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RINOs and Elephants and Donkeys… Oh My! Politics

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This week, we welcome to Agent Genius Ken Montville of College Park, MD who will be bringing a fresh voice to the Sunday Political column. Ken is a highly respected Realtor who is actively blogging to serve his community well with his focus on news, stats, and practical advice for home buyers and sellers.

We invite you to pour a cup of coffee, tune your television to the talk show circuits this morning and read the fine lineup, kicked of by Ken who makes no apologies for his leanings. Please welcome Ken in the comments section and don’t forget to opine on his debut post (whether you agree or disagree)!)

This week in politics

It looked like a good week for the “‘Just Say No’ to Everything” party when they were able to convince voters in New Jersey and Virginia that their guys had what it takes to run things. Yeah, they lost one of the safest Republican seats in the country after they threw one of their own under the bus but, hey, it was only the largest Congressional District east of the Mississippi and not that important after all.

Yeah, “the Sarah” did a little promotional work and de facto Republican head honcho and, certainly, the loudest screamer Rush “I’m not on drugs anymore” Limbaugh was on the airwaves shouting about how moderate Republican candidate Dede Scozzafava was “screwing every RINO [Republican In Name Only] in the country”.  The important thing was that two governorships fell into the Republican column.

It was unfortunate that John Corzine of New Jersey was riddled with corruption within his own inner circle and enough local politcos were doing the perp walk to make Tony Soprano look like a Sunday School teacher. Virginia’s Governor is term limited and the Dem candidate that made a surprise win in the primary just couldn’t get the juice flowing for the general.  Oh well.  Maybe next time.

Will $8,000 Help if I Don’t Have a Job?

Unemployment RisesI’m sure the folks at the NAR and the State and Local Associations were all doing the end zone happy dance when the Congress passed the extension and expansion of the home buyer tax credit.  Unanimous in the Senate, even the GOP didn’t want to seem like total Grinches especially since it was tied to unemployment benefits

Speaking of unemployment. It seems that we keep bleeding jobs, although at a slower rate, and the recovery everyone seems to be talking about hasn’t quite hit the home front yet.  At 10.2% we’re not quite halfway to the all-time Great Depression high of 24.9% but it’s scary nonetheless.  Of course, the numbers don’t count al the people who have stopped looking for work since they been out of work so long or the people that might not qualify for unemployment benefits — like Realtors®.

My libertarian colleagues would say that all these folks just need to pull themselves up by their bootstraps and stop their belly achin’.  After all, this is not a Socialist country and we’re just darn sick and tired of payin’ for everyone else. I want mine.

I wish it was that easy.

‘Just Say No’ to Health Care

One of the saddest parts of the unemployment story is that most of these folks will now go without any health insurance or access to affordable health care.  No matter.  We don’t want to become a Socialist country so let ’em get sick. We have a unified “‘Just Say No’ to Everything” party standing on the steps of the Capitol screaming about how dangerous health care reform will be.

Dangerous?  Sure will be…to generous campaign contributions come 2010.

It’s really time to stop the screaming and think, just for a minute, about our society at large. Horatio Alger stories of people rising from rags to riches are nice to listen to and inspiring. The hard truth is that those are the exceptions. Millions of people in our country need help. We built our country and our society on a sense of shared values. Continued polarization takes the “United” out of “United States of America”.

A Postscript

Just a small note of remembrance and sadness for the tragedy at Ft. Hood, TX this week. My heart and thoughts go out to the families of the fallen and wounded.

“Loves sunrise walks on the beach, quaint B & Bs, former Barbie® boyfriend..." Ken is a sole practitioner and Realtor Extraordinaire in the beautiful MD Suburbs of DC. When he's not spouting off on Agent Genius he holds court from his home office in Glenn Dale, MD or the office for RE/MAX Advantage Realty in Fulton, MD...and always on the MD Suburbs of DC Blog

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24 Comments

24 Comments

  1. Steve Norris

    November 8, 2009 at 8:15 am

    Ken, Ken, Ken. Your Libertarian colleagues would more likely say that it is not your right nor anyone else’s to, against their will, take the production one person creates and give it to another. For any reason. You, nor anyone else, has no right to the fruits of another’s labor. It does not matter with what political/ social niceties you dress it up – taking something from someone against their will is theft. Whether done by a pink in an alley in Baltimore or a smiling, well intended politician, it is the same.

    While I’m no fan of the Republican party (they’re anti constitutional on a whole other series of issues) when it comes to raking more and more dollars out of the pockets of the taxpayers I’d rather a politician that can “Just Say No” to one that never met a government debt he didn’t want ot increase.

  2. Matt Stigliano

    November 8, 2009 at 8:36 am

    Ken – First off, welcome to AgentGenius (as a writer at least). I’ll be interested to see where your column goes once the First Time Home Buyer Tax Credit hubbub subsides. While talking about how it hadn’t passed yet with Jay Thompson, we both agreed it would political suicide to stand up against the credit. Sometimes I fear that standing up against it in agent and consumer circles can get you bashed too. Shame.

    Although there’s the obvious concerns of who’s going to pay for it in the long run, my concern tends to lean more towards the psychology of what we’ve created from it. A nation of waiters (not the job, but the action). A nation that thinks every incentive and financial stimulus will last forever. A nation that say “no more Wall Street bailouts” then salivate at the thought of one for themselves.

    I don’t blame anyone for taking advantage of the programs available to them, I just question whether they really need them. The new income limits for the tax credit? Seriously? What’s next, millionaires aren’t buying enough Lear jets, so we should incentivize that too?

    Health care is a whole other ball of barbed wire. I’m tired of hearing how dangerous the new ideas are yet I haven’t heard any solutions either. And no, co-ops are not the answer just because they’re non-profit. Blue Cross/Blue Shield of Pennsylvania is non-profit too. They earn billions, but they give it to charities and research groups (which is great) while letting people die because of their pre-existing brain tumor. The system we have now does not work. Even with insurance, one bad illness and you’re screwed. Insurance doesn’t cover much anymore.

    The cost of health care is out of control. I have a friend who is a chemist and works for Merck. He plays around with atoms and bonds all day trying to fix the world’s ills. He tells me about the millions that go into one drug, before they even open up their marketing plan. And then the money really starts to flow. Some quick fixes to costs? Ban TV advertising of drugs. Do we really need to know about these things? Can’t we just go to our doctor to learn about them? Doctors still have to prescribe the right medicine for you, so all the commercials in the world shouldn’t be affected our doctor’s decisions. Should they?

    Alright, it’s early and I’m getting off track.

    Good to see you here and I look forward to more.

  3. anitacrum

    November 8, 2009 at 12:07 pm

    Ken, welcome aboard. You’ve started with a great, thought provoking post and I look forward to reading many more. I usually tend to avoid commenting on things political or religious as often those discussions tend to get a little heated. Okay, I don’t mind a little heat but boy, sometimes they can get way out of hand. Anyway, I’m not exactly one of the “Just Say No to Everything” crowd but I am feeling more like a “Enough is Enough” kinda gal. There is a big difference between a “hand up” and a “hand out”. Too many people/organizations/companies have all been holding their hands out and I don’t know about you but I’ve already turned my pockets inside out and emptied out my kids piggy banks.

    In an aside to Matt…. Doctors receive all sorts of “free samples” from the pharmaceutical companies to give out to their patients. The days when you completely relied on your doctor to give you the best “cure” for what ails you is gone. How does someone who only sees you for a couple of minutes really know what’s wrong with you and be able to properly treat it? In the past few years, every time I go to the doctor’s office I always feel like I’m being rushed through so they can get to the next paying patient. What ever happened to bedside manners?

