up: getting unfettered buy-in from the music labels and publishers, how it plans to convince Play Music fans to become Remix ones, and what new video content it’ll serve that’s different from all the free music videos it has now.

Superior Foods Company of Kentwood, Mich., is recalling 487 lbs. of smoked salmon spreads.

The products may be contaminated with Listeria monocytogenes.

No illnesses have been reported to date.

The following items, produced on March 26, 2018, are being recalled:

• Smoked Salmon Spread – 5 lb. bulk units; Code Number: 68487; Sell by Date: 4/25/18; Lot Number 0728-2; UPC #043823684873
• Simply Superior Smoked Salmon Spread 6X5 oz units – Code Number: 92379; Sell by Date: 4/25/18; Lot Number 0728-2; UPC #043823923798
• Morey’s Smoked Salmon Spread 6x6 oz units – Code Number: 92503; Sell by Date: 4/25/2018; Lot Number 0728-2 UPC #043823925037

The recalled products were sold in retail grocery stores and some food service businesses in Michigan, Indiana, Illinois, Ohio and Minnesota.

What to do

Customers who purchased the recalled products should discard them or return them to the store where purchased for a full credit.

Consumers with questions may contact Scott Ruth at 616-698-7700.

NutriZone of Houston, Texas, is expanding its earlier recall of various kratom dietary supplements to all lots sold.

The products may be contaminated with Salmonella.

No illnesses have been reported to date in connection with this problem.

The following products, with lot numbers on the package near the Nutrition Facts Panel, are being recalled:

The products were sold in Florida, California, Oklahoma. Georgia, South Carolina, Pennsylvania, Louisiana, Washington, Mississippi, Missouri, Kentucky, Arizona, Colorado, Texas, New York and Illinois.

What to do

Customers who purchased the recalled products should discontinue using them and return the unused portion to the place of purchase for a full refund.

Consumers with questions may contact NutriZone at 800-936-7936, Monday through Friday, 9am – 5pm (CST).

Nissan North America is recalling 483 model year 2016-2018 Nissan Titans and model year 2016 and 2018 Nissan Titan XDs.

Although accessories installed on these vehicles reduced the load carrying capacity, a Load Carrying Capacity modification label was not installed, possibly allowing the vehicle to be overloaded, increasing the risk of a crash.

What to do

Nissan will notify owners and provide a new modification label, with installation instructions, free of charge.

The recall is expected to begin on June 16, 2018.

Owners may contact Nissan customer service at 1-800-867-7669.

Altaba, formerly known as Yahoo, has agreed to pay a $35 million fine to settle charges that it failed to promptly disclose a massive data breach relating to hundreds of millions of user accounts.

The Securities and Exchange Commission (SEC) ruled that the company essentially misled investors because the stock price plunged after the breach was finally revealed.

The SEC found that within days of the breach, Yahoo knew that Russian hackers had broken into the network and made off with usernames, email addresses, phone numbers, birthdates, encrypted passwords, and security questions and answers for hundreds of millions of user accounts.

The regulator says the information was reported to Yahoo's senior management, but the company failed to properly investigate the circumstances and adequately consider whether the public should be notified.

Delayed for two years

The SEC says Yahoo waited two years, until it was in the process of selling its operating business to Verizon in 2016, before revealing the data breach.

“We do not second-guess good faith exercises of judgment about cyber-incident disclosure,” said Steven Peikin, Co-Director of the SEC Enforcement Division. “But we have also cautioned that a company’s response to such an event could be so lacking that an enforcement action would be warranted. This is clearly such a case.”

Last year, Yahoo executives were pressed by members of a Senate committee to answer questions about the breach. Then-CEO Marissa Mayer was asked to describe Yahoo's efforts to notify affected users and what steps the company had taken to mitigate consumer harm.

Last month a federal judge ruled that affected Yahoo users can move forward with a lawsuit against the company. The judge turned aside Verizon's objections, saying affected users might have behaved differently had they known their data had been compromised.

Harm to investors

The SEC settlement specifically addresses investors – people who had purchased Yahoo stock without knowing the company faced a potentially expensive liability. The order found that when Yahoo filed several quarterly and annual reports during the two-year period following the breach, the company failed to disclose the breach or its potential business impact and legal implications.

The SEC also said Yahoo failed to reveal information about the breach to its auditors or outside counsel to learn what it was obligated to disclose.

Consumer Financial Protection Bureau (CFPB) Acting Director Mick Mulvaney is floating the idea of removing public access to consumer complaints about banks.

Speaking to the American Bankers Association (ABA), Mulvaney said the CFPB is not required to operate a “Yelp for financial services, sponsored by the federal government.”

The CFPB has a web portal where consumers can post complaints about banks and other financial service providers. The complaints are then accessible by consumers, who may be in the process of selecting a bank or other company. Other websites, such as ConsumerAffairs, have similar review databases.

A quick review of the web portal by CosumerAffairs shows numerous complaints about debt collectors, some of whom are employing tactics consistent with scams – such as threatening the consumer with arrest. Consumer advocates maintain that this type of information can be helpful to consumers who encounter similar problems.

Complaints are not vetted

Mulvaney said he sees nothing in the Dodd Frank law that established the CFPB that requires it to collect complaints and make them available to the public. Mulvaney said a major objection to the current system is that the complaints have not been vetted and may be untrue.

The bank executives attending Tuesday's speech in Washington applauded Mulvaney's remarks, and even offered more suggestions for loosening CFPB's regulatory role. In a comment letter to Mulvaney's agency, the ABA urged it to consider the costs and burden to banks before it launches a civil investigation.

The bankers agreed that civil investigations can be important investigatory tools if carefully used, but they contend that, in the past, they have been abused in ways that “violate reasonable due process and frustrate the pursuit of justice.”

Bankers seek more input

In its comments, the bankers trade group urged the bureau to rely less heavily on civil investigation demands as a way to obtain information and to instead rely on its supervision division to request information from the companies it supervises.

“We welcome the opportunity to provide feedback, and look forward to being a constructive participant in the bureau’s public review as it seeks information on these important regulatory issues going forward,” said ABA Senior Vice President Virginia O’Neill.

In his speech, Mulvaney got warm applause from this audience of financial executives. He gets a somewhat different reaction from consumer advocates, who say he his trying to dismantle the very agency he leads.

Earlier this month Mulvaney appeared before a Congressional committee and suggested four major changes that critics charge would reduce the agency's power and independence.

Researchers at F-Secure, a Finnish cybersecurity company, discovered that a hotel lock system known as Vision by Vingcard can be hacked by combining a card reader that can be purchased online with custom software.

Security consultants Tomi Tuominen and Timo Hirvonen said they used old cards from hotels and generated a master key that gave them access to all the rooms using the lock.

“We found out that by using any key card to a hotel ... you can create a master key that can enter any room in the hotel. It doesn’t even have to be a valid card, it can be an expired one,” Hirvonen told Reuters.

Untraceable master keys

The researchers said they’ve been trying to get to the bottom of key card problems for more than a decade, ever since a colleague’s laptop was mysteriously stolen from a locked hotel room.

“Intriguingly, there were no signs of forced entry,” the researchers wrote. Hotel staff ultimately dismissed their complaint because there wasn’t a single indication of unauthorized room access.

The researchers then decided to investigate whether it’s possible to enter a locked hotel room without the key, and years later, they figured out how to do exactly that with the Vision by Vingcard hotel lock system.

A $300 card reader can extract data from a discarded room key and crack the code to unlock all doors at a particular hotel, Wired reported.

"Basically it blinks red a few times, and then it blinks green," Tuominen told Wired. "Then we have a master key for the whole facility."

“You can imagine what a malicious person could do with the power to enter any hotel room, with a master key created basically out of thin air,” Tuominen wrote.

Solution developed

Once the security flaws were discovered, the researchers alerted Assa Abloy, the lock’s manufacturer, and set out to develop a software fix.

That fix was issued earlier this year. However, hotel chains need to apply the fix to their systems. Several hundred thousand hotel rooms worldwide still haven’t updated their hotel key card system, Assa Abloy noted.

“I highly encourage the hotels to install those software fixes,” Hirvonen said. “But I think there is no immediate threat, since being able to develop this attack is going to take some time.”

The risk of a security breach remains relatively low since the tools and methods by which the researchers made their discovery will not be published.

In a statement, F-Secure thanked Assa Abloy for helping them fix the flaw.

“Because of Assa Abloy’s diligence and willingness to address the problems identified by our research, the hospitality world is now a safer place,” Tuominen said.

On Tuesday, Spotify unveiled changes to the free version of its smartphone app, which hasn’t been updated since 2014.

Spotify’s 90 million non-paying users will now get access to 15 personalized playlists created by Spotify and will have more control over their music, among other new features.

With the changes, Spotify is aiming to grow its free user count, which should create more paying users. The company has noted that 60 percent of paying users first started out as free users.

On-demand tracks

The changes were launched in an effort to keep non-paying users satisfied and to better understand the needs of users.

