The Consumers Council of Missouri (CCM) will present a Legislative Update on Sunday, April 18 from 4 to 6 p.m. at The Heights, 8001 Dale Avenue in Richmond Heights.

Representative Mary Still (D-25) will speak on Missouri’s payday lending crisis. Rep. Still is the sponsor of House Bill 2116, legislation which would reform the payday lending industry by reducing the outrageous triple-digit interest rates that are currently allowed in hope of bringing Missouri into the mainstream. In additions, Senator Joan Bray (D-24) and John Coffman, CCM’s General Counsel, will provide an update on utility issues.

“Our organization is the only statewide advocacy group for consumers,” said President Joan Suarez, “and we speak for the common interest of all Missourians. Presenting these legislative updates is one of the ways we keep consumers informed about what is happening in Jefferson City that will affect their families.”

This event is free and open to the public. For more information, contact Judi Roman at 314-647-9232.

April 18th – 4 to 6 pm

Richmond Heights Community Center

8001 Dale Ave.

Learn about what’s happening in Jefferson City that will affect Missouri Consumers.  Senator Joan Bray and John Coffman (and others) will give us an update and answer your questions. Stay informed – see you there.

If you’re looking for an easy way to stay on top of consumer information in Missouri, look no further than your favorite social mediums!  CCM is now on Twitter and Facebook, and there are three easy ways for you to get the information you need, depending on the kind of interaction you would like to have with CCM.

• Follow the Twitter Account

Follow us (Our username is @moconsumers.) to get up-to-the-minute information about consumer information as we–and others–post it.

• Become our Facebook Friend

You’ll simply receive notifications about new posts and any important developments with CCM.

• Become a Fan of CCM on Facebook

By becoming a fan of CCM you’ll not only receive notifications about new posts, you’ll also be able to ask us questions and give us feedback on the discussion boards about various consumer-related issues.

Last Tuesday, March 23rd the Federal Reserve gave final approval to the gift card provisions in the Credit Card Accountability Responsibility and Disclosure Act of 2009.  While these rules don’t eliminate the fees many consumers face for not spending funds quickly enough, they do protect consumers from some unexpected costs and further specify that the conditions and terms of the gift card must be clearly stated.Dormancy, inactivity and service fees on gift cards are now prohibited unless:

1. The consumer hasn’t used the gift card for at least one year;
2. No more than one of these types of fees is charged each month; and
3. The consumer is given proper and clear information about the fees

In addition, the expiration dates for the gift card funds must be at least five years after the issue date or five years after funds were last loaded onto the card.These provisions do not go into effect until August 22nd.  Missouri currently has no laws pertaining to gift cards or certificates.In addition, the St. Louis Post-Dispatch published an article about these new regulations on Sunday, March 28, that you may be interested in reading.

By Tim O’Neil
03/24/2010

The water company that serves much of suburban St. Louis is seeking a third rate increase since 2007, a request that would boost bills an additional 21 percent, roughly doubling the cost of tap water over four years.

It also wants to create a break for some lower-income customers.

Missouri-American Water Co.’s request is before the Missouri Public Service Commission. Before 2007, the last time Missouri-American won an increase was in 2000.

A 21 percent would boost the average residential customer’s bill by about $5.40 per month, or $16.20 every three months, the company says. Customers in some areas are billed by month, others by quarter. The current average monthly bill is about $30.

A spokeswoman for Missouri-American called the proposal necessary to continue upgrading an aging system and ensure a supply of clean water. A veteran consumers advocate calls it “one of the most dramatic utility rate increase requests we’ve seen.”

Missouri-American serves about 370,000 customers in St. Louis County, south-central St. Charles County and the Incline Village area in Warren County. It is owned by American Water Works Co. of Voorhees, N.J.

The Public Service Commission will hold three public hearings in the area beginning March 31. Evidentiary hearings are to take place in May at its office in the old Governor Hotel in downtown Jefferson City. The commission has until September to act.

Ann Dettmer, spokeswoman for Missouri-American, said the company has spent $177.5 million since 2007 improving and replacing water mains, pumps and equipment at its four water plants. The company maintains more than 4,650 miles of line in the metro area.

“We have to upgrade aging infrastructure,” Dettmer said. “We perform a vital service, and we have an obligation to make sure that our system delivers safe, reliable water.”

But John Coffman, general counsel for the Consumers Council of Missouri, said, “This seems like an awfully large rate increase for a case that doesn’t involve a new water plant or well. It’s the largest request by a water company that I can remember.”

For about 15 years, Coffman worked in the Missouri Office of Public Counsel, which represents the public before the Public Service Commission. He headed the office for four years until 2005, when he was fired by the administration of former Gov. Matt Blunt.

The Consumers Council of Missouri was co-founded in 2006 by Alberta Slavin, longtime consumer advocate and former chairwoman of the Public Service Commission. She died in 2008.

Christina Baker, senior counsel for the Office of Public Counsel, said the office promises to examine Missouri-American’s request carefully. “It seems like every major utility has requested a rate increase and customers are just more and more overwhelmed,” she said.

Also pending are requests by AmerenUE for an 18 percent boost and 6.9 percent more for Laclede Gas Co.

Dettmer, the Missouri-American spokeswoman, said the company seeks permission to reduce the “fixed fee” part of water bills for customers who qualify for utility-assistance programs. That fee now is $12.31 every three months but would drop to $10.96 each quarter if the discount is approved.

Missouri-American’s rate hike proposal is uniform for customers in St. Louis County and St. Charles County, although they have paid different increases in the past. St. Louis County customers had a 6.5 percent boost in 2007 and 20 percent in 2008. In St. Charles County, those increases were 8.7 percent and 27 percent.

On Tuesday, March 16, the Southeast Missourian published an article written by Chris Blank of the Associated Press which gