After going after credit card companies for deceptive practices, the agency has joined the Federal Trade Commission in proposing another seemingly pro-consumer set of rules.

The latest effort has to do with risk-based pricing. Most lenders determine the interest rate for a customer based on his or her credit report. If your credit score is low, lenders will think you pose a higher risk of not repaying the loan and give you a higher rate.

Together with the Federal Trade Commission, the Fed has proposed requiring lenders to notify borrowers taking out a mortgage, auto loan, credit card or any other loan when they are being offered higher interest rates or other inferior terms because of poor credit histories. "Many creditors offer more favorable terms to consumers with better credit histories," the two agencies acknowledged in a joint statement released last week.

Congress directed the agencies to take this action when it passed the Fair and Accurate Credit Transactions Act of 2003.

Under the proposed rules, "a risk-based pricing notice" would "generally" be provided to the consumer after the terms of the loan have been set but before the borrower enters a contract for the transaction, the agencies said.

Why generally? That's because the rules allow for some exceptions. The most significant one permits creditors who don't want to provide the risk-based pricing notice to give all their customers their credit scores and explanatory information instead. If a credit score is not available, the lender can provide "an alternative narrative notice," the agencies proposed.

Travis Plunkett, the legislative director of the Consumer Federation of America, called it a "giant exception."

"That's not particularly helpful," he said. "Our fear is this will become just another generic notice that people get when they apply for credit that is not individualized enough to tell them they've gotten a less than favorable offer."

"While these agencies are providing some useful information to consumers, they're not going as far as the law requires them to in telling consumers why they've been denied the most favorable offer of credit they can get," he added.

The agencies won't make a decision on the rules until the public has had 90 days to comment.

You can submit comments to www.federalreserve.gov. or www.regulations.gov. You can also email: regs.comments@federalreserve.gov, with the docket number (R-1316) included in the subject line. Fax (202) 452-3819 or (202) 452-3102. Or mail them to: Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve
System, 20th Street and Constitution Avenue, N.W., Washington, D.C. 20551.

That, not surprisingly, grabbed the average consumer's attention, judging by all the e-mails and phone calls this personal finance writer received.

But there was a part of the 510-page proposal that was largely overlooked. The Federal Reserve also proposed banning "unfair or deceptive" practices related to overdrafts in deposit accounts.

You may know it as overdraft protection. If you overdraw your account, many banking institutions will cover that payment, but they'll usually charge you a fee for it.

The Federal Reserve along with two other banking regulators, the National Credit Union Administration and the Office of Thrift Supervision, have taken issue with financial institutions that assess overdraft protection fees without giving consumers the right to opt out of such program.

If the rules are finalized, which the Federal Reserve is hoping will happen by the end of the year after the public has had 75 days to comment, all banks, credit unions, and other financial institutions would, among other things, have to give their customers the right to opt out. They would also have to disclose on periodic statements the total amount assessed in overdraft and returned item fees. At the moment, only those institutions that promote or advertise their overdraft protection programs have to do that.

And if they're providing account balances through some sort of automated system, they would have to disclose how much is available for the customer's immediate use, not what is available when the bank covers an overdraft.

"Historically, banks paid occasional overdrafts on an ad hoc basis, but today overdrafts are often paid routinely using automated programs," Federal Reserve Chairman Ben S. Bernanke said when announcing the proposal last week. "While some consumers prefer to have most of their transactions honored or approved, overdraft services can be expensive and other consumers may prefer not to exceed their account balance. The proposal seeks to give consumers greater control, by ensuring they have ample opportunity to opt out of overdrafts."

Consumer groups said the proposal does not go far enough. They argue that consumers should have to opt in to overdraft protection programs rather than opt out.

"The OTS and Fed proposal show that these agencies recognize that abusive overdraft loans are a significant problem," said Eric Halperin, DC director of the Center for Responsible Lending. "However, they would continue to allow banks to enroll customers, who never signed up for it, into the most expensive credit program the bank offers."

They also urged the agencies to consider banning overdraft fees caused by check holds resulting from a bank's policy to delay the availability of deposited funds. "These rules should also recognize that it is an unfair practice for a bank to charge an overdraft fee or a bounced check fee for a problem caused by the bank's decision to place a hold on the consumer's check deposit," said Gail Hillebrand, financial services campaign manager of Consumers Union.

It's now up to the public to weigh in. The proposed rules can be found at www.federalreserve.gov.