"The free experience on Spotify is becoming a lot more like Spotify Premium," Babar Zafar, vice president of product development, said during Spotify's presentation at an event in New York.

Spotify is launching the ability to listen to music from 15 playlists which can be played in any order, rather than in shuffle mode. Users can listen on-demand to whatever song they want, as many times as they want.

Those 15 playlists are the equivalent of about 40 hours of music (750 tracks). They’re generated by Spotify based on a user’s listening habits and are constantly updating based on a user’s listening activity.

Assisted playlisting

Spotify will also help users create playlists by suggesting songs that are similar to those they have already added or searched for. To get to know users’ tastes, Spotify will ask free users to choose their favorite artists as soon as they start using the app.

The new free version of Spotify will also include a “data saver” mode, which the music streaming service says will reduce data consumption by as much as 75 percent.

Advertisements will still run on the free tier of Spotify, since ads help the company fund its free version, as well as serve to encourage users to switch to the premium version.

The new free experience will be rolling out globally to all markets in the coming weeks.

​The U.S. Supreme Court gave the green light to a patent review process designed to contend with “patent trolls” and others looking for a way to cash in on someone else’s patent.

In a 7-2 vote, the justices ruled that an in-house patent review at the U.S. Patent and Trademark Office doesn’t violate a defendant’s right to have their case judged by a federal court and jury.

Patent trolling (aka patent hoarding) is a term given to a person or company that sues patent holders by trying to enforce loose interpretations of a patent. Typically, patent trolls don’t manufacture the patented products in question; they simply look for a interdependent part or component of the patent they can leverage a claim on. If it sounds like a stick-up, it is.

To get past the gatekeepers at the patent office, patent challengers have to go through a review process known as an inter partes review (IPR), a procedure for challenging the validity of a patent.

Congress came up with the idea for patent reviews in 2011 in an effort to sift out the extraneous number of lame patents historically issued by the patent office. Seven years into the process, the agency’s Patent Trial and Appeal Board has annulled all or part of a patent in close to 80 percent of the decisions it’s handed down.

Protecting a patent isn’t cheap

Patent reviews are a favorite for tech companies that are frequently hit by trollers. For example, Apple was hit by a patent troll named VirnetXhas that claimed inter-rights to patents related to Apple’s FaceTime and iMessage patents. A federal court in Texas -- a troll-friendly state -- ordered Apple to pay VirnetXhas $502.6 million. If Apple had a patent review on its side, the suit may have never happened.

Big pharma has seen its share of patent challenges, too -- sometimes with a twist. In 2015, Hayman Capital’s hedge fund chief, Kyle Bass, started rolling out the first of 16 challenges to pharmaceutical company patents. Bass’ end-goal was to lower the price of drugs and get rid of the “pay-for-delay” tactics within the industry.

“However, Bass also stands to benefit by short-selling the stocks of those companies he considers to be ‘the worst offenders in the patent world,’” observed Anna Rose Welch, Editor, Biosimilar Development at Life Science Leader.

“Rather than challenging these patents in the district court, Bass turned to the Inter Partes Review (IPR) proceedings established in 2012 as part of the America Invents Act (AIA). This process promises a more efficient approach to resolving patent disputes surrounding chemical structure, formulations, methods of dosing or administration, or drug combinations.”

Chrysler (FCA US LLC) is recalling 106 model year 2018 Jeep Wranglers.

The rear under body ladder rail may corrode, possibly reducing the strength of the rear floor pan and causing the left rear seat mount to become loose.

If the floor pan strength is reduced and/or the rear seat mount becomes loose, the rear seat may detach in a crash, increasing the risk of injury.

What to do

The remedy for this recall is still under development. The recall is expected to begin June 1, 2018.

Owners may contact Chrysler customer service at 1-800-853-1403. Chrysler's number for this recall is U27.

Volkswagen Group of America is recalling 342,867 model year 2013-2017 Audi A5 Cabriolets, A5 Sedans and Audi Q5s; model year 2012-2015 Audi A6s; and model year 2013-2016 Audi A4 Sedans and A4 allroad.

The vehicles, equipped with 2.0l Turbo FSI engines, have an electric coolant pump that can either become blocked with debris from the cooling system causing it to overheat or can short-circuit from moisture within the pump.

A blocked or short-circuited pump can increase the risk of a fire.

What to do

Audi will notify owners, and dealers will replace the pumps, free of charge. Parts are not currently available. Owners will be sent an initial notification beginning on June 11, 2018.

A second notice will be mailed once remedy parts become available.

Owners may contact Audi customer service at 1-800-253-2834. Audi's number's for this recall is 19N3/19N4.