Tag Archives: consumer choice

Walker signs bill rolling back auto insurance minimums

By Jason Stein
Milwaukee Journal Sentinel
April 12,2011

Madison — Mandated increases in auto insurance coverage will be rolled back under legislation signed by Gov. Scott Walker on Tuesday.

The measure rolls back coverage minimums passed by the Democrat-controlled Legislature in 2009 but would still require motorists to have coverage.

“This is one more step toward empowering consumers across the state of Wisconsin,” Walker said at a Capitol bill-signing.

Republicans, who now control state government, argue that the higher coverage requirements enacted as part of then-Gov. Jim Doyle’s 2009-’11 budget are raising insurance costs for consumers, especially hurting those least able to pay premiums. Drivers should have the option of purchasing the lower coverage levels, they say. Some Democrats also supported the repeal legislation.

Supporters of the higher coverage amounts say the lower minimums were outdated and overdue for an increase because they were set in the 1980s. Since then, health care costs for accident victims have skyrocketed, they say.

The group Citizen Action of Wisconsin has released a report that questions insurance industry claims that changes made by Democrats caused an increase in insurance costs of at least 33%.

Wisconsin historically has had some of the lowest car insurance rates in the country.

The website carinsurance.com lists Wisconsin car insurance rates as of March as being 40% below the national average – similar to the rates in the surrounding states except for Michigan, where rates are slightly higher than the national average.

Andy Franken, president of the Wisconsin Insurance Alliance, pointed out that even though rates may be low, the actual cost to consumers could be higher simply because they’re required to buy more coverage.

Under the old law, drivers with insurance were required to carry minimum liability coverage of $25,000 for the injury or death of a person; $50,000 for the injury or death of more than one person; and $10,000 for property damage.

The Republicans restored those limits from the current $50,000, $100,000 and $15,000 limits, respectively.

Among other provisions, the legislation would reduce minimums for underinsured motorist coverage to $50,000 per person and $100,000 per accident, from $100,000 and $300,000. The repeal measure would ban “stacking” of coverage, in which drivers could use coverage from up to three of their vehicles to help pay costs from an accident involving just one of the vehicles.

To read more click here.

Lincoln County officials join raw milk debate

By Steve Kohlmann
Wausau Daily Herald
April 7,2011

Jeff Utech’s organic goat farm produces gallon upon gallon of milk for pasteurization each day.

But Utech and his wife, Janet, don’t drink that stuff. Instead the family drinks milk almost directly from the goats’ udders.

“We used to put our coffee cup under the goat,” Janet Utech said Tuesday morning. Now the couple simply fills a canister with the raw milk to be used for coffee, Jeff Utech said.

Fans of raw milk like it because it contains live enzymes believed to help the body.

The Utechs, residents of the town of Maine, operate a 160-acre goat farm and they want the state Legislature to legalize the sale of raw milk in Wisconsin so that others can consume unprocessed milk, too. Currently, Wisconsin law bans the sale of unprocessed or raw milk.

“Everyone should have the right to buy whatever food they think they need for their family,” Jeff Utech said as he milked his goats Tuesday. “In (the pasteurization) process, they spin the milk so fast that it presses the molecules and it’s not good for the body. It’s harder to digest.”

Raw milk has been under debate in Wisconsin for the past two years between those who believe the unpasteurized substance has benefits for humans and those in the medical industry who warn that harmful bacteria can cause illness.

Now the debate is being re-introduced in the state Senate and officials in Lincoln County are taking part in the discussion.

Shelley Hersil, director of the Lincoln County Health Department, has proposed that the Lincoln County Board’s Board of Health send a letter to state lawmakers opposing the measure.

Raw milk contains pathogens that can cause people to become ill, Hersil said.

“We do not approve of this legislation because it can cause disease and food-borne illness in the county,” Hersil said during debate on the issue at a Lincoln County Board’s Board of Health Committee meeting last month.

But committee member Bill Zeitz of Merrill said he is in support of the proposal. Zeitz keeps goats on his property and consumes raw milk, he said.

To read more click here.

Steve Kohlmann: State must update telecom law

By Steve Kohlmann
April 5,2011

Dear Editor: In today’s tough economy, Wisconsin needs to do everything it can to attract new jobs and investment to our state. One long-overdue policy change we can make to spur economic growth and create jobs is to modernize Wisconsin’s telecommunications law. With Wisconsin facing a $3.6 billion budget deficit, this is a simple update that won’t cost taxpayers a dime.

Outdated regulations on landlines prevent more investment in new technologies that are fueling economic growth in other states. Current law requires providers to invest resources in old, copper line technologies that consumers and businesses no longer desire — instead of investing those resources in the technologies of the future: wireless and broadband.

Ohio and Illinois both modernized their telecom laws last June, and since then have seen a combined $1 billion in announced investment and nearly 29,000 estimated jobs. Wisconsin could reap similar benefits.

Advancing a new telecommunications law will help Wisconsin become a leader in the Midwest for technology jobs and help keep and expand the valuable manufacturing jobs Wisconsin is known for.

The longer it takes Wisconsin to update its telecom laws, the farther we fall behind. That’s why the Independent Business Association of Wisconsin has joined a coalition of over 100 economic development, business, community and education leaders in urging lawmakers to update Wisconsin’s telecom laws as soon as possible.

If Wisconsin is to be open for business we’re going to have to walk the walk.

Steve Kohlmann

President, Independent Business Association of Wisconsin


Bill lowering car insurance levels passes

By Associated Press
April 5,2011

A bill designed to lower car insurance rates is headed to Gov. Scott Walker.

The Senate passed the bill on Tuesday. It has already cleared the Assembly and an earlier nearly identical version had also passed the Senate earlier this year.

Insurance would still be mandatory under the Republican bill, but motorists would have to purchase less coverage liability and uninsured drivers.

The bill would wipe out higher minimums Democrats approved in 2009. Republicans maintain those levels have made car insurance more expensive.

Most of the changes took effect in 2010 after more than 20 years of no changes.

The bill would reduce the minimum coverage for liability and uninsured drivers insurance. The changes would take effect six months after Walker signs the bill which he support.

Payday lender monitoring system now in place

By Shamane Mills
Superior Telegram
March 30,2011

A Wisconsin database overseeing all payday lenders is now up and running. It’s how regulators will make sure quick-loan companies are complying with a law that took effect Jan. 1.

The database operated by the Division of Banking will record every payday loan transaction. That way, regulators can track the number of times a loan is rolled over and whether customers are taking out loans they can’t afford; the new law says customers can be liable for no more than 35 percent of their monthly income.

Bob Andersen is with Legal Action of Wisconsin; the organization helps low income people with legal matters in 39 counties. He says the state database will shine some light on an industry that has more than 500 locations around Wisconsin and made $1.6 million of loans last year. Andersen says “unfortunately, we know from experience in other states that payday loan organizations have found ways to circumvent the law. That’s what we’re looking for (through this database) we’re hoping this works.”

The new regulations on payday lenders do not cap interest rates but if that or other practices pose undue burdens for customers, Andersen says the database information will bear that out. He says “for the first time it actually collects information on what’s actually taking place out there and that will be the basis for people to decide are there some other things that should be done as far as regulation.”

The law on payday lenders prevents vehicles being used as collateral and loans must be at least 90 days long. The disclosure agreement has to be in both English and Spanish.

Telecom Modernization: What it Means for Consumer Choice

By George Klaetsch
March 31,2011

For generations, Wisconsin has been known as a leader in reforms. It is only natural then, that the state would want to continue to lead when it comes to modernizing our current telecommunication regulations.  However, this is not the reality.  Illinois, Indiana, Michigan, Iowa and Ohio have all recently updated their telecommunication regulations, while Wisconsin has failed to act. 

The freedom for companies to invest in new technologies will create a new competitive marketplace. In 1993, Congress auctioned off additional radio spectrums believing that new competitors would materialize. This spectrum is now used by wireless phones, and has resulted in the cost per minute of wireless phone calls dropping from 47 cents in 1994 to 6 cents in 2007. Without the new spectrum, companies would have been paralyzed and unable to invest in the wireless network we have today. Just three years later, in 1996, Congress eliminated cable rate regulation although cable operators retained 91 percent of all subscribers. Congress did this because new competitors from satellite television were becoming more popular. Since the deregulation of the cable industry, companies have invested $145 billion to build two-way interactive networks with fiber-optic technologies. That investment paved the way for more channels and choices than ever before.