The Northern Virginia woman who called me has been buying from an alternative gas supplier for the past two years. She saw that only in two months out of 24 was the market rate higher than the rate she and her spouse had signed up for. She estimates that in total, the switch cost them an extra $500. When she called to see if they could cancel, she was told they would have to pay $50. Her husband didn't want to pay. But in hindsight, she realizes now, they should have. They would have come out ahead in the long run.

Suffice it to say, she's not renewing.

When I started talking to these folks, I wondered why in the world anyone would bother doing this? Then I remembered an article I read years ago about happiness researchers who say there are two kinds of shoppers: maximizers and satisficers . (The latter is derived from the word satisfice which means "to decide on and pursue a course of action satisfying the minimum requirements to achieve a goal.") Maximizers won't stop until they've found what they're looking for. Satisficers are more likely to compromise. Satisficers, if I'm remembering correctly, are happier people.

I'm more of a maximizer. But since I read about that research I've tried to mend my ways. When I find myself shopping past the point where I'm enjoying it, I say to myself (in my head of course and not aloud) 'satisficer!' as if invoking it would somehow make me that way (a la the Wonder Twins). It hasn't worked really. Far more effective has been shopping with an infant who has no patience for sitting in grocery carts. Recently, I made the mistake of stopping to ponder the relative merits of Oaty-os versus Cheerios only to look over and see her gingerly pick up a jar of baby food and, before I could grab it from her--smash it on the floor.

I think I already know the scientific term for that type of shopper: mom.

Are there any other wanna be satisficers out there? And do you think we would really be happier if we had bought that couch last year that was the right color and height but wasn't cushiony enough?

That money would be your rebate check, or in government parlance, your "economic stimulus payment." The IRS announced last week that it had begun depositing money in taxpayers' bank accounts and expected to continue the payments through mid-July. The agency has posted a schedule for the rebates on its Web site, along with a calculator to help you figure out how much you're going to get.

Retailers, of course, are wasting no time in helping you figure out how to spend it. They're rolling out special incentives to lure you into their stores -- even offering to cash your check. So today, The Checkout brings you a roundup of some of the deals we've seen. Feel free to add your own in the comments section or share how you plan to spend your stimulus check.

Wal-Mart: The world's largest retailer will cash your rebate check for free and also cut prices on items from sports drinks to shampoos.

Sears and Kmart: The two chains will offer a 10 percent bonus when rebate checks are converted into store gift cards.

Safeway: Starting May 14, the stores will cash stimulus checks for free and give Club Card customers a 10 percent discount certificate good on their purchases that day or the following day. The program runs through July 19.

Circuit City: The nation's second-largest electronics retailer will accept stimulus checks as a form of payment. Any remaining balance will be returned to shoppers as Circuit City gift cards. It also discounted several categories of electronics.

Shoppers Food & Pharmacy: The company will convert the rebate checks into store gift cards worth up to $300, adding $30 on each card. The promotion runs through July 31.

Office Depot: It launched an office equipment leasing program from small businesses called SmartWayLeasing.

Take it away Jane:

Since last March, the price of a dozen eggs has jumped 36 percent; a gallon of milk is up 23 percent. Bread, meat and other staples are up, too.

New studies show that shoppers are taking various approaches to cutting costs. Some cut back on the number of trips they make to the grocery store in order to save on gas. Some go to many stores to get the best prices, and stock up when things are on sale.

Here are a few tried-and-true ways to keep your bill under control:

Shop around: The price of a gallon of milk can vary widely. I checked prices at three stores in the Woodbridge area and found a range from $3.38 to $4.49. Moreover, experts say, such staples are often, counter-intuitively, cheaper at drugstores or convenience stores where the products are loss-leaders.

Shop around - inside the supermarket: Virtually identical items can vary in price depending on where you buy them inside the store. The cheese in the Dairy section is almost uniformly cheaper than the exact same stuff at the deli or gourmet cheese case. The same goes for cold cuts.

Buy what's cheap - now: Buy what's on sale and use club cards to get lower prices. If one of your staples is on sale and you have room in the pantry, stock up to avoid paying higher prices.

You'll also save money if you buy what's in season. Asparagus and mushrooms are in the stores now, but soon there will be a bounty of squash, tomatoes, berries and stone fruit. Enjoy it now and, if possible, make some tomato sauce or canned peaches. It will save you money and the food will be tastier and healthier to boot.

The Food and Drug Administration (FDA) regulates the use of BPA in products that come into contact with food, such as baby bottles and baby formula cans. When my colleague Lindsey Layton first reported on the NTP's latest conclusions, FDA was mum on the findings. (They have since given her an interview on a follow-up story.)