  4. Floridagrandma

    November 8, 2009 at 3:40 pm

    You want a Government who can’t run what they have now .. no run our Health Care System? Heaven Help Us. …. We should be a party of the people .. for the people .. not a party who takes from one to give to another …. I don’t make a lot of money … but I do work hard and want to keep it for my family or give as I can .. and I do …

    People .. including people I know … use the system for a hand-out for years .. they say they don’t want a handout .. just a helping hand up … but how long does a helping hand up last … the person I know has had their hand out and been on some kind of assistance or at one of the many churches for a freebie for going on 10 years now and does not have any more now then they did 10 years ago .. probably less … they haven’t tried to give themselves a helping hand .. because they get it free from others .. and they don’t try to better their situation .. instead spend their time fishing .. instead of working …. so Yes .. We needed Change .. But not this kind ….

    Let us go back to they days where you worked for your money, you helped your neighbor, and America didn’t apologize for everything … Be A Little Conservative!!

  5. Ken Montville

    November 8, 2009 at 3:59 pm

    Thanks for the warm welcome, folks! I appreciate it.

    Steve – I hoping you don’t really mean it but I’m getting from your comment that total anarchy would be preferable to the current system. Sure, no one likes to pay high taxes but it’s the cost we pay for some semblance of order. I’m sure people would be screaming bloody murder if the government started taking away the tax “breaks” as in the mortgage interest deduction, for one.

    Matt – I’m not as big a fan of the housing stimulus as I am of health care reform. My take is that the housing market would have eventually self-corrected (and still might have to after the tax credits go away) and it might have been painful but it would have worked.

    Health care reform is another matter as is unemployment. People get sick and need help and not everyone has that entrepreneurial spirit. Even so, entrepreneurs need someone to work for them (note: all the real estate “teams”). When people get fired (“laid off” is such a euphemism) society has an obligation to make sure they don’t die unnecessarily. Besides, the cost to the system for all those emergency room visits are far higher than any reform the most liberal of Congressman can think up.

    Anita – Indeed. There is a difference between a “hand up” and a “hand out” and I find it interesting that the capitalists of Wall Street are lined up for their multi-million dollar “hand out” so they will deign to stay on the job. Meanwhile, our next door neighbor can’t get their ‘scipt filled. There is something wrong with this picture.

  6. Ken Montville

    November 8, 2009 at 7:22 pm

    FloridaGrandma – Hey, I might be on board. Let’s get rid of Social Security, Medicare, Medicaid, community block grants, education subsidies, mortgage interest deductions, all the farm subsidies that keep food prices nice and low and the rest of it. Pile it on the churches and synagogues and let the chips fall where they may.

    Oh wait. I meant take away *their* program not *my* program.

  7. Greg Cooper

    November 8, 2009 at 8:24 pm

    Ken,

    A brief comment….one of the classiest opening debuts you could have had paying homage to our heros at Ft. Hood. I look forward to sharing ideas with you!

    Greg Cooper

  8. Elaine Reese

    November 8, 2009 at 8:51 pm

    I’m OK with getting rid of Soc Sec, as long as the gov’t repays me in a lump sum all the money I paid into it for the past 46 years. I want my money back … with interest.

  9. MIssy Caulk

    November 8, 2009 at 11:03 pm

    HI Ken, Welcome to Agent Genius.

    There were plenty of alternatives out there, but the main stream media ignored them. And when a reasonable guy like the CEO of Whole Foods presented one he was picketed and liberals avoided his store. Guess he learned to keep quiet and go along.

    I know no one against health care “reform”, but many against a take over by our government of the industry.

    Have you seen the numbers? 20K cost to each individual and family who makes over 100.100, Now if you are lucky and ONLY make 44K a year you only will pay 7300.00 a year.

    And at 1 1/4Trillion to the deficit… who cares if Obama’s promise of “NOT one dime will be added to the deficit to give us health care.”

  10. Ken Montville

    November 9, 2009 at 7:47 am

    Greg – thanks for the welcome!