Today, landline providers face increased competition from Voice over Internet Protocol providers (VoIP), cable operators and from wireless providers. However unlike VoIP, cable operators and wireless providers, landline providers are handicapped by antiquated telecommunication regulations that were last updated in 1994. According to the FCC, approximately 99.6 percent of the U.S. population, and 98.5 percent of people living in rural areas have one or more operators offering mobile telephone service. The increased competition in other forms of communication limits the ability of landline phone providers to dictate rates or other terms that harm consumers. Comprehensive reform will allow landline providers to improve their products and services, as well as adjust their pricing to respond to their new competitors.

Comprehensive reform allows for more competition, and just as we saw with wireless phone deregulation, costs to consumers will decrease, while choice increases. Continued regulation jeopardizes the ability of landline telephone providers to provide a competitive product and compete in today’s marketplace. A recent study by The Economist predicted that if consumers discontinue service at the current rate, “the last cord will be cut sometime in 2025”, leaving one less choice for consumers.

To find out who your legislator is and contact them regarding this issue click here.

Want cash from an ATM? Pay a $5 fee

By Blake Ellis
March 17,2011

ATM fees are on the rise at some of the country’s biggest banks.

Chase, for example, is testing out $5 fees for non-customers. That means if you stumble upon a Chase on your way to dinner and decide to take out 20 bucks, you’ll pay a 25% fee. And that doesn’t even include what your own bank charges you for going out of network, which is typically around $3.

JP Morgan Chase is currently testing the $5 ATM fee in Illinois and a $4 ATM fee in Texas — both for non-customers who use its ATMs — to see if they bring in enough revenue to introduce nationwide, according to sources familiar with the tests. A Chase spokesman declined to comment.

Out of the bank’s network of 16,000 ATMs, more than 20% — or about 3,600 — are located in these two states. Chase spent an estimated $400 million to build the entire network and pays $200 million a year to run it. So the bank is making non-customers pay a significant amount for the convenience of using this large network.

Meanwhile, HSBC Bank USA this month started charging all non-customers a $3 fee for using its ATMs, saying that this pricing is more competitive. Previously, about 60% of its ATMs charged a $3 fee for non-customers, while the remaining 40% charged either $1.75 or $2.50.

While other megabanks like Wells Fargo, Bank of America and Citi haven’t made similar changes yet, CardHub.com CEO Odysseas Papadimitriou says they’re not far away.

“It’s easy to compare debit cards by looking at the monthly fee, so banks are going to try to minimize the monthly fees and load you with fees in different ways — and ATM fees are going to become one of the most popular ways to do that,” said Papadimitriou.

Even some of the banks that CNNMoney once called the least evil — because they had free checking and zero ATM fees for customers — are having to reconsider.

PNC Bank, for example, is keeping its free checking account. But starting in September, it will stop reimbursing ATM fees for free-checking customers who use non-PNC ATMs and charge them $2 a pop.

Starting Sept. 12, customers who want to avoid the ATM fees must open a Performance Checking account and carry a balance of $1,500 or pay a $10 monthly fee, a PNC spokesman said.

TD Bank made a similar change. While it used to let customers use any ATM free of charge, the bank is now charging $2 for customers who use out-of-network ATMs — unless you have a “deeper relationship” with the bank (which translates into carrying a high minimum balance and paying a monthly fee of $25).

“We changed our policy for basically two reasons — in part because of competition in the industry and regulatory environment, but also because when we had this policy we had a smaller network,” a TD spokeswoman said. “Now that we have invested in thousands of ATMs and mobile banking, people can get access to money when and how they want it, and it’s a fee people can avoid if they want to.”

The changes in ATM fees come on the heels of a proposed rule that would cap the fees banks charge retailers each time customers swipe their debit cards to make purchases.

CardHub expects the proposed Durbin amendment to cost banks an average of $27 per card per year — adding up to a loss of more than $13 billion a year for the industry. So along with adding fees for non-customers or eliminating rebates for out-of-network ATMs fees, banks may even start making their own customers pay to use their ATMs.

More banks may also begin offering prepaid cards, said Papadimitriou. Since they wouldn’t be regulated by the Durbin amendment, banks would still be able to collect the same “swipe fees” as they do now.

“They need to maintain a certain profitability for the services they provide, so they’re going to get the money one way or another,” he said. “They will be experimenting with a whole gamut of things, and ATM fees are just one way of getting the money back that the Durbin Amendment is taking away from them.”