Inside the agency, however, BPA has been keeping FDA officials busy. Recently, the American Chemistry Council, the trade group for the nation's largest chemical companies, asked the FDA to update its position on BPA. FDA has also had to contend with House Energy and Commerce Committee Chairman Rep. John Dingell (D-Mich.) and Oversight and Investigations Subcommittee Chairman Rep. Bart Stupak (D-Mich.) who have been looking into the government's position on BPA ever since environmental activists raised concerns last year that a contractor that was preparing a draft of the risks of BPA for the NTP also worked for the chemical industry.

Last week Dr. Michelle Twaroski, a supervisory toxicologist in the food packaging division of FDA, agreed to chat with us about where the agency's thinking on BPA is and where it's headed.

The Checkout: Given what NTP said recently, and the reaction of retailers such as Wal-Mart and Toys R Us, should consumers be freaking out? The science isn't totally conclusive. What are we supposed to think?

MT: Right now, FDA doesn't recommend that anyone stop using these products. However, concerned consumers should know that several alternatives to polycarbonate baby bottles exist, including glass baby bottles.

The Checkout: Is FDA going to take another look at its position on BPA?

MT: FDA has continuously monitored the data on BPA and has been actively evaluating BPA since 2007. Our review is in the process of evaluating the conclusions reached by the National Toxicology Programs expert advisory committee to the Center for the Evaluation of Risks to Human Reproduction (CERHR). That committee had reached a conclusion of "some concern" for neural and behavioral developmental toxicity. This concern was reiterated in the NTP draft brief released in April 2008; however, they also expressed "some concern" for developmental effects on the prostate gland, mammary gland, and an earlier age for puberty in females. We consider these conclusions very seriously and are actively reviewing the concerns they've raised. In fact, the Commissioner this month formed an agency task force on BPA. This task force will be developing recommendations for him with regard to FDA regulated products containing BPA.

The Checkout: Dingell and Stupak have called into question FDA's reliance on two chemical industry funded studies to support FDA's position on BPA. Can you respond to their concerns?

MT: We are aware of the questions raised regarding the two studies; However, FDA's on-going review of BPA has involved more than the two studies sponsored by industry. We have weighted the two industry studies as pivotal because they include regulatory protocols which were expanded to address the issues of concern at the time of their initiation, they included a large range of doses, including low doses, to allow for evaluation of a dose response, and all raw data was submitted to the agency for our independent evaluation. Though these studies were sponsored by industry, they were conducted by a well-known laboratory and were developed in consultation with our European counterparts and FDA was briefed on them. These studies were designed to answer questions that had risen about BPA at the time they were initiated. The new safety evaluations that have been published this April, the NTP draft Brief and Canada's, as well as that performed by NTP's expert panel, raised questions from newly evolving areas of research. As mentioned, we were already in the process of reviewing one set of endpoints and, with the new task force, we will be reviewing all the concerns raised in our new evaluation of BPA.

The Checkout: So FDA is going to reevaluate its position on BPA?

MT: Yes. The task force is performing a risk assessment on BPA and will submit its recommendations to the commissioner.

Even if you were vigilant, you would still probably end up losing out. The fees usually appear deceptively small, ranging from less than 1 percent of assets to more than 2 percent, depending on the size of the plan and on the level of services offered. But over the course of a full working career, they can result in a 20 to 30 percent reduction of savings, according to the Center for American Progress, a liberal think tank.

The issue has become a hot topic on Capitol Hill and the hallways of the U.S. Department of Labor, which is working on coming up with new regulations to maximize workers' retirement savings.

The House Education and Labor Committee has approved, by a vote of 25 to 19, the 401(k) Fair Disclosure for Retirement Security Act (H.R. 3185).

The law would, among other things, require plan providers and administrators to better disclose fees, and to break them down into four categories: administrative fees, investment management fees, transaction fees, and other fees. To increase transparency, it would require providers to disclose any financial relationships that might constitute conflicts of interest. Workers would also get better information about the risks and returns of their investment options.
The Department of Labor would then have the authority to enforce the new rules and levy any fines.

For too long, companies in the financial services industry have maintained a stranglehold on retirement savings that they didn't earn and that don't belong to them,

The purpose of this legislation is to take these hard-earned savings away from the special interests and return them to their rightful place -- the retirement accounts of American workers.

The next step is a full vote by the House of Representatives. A spokesman for the Education and Labor Committee said it is unclear when that will happen, but if you are an employee with a 401(k) plan, now is probably a good time to start paying attention.