    Elaine – Aw, c’mon. Wouldn’t you take the money back without interest and just call it a day?

    Missy – I’m really not an expert on health care reform and I do know that everyone has different numbers. The left has their set, the right has their set, the Congressional Budget Office supposedly has a “neutral” set. The bottom line for me is that there is a whole lot of corporate money going into stopping any sort of reform that could probably go to better use — R & D for one – instead of CEO compensation packages.

  11. Keith Lutz

    November 9, 2009 at 8:00 am

    Totally agree…”There is a difference between a “hand up” and a “hand out” and I find it interesting that the capitalists of Wall Street are lined up for their multi-million dollar “hand out” so they will deign to stay on the job. Meanwhile, our next door neighbor can’t get their ’scipt filled. There is something wrong with this picture.”

    Keep the good columns coming!

  12. Douglas Fender

    November 9, 2009 at 8:12 am

    If the health care reform passes and you do not buy health insurance the government will put you in jail.

  13. MIssy Caulk

    November 10, 2009 at 11:07 am

    “The bottom line for me is that there is a whole lot of corporate money going into stopping any sort of reform that could probably go to better use — R & D for one – instead of CEO compensation packages.”

    What are you talking about, Ken?
    What does CEO compensation have to do with health care? The drug companies pay their highly skilled Dr.’s very well to do research on drugs to heal us. I know we “had Pfizer>Park Davis here in Ann Arbor. They are research scientists and although most lived close to Pfizer in N.E. Ann Arbor they were in average neighborhoods.

    Are you getting confused with the bankers?

    Although the bill is huge the figures of the costs are there, which I quoted in my last comment. Is that really help for the middle class?

    Doug Fender, I heard that, guess more of our money will be taxed to pay for more prisons, maybe we can send everyone to Gitmo.

  14. Ruthmarie Hicks

    November 16, 2009 at 12:48 am

    Thank you Ken for bringing some balance back to the largely right-wing politics. It wasn’t balanced and I think that was a problem. And thank you Ben and Lani, because this is obviously not your politics….

    Health insurance is meaningless if it doesn’t cover catastrophic care. They’ll cover the sniffles or a broken leg, but cancer? You’re dumped and SOL. Insurers provide the illusion of coverage by taking care of the “easy stuff” which means that they are currently selling nothing more than snake oil. There is so much administrative waste and lobbying waste in the current health insurance industry that it boggles the mind.

    Here are some ideas to cut health care costs:
    1. Get rid of staff including legal staff that run around trying to deny coverage.
    2. Get rid of political lobbying for health care.
    3. Disallow political contributions by insurers.
    4. De-list insurers from the stock exchange and turn them into regulated non-profits. Put the billions in profits back INTO the health care system.
    5. Cap CEO pay and bonuses in the health care industry.

    If the above was done, a tightly regulated private system would work. With the for-profit system intact we have to resort to other alternatives because a robust public option will be the only way to contain runaway costs. Therefore…..

    6. Raise the top marginal tax rate. YES, it needs to be done. America went through a boom when the top marginal rate was 90%. The 1950s were a good time for most Americans…My Grandfather was a CEO during that period and he did just fine. He didn’t have a private jet and 10 mansions and private Picasso collection, and a cabin cruiser. But he lived very, very well.

    No. 1 would also take pressure off of individual medical practices who find it necessary to have an entire staff on hand to deal with insurance disputes. My father’s oncologist has four people on staff full time for insurance and billing issues. 90% of what they deal with is insurers trying to disallow coverage.

    As for Pharmaceuticals & that particular industry…
    Did you know they spend more on marketing than on R&D? Scientists grinding away in that lab with their Ph.D.’s often get less money and salary than the marketing gurus. As a former scientist who was offered about $33k a year for a 70-hour a week post-doc, I have a big problem with that.

    In my former field I read a lot of medical journals. They market as heavily to physicians as they do to the general public. Pharmaceuticals should be sold on the merits of the drug, not through glossy photos displays or TV. TV ads for prescription drugs should be banned. This would bring down the cost of medication.

    So you see, there is money for health care – it just has to be diverted from all the profiteering & marketing so that it is actually used to provide (drumroll……) health care!

    As I said on Missy’s blog – free markets don’t work for health care because the for-profit motive is at odds with what health care is supposed to be all about. The conservatives have to let go of the fantasy that “free markets fix everything” mantra. They don’t.

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Politics

California’s gig labor bill hurts the people it’s trying to protect

(POLITICS) The law has loopholes for industries with good lobbyists, but it’s costing independent contractors, freelancers, and creatives their jobs.

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Uber subverts ab5 bill

So, there’s a new bill in California, Assembly Bill 5, that’s doing immense harm to freelancers across the state and throughout the country. The bill was intended to prevent tech companies from taking advantage of their employees by branding them as freelancers. But the thing took too wild a swing, and a lot of people have gotten hit by it.

We’re going to talk about how and why, but let’s get one thing straight, right off the bat:

We absolutely need something to help workers in this country. When we talk about why AB5 doesn’t work, I want to be very clear that I’m not turning my nose up at the idea of something like it. Rather, it’s this specific law that’s hurting a lot of people.

Let’s take a quick review at the environment that gave rise to Assembly Bill 5:

We live in an incredibly rough economy for most people. The stock market is doing phenomenally! But the stock market isn’t the same thing as the economy. The economy is made of people who are barely getting by, propping up a class of billionaires who are hording an amount of wealth that is increasing at a mind-boggling pace, instead of “trickling down”.

Productivity and wages used to rise together, but they got divorced in the 70s, and productivity’s been doing a lot for herself while wages have just sort of lazed around on the sofa, getting drunk. Productivity has grown 6 times more than pay since 1979. In the last ten years, the costs of education, housing, and medical care have ballooned, while the minimum wage has held steady at $7.25/hour. Not only is this financial climate hard for the average American, it’s going to be hard for a LOT of people, when the purchasing power of the middle class dwindles away to nothing and the bottom drops out of the whole contraption.

And there’s plenty of room for it to keep dropping! Because it turns out that a LOT of tech’s “innovation” just means “circumventing labor laws in ways that nobody’s made illegal yet”. Sometimes the tech world finds cools ways to get money and opportunities to people. Think of crowdfunding, or subscription services like Patreon that let middle-class artists do their thing sustainably.

But often, you instead wind up with companies like Uber, Lyft, and Favor. Rideshare apps view their drivers several different ways. They tell the government that they’re independent contractors. Drivers often claim that they’re running a small business, with the rideshare app’s help. Internally, (and to the SEC) they think of their drivers as the customers. The people who call for rides aren’t the customers—they’re the product that the app delivers to their customer, the driver.

What all of this means is that rideshare companies don’t have to pay minimum wage. They don’t have to offer benefits, like time off or healthcare. If the people who work for you are your customers, instead of your employees, you don’t have to take care of them the same way. (Funny how that works out, right?)
And in some ways, I can see the temptation to do things this way. Insurance is expensive, and it’s kind of wild that we make employers pay for it. Somehow saddling small businesses with that expense is considered the “conservative” option; I’ll never understand how that’s supposed to be good for the market. We’re the wealthiest nation in the world, and yet we’re just about the only country that puts the burden of healthcare on business owners instead of the government.

But here’s the thing: That’s how health care works in this country! It’s what we have. We have a public option, technically. But it’s been systematically gutted to the point of uselessness, intentionally, by people who resent it being passed in the first place. So until we get some kind of national healthcare system, it’s on business owners to make sure that their employees don’t die because they can’t afford medical care. That’s the law, and that’s the ethical thing to do in our current situation.

And tech companies tend not to like that. So we get situations like Uber, where people who are clearly employees are being framed as literally anything else. Because the companies hiring them would rather burn millions trying to render their employees obsolete than spend that money keeping them alive. (Fun side note: Remember when one of those self-driving cars killed a woman because Uber forgot to tell their AI that humans can exist outside of crosswalks?)

And just like I understand why companies would try to dodge those costs (even if it’s clearly wrong), I also understand what AB5 was trying to do. They’re trying to close that loophole. They’re trying to stop companies from BSing about who is an employee and who isn’t. That makes sense.

So the bill defines freelancers with help from a court case, Dynamex Operations West, Inc. v. Superior Court (2018). The main features are

1. Is the worker free from the control and direction of the hiring entity. Is the person who hired them telling them where, how, or when to do the work?
2. Is the work being performed outside of the normal course of business for the hiring entity?
3. Is this work that the worker normally does, independently of this one business relationship? Do they genuinely have their own business in this field? Or is this “freelancing” something they’re just doing for one company?

You can immediately see some huge questions raised here. Among them:

– How strict do you define “telling someone how to do their work?” Because I’ve never had a creative assignment that didn’t come with some sort of deadline, right?
– How do you define “the normal course of business?” The normal course of business for a magazine involves hiring dozens of writers to write hundreds of pieces. Does that stable of writers suddenly get smaller if you can’t afford to give them all benefits?

And we’re already seeing fallout from this. Large multimedia platforms, from Vox to CollegeHumor, are laying off huge swaths of their staffs. Under the new law, writers aren’t allowed to submit more than 35 pieces in a year and still be considered freelancers. That means that these outlets were going to have to either cast a much wider net for their bullpens, or cut their staff and focus on a core group of (presumably grotesquely-overworked) people. Unsurprisingly, they chose the latter pretty universally.

And it’s not just writers. Musicians are getting hit, too. A petition to secure an exemption is nearing 50,000 signatures on change.org. Any creative endeavor other than “a day job with a desk at Disney” is going to involve a network of people floating in and out as projects start and end. There’s a lot of room for exploitation, and there’s a lot of room for quashing that exploitation. But right now, this bill is mostly just putting people out of work.

And just like California’s (much-needed, fantastic) privacy protection laws are having an impact across the country, (because you never know if the data you’re collecting is on a Californian!) so too is their (terrible) freelancing law rippling out. Because work doesn’t happen in offices anymore. It happens everywhere. I recently released a song with musicians from six countries performing on it. That wasn’t even something I was trying to do. That’s just where my friends were!

Now, my piece was just me getting together with some friends to have fun. But professional recordings happen that way, too, all the time. And right now, if the person on either the hiring or performing side of that equation is in California, that relationship is in jeopardy.

And of course, the really fun thing is, that a lot of the industries that were intended as targets of the bill are sidestepping it with court challenges. And many industries lobbied for exemptions, meaning that real estate agents, CPAs, lawyers, surgeons, referral agencies, and lots of others were exempt from the get-go.

So what we’re left with is a law that’s meant to protect people. But many of the people it should’ve protected aren’t covered by it. And many legitimate freelancers are getting screwed out of business relationships that they used to rely on. The big publications that they used as cash cows to pay their bills are either capping them at 35 articles, or letting them go altogether. It’s not hard to see that this is wildly misguided, and that it’s causing more harm than help. We’ve got to pump the brakes on AB5 and try to figure something else out.

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Politics

How USMCA is different than NAFTA and if/when it will finally be passed

(POLITICS) The USMCA should be set to replace NAFTA early in the year, which will help small business and real estate alike with easier trade.

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USMCA signing

The United States-Mexico-Canada Agreement (USMCA), which has been a priority for President Trump, is one step closer to replacing NAFTA. Amid the impeachment hearings, the House of Representatives passed the USMCA by a vote of 385-41. The Senate must still approve the agreement, but according to CNBC, once the Senate gets back in session in January 2020, the agreement will pass.