Compare the new logo (top) with the old logo (bottom). (Images Courtesy of Starbucks)

"She is a siren," spokeswoman Bridget Baker corrects.
"A siren has a split tail and a mermaid has a single tail."
She pauses.
"This is my job."

Well, we had to ask. And that's because the logo unveiled this month to celebrate the new Starbucks' Pike Place Roast reveals the saucy siren in all her glory -- flowing hair, the outline of her ample chest, exposed midriff and a tail in each hand.

The all-brown logo is a replica of the one the chain used when it opened its first store in Pike Place in Seattle in 1971. Back in those days of free love, the siren also flaunted her belly button and bare breasts. When the company resurrected her in 2006 for its 35th anniversary, "we had some customer feedback," Baker said. "We altered it a little bit."

The belly button has disappeared. Her long locks offer a hint of modesty over her breasts. "Her hair has perhaps just blown over the front a little bit more," Baker said. The full-bodied siren will grace Starbucks cups through the end of May, when she will revert to the more stylized version and the logo will return to green. (But Pike's Place Roast, of course, is here to stay.)

We must admit that we are not the first nor the only to notice this trend. Deadprogrammer's Cafe has this chronology of the logo, with photos of the more anatomically correct original -- you decide if it's NSFW. Brand Autopsy has this excellent history of the logo. And The Washington Post's own Colby King wrote this Pulitzer Prize-winning commentary on how Starbucks in Saudi Arabia don't picture the siren at all in a nod to "social norms."

But personally, we (and by we, I mean me) don't understand all the fuss over the old school siren. She kind of looks like she needs to make friends with some crunches and sidebends. The green version is way hotter.

The floor is open for debate.

I know consumers are all about control and customization these days, but it does take time and research. I tried to liken the whole energy shopping experience to cell phone service. Every two years, I decide whether my plan still works for me and then I shop for a new phone. Should picking an electricity and gas supplier be any different?

Has anyone out there attempted this? If you live in DC, Maryland or Virginia, tell me about it at shina@washpost.com.

Straight from the e-mail from spokesman Bob Friedland:

Toys"R"Us, Inc. is committed to the safety of all its customers and is vigilant about staying current with emerging scientific and other thinking about ingredients in products sold in its stores.
While the FDA has not changed its position on the safety of products made with Bisphenol-A (BPA), in light of growing consumer concerns on this topic, the company has been working with manufacturers to phase out all baby bottles and other baby feeding products containing BPA in its Toys"R"Us and Babies"R"Us stores nationwide. This process is ongoing and is expected to be completed before the end of 2008.

I had called the company about BPA last week as I followed up on the our story about a draft report by the National Toxicology Program that found "some concern" that the chemical could cause behavioral changes in infants and children and early onset of puberty in females. At that time, Toys 'R' Us sent me a fact sheet saying that they offer a wide array of products, some made with BPA and some without.

Then I reported that Wal-Mart would stop selling baby bottles made with BPA by early 2009 in its U.S. stores. On Friday, Canada became the first country to ban the chemical. (In case you missed it, check out my colleague's Lyndsey Layton and Chris Lee's story: "Canada Bans BPA From Baby Bottles.") I got the first updated e-mail from Toys 'R' Us on Sunday, and another one this morning.

Meanwhile, the American Chemistry Council maintained that the products made with BPA are still considered safe and that "consumer product bans are not supported by science."

"The weight of scientific evidence, as assessed by Health Canada and other agencies around the world, provides reassurance that consumers can continue to safely use products made from bisphenol A," stated Steven G. Hentges, Ph.D., of the American Chemistry Council's Polycarbonate/BPA Global Group. "Consumer products made from polycarbonate plastic and epoxy resins, including products for infants and children, are accepted as safe for use, and used, around the world."

I reported this morning that Wal-Mart said yesterday it will sell only BPA-free baby bottles in its U.S. stores by early next year -- one day after its Canadian division halted all sales of baby bottles, pacifiers, sippy cups, food containers an water bottles containing the chemical. That's a major move by the biggest retailer in the world.

It comes at a time when debate over BPA has reached frenetic levels. My colleague Lyndsey Layton reported earlier this week on the National Toxicology Program draft report that found there is "some concern" that the chemical, which is used to make plastic, could cause behavioral changes and early onset of puberty in girls.

Meanwhile, the American Chemistry Council maintains the mass hysteria is currently unwarranted. It has sent a letter to the Food and Drug Administration urging the agency to conduct its own review of the chemical.

Even though BPA bottles may be disappearing from store shelves, the debate over the toxicity of the chemical could continue long after your tiny tyke has put aside his bottle and started asking for steak and fries. If you want to voice your opinion, the National Toxicology Program is accepting public comments on its draft brief through May 23. You can send them to:

Dr. Barbara Shane
Executive Secretary for the NTP Board of Scientific Counselors
NTP Office of Liaison, Policy and Review,
NIEHS, P.O. Box 12233, MD A3-01
Research Triangle Park, NC 27709
Tel (919) 541-4253
Fax (919) 541-0295
shane@niehs.nih.gov

Courier address:
NIEHS
111 T.W. Alexander Drive, Room A322
Research Triangle Park, NC 27709

--Ylan Q. Mui

The big topic of discussion was the recent news that the USDA's Food Safey Inspection Service was considering treating E. coli O157:H7 found on intact meat or primal cuts used for roasts and steaks as an adulterant. Currently, it's only considered an adulterant in ground beef.

To part the weeds for you: Making someting an adulterant has legal implications and imposes responsibilities on meat processors and slaughterhouses. Ground beef found to be adulterated can't be sold raw to consumers.

FSIS is considering changing its policy after what happened in 2007, when there was a surge in E. coli O157:H7-related beef recalls and outbreaks, culminating in the Topps recall. (E. coli O157:H7is a variety of E. coli, a bacteria found in the intestines of humans and other animals, that releases a toxin that damages the lining of the intestine and, in the very young and old, can lead to kidney failure.)

The agency appears to be trying to reduce the possibility of contamination at retail stores or smaller processors that may use scraps from roasts and steaks to make ground beef. Contaminated steaks can also pose a risk of cross contaminating home kitchens.

Consumer groups seemed to warm to the idea. But the American Meat Institute was not keen on it, releasing a statement later that read, "No policy change by government can alter the current scientific reality that bacteria exist on all fresh agricultural products."

On the first day of the meeting, FSIS officials made clear they hadn't made up their minds over what they plan to do. Then they broke for lunch. I was curious to see how this crowd eats. A good portion of the folks queued for the buffet, which consisted of, in this order: overboiled "baby" carrots, wild rice, tough pork chops, some sort of poultry, a few kinds of cake, and a very abbreviated salad bar with raw lettuce that no one hesitated to heap on their plates.

Some of the food safety advocates took one look at it and bolted for the door. (I think they went to a high-priced store up the street.) I stayed, partly because a microbiologist got in line behind me as did a USDA poultry inspector. I figured it couldn't be all that bad.The meat industry representatives also stuck around. (It would have been a really bad omen if they had been scared off.) So far, my intestines seem to be intact.

We'll keep you posted on the state of the intestines and FSIS's proposal.

Until then, if you're looking for guidance on how to make sure a little E. coli doesn't ruin your upcoming backyard bbqs, you can take a spin through Safe Food Park.

The report, which was released this week, also found that the theft of taxpayers' names and Social Security numbers to get work, then not pay federal taxes on the wages, is also on the rise. In those cases, the thieves take off with the wages while the lawful taxpayer is left with the IRS believing he or she did not report all of his or her income. The number of complaints of this type of fraud has more than doubled, the report noted.

In 2007 alone, the Federal Trade Commission received 56,125 complaints of identity theft involving either the filing of a fraudulent tax return or the use of someone else's identity to get a job, the report noted.
"Clearly, identity theft is a growing national problem that affects both taxpayers and tax administration," TIGTA's Inspector General J. Russell George said.

The report took the IRS to task for not doing enough to stem the problem. Identity theft related to tax administration is rarely recommended for prosecution, the report said. And if a taxpayer's name and Social Security number are misused, the IRS does not notify employers.

"The IRS has placed only limited emphasis on employment-related and tax fraud identity theft," George said. "The IRS's policy is that identity theft will only be investigated if it is committed in conjunction with other criminal offenses having a large tax impact."

In a response attached to the report, the IRS agreed that it could do more but said it has in recent years devoted more resources to combating identity theft. The agency said it is also limited in some ways.

For one thing, the agency said it relies on the Federal Trade Commission's Identity Theft Data Clearinghouse for information about such cases, but that there often are not enough details or personal information to support a prosecution.

The agency also said it cannot notify employers when wage information is not accurate on a tax return because it is illegal for the IRS to share taxpayer or tax return information with a third party.

Congress has taken note, holding a hearing on the topic this week. This is an issue that is surely not going to go away anytime soon.
--Nancy Trejos