The USMCA is a renegotiation of the North American Free Trade Agreement (NAFTA). It was informally agreed upon by President Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto in 2018. However, each country’s legislature must approve the agreement before it is ratified. Mexico’s legislature has ratified the agreement, but Canada has not. It is anticipated that the agreement will be re-introduced to the Canadian Parliament this session.

What’s the difference between USMCA and NAFTA?

NAFTA was created to reduce restrictions on trade between Mexico, Canada and the United States. It was to increase market access and investments between the North American countries. President Trump has referred to NAFTA as “the worst trade deal ever made.” The USMCA builds on NAFTA, but does alter some of the provisions. It’s unknown when the agreement will go into effect. Canada has not ratified the agreement.

How will the USMCA affect small businesses?

The official text of the USMCA hasn’t been released, but we do know a few of the provisions. The biggest impact for businesses may be in the automobile industry. Under USMCA, 75% of auto components must be manufactured in Mexico, U.S. or Canada to be eligible for zero tariffs. Under NAFTA, the figure was 62.5%. In addition, by 2023, 40% of workers who assemble cars or trucks must make at least $16/hour.

The USMCA reduces the timeline for brand-name biologic prescription drugs to be produced as generics. Some popular biologics include Humira, Lantus and Botox. Another key component of the agreement is opening the Canada dairy market. US farmers can now export up to 3.6% of Canada’s dairy market. The National Association of Realtors® (NAR) supports the USMCA because it will make it easier for real estate investors to travel between the countries.

Although the USMCA is not in effect yet, it does seem likely that it will be ratified this year to provide more opportunities between Canada, Mexico and the United States.

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Politics

FFEE Act wants to save you from having to pay to freeze your credit

(POLITICS NEWS) The FFEE Act wants to help give consumers more rights more control over how credit agencies use their data.

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impulse ffee

Taking action

Following the compromise of consumer data from credit reporting bureau Equifax, Senator Elizabeth Warren (D-MA) and Senator Brian Schatz (D-HI) have introduced the Freedom From Equifax Exploitation (FFEE) Act.

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This act aims to give consumers more rights more control over how credit agencies use their data.

The bill

The bill is available here, but here is a few of the bill’s highlights:

  • Create a uniform, federal process for obtaining and lifting a credit freeze.
  • Preventing credit reporting agencies from profiting off the use of consumer information for the duration of a credit freeze;
  • Strengthening the fraud alert protection from 90 days to a one year, with a year renewable.
  • In ID theft cases, a 7 year fraud alert is created.
  • Require any credit reporting agency who charged a fee to freeze credit in response to the data breach to refund those fees,
  • Allow for an additional free credit report (consumers already get one under the Fair Credit Reporting Act through annualcreditreport.com)

Freezing credit

The most important feature here is the removal of any fee to freeze your credit. Currently, agencies like Equifax charge nominal fees to freeze credit (anywhere from 3-10) dollars. If this bill passes – not only will that service be free, but it will restrict the way credit agencies use that information while the freeze is active.

The idea behind making this free also keeps credit companies, whom many believe are responsible for the security of credit information, from profiting off information breaches. Given that many financial advisors have advised those impacted to freeze their credit, this would be a benefit to consumers.

It is important to note here that Equifax has suspended the fees to freeze credit for the next month.

A credit freeze restricts access to your credit report. Simply put, it requires the credit agency to contact you first to ensure it was you who applied for credit, thus making it harder for you to apply for credit. You would need to unfreeze your account to apply for new credit. You must also freeze credit with each bureau, which can lead to some expenses as you must pay anytime to lift a freeze.

Remember: a credit freeze doesn’t impact current accounts or your credit score. If you apply for credit often, or open new accounts often, then a credit freeze may not be for you.

Lots of names

The bill has several original co-sponsors, including Senators Sanders, Franken, and Blumenthal. Companies like the National Consumer Law Center, Americans for Financial Reform, CREDO, and the Consumer Federation of America all have also endorsed the bill.

#CreditFreeze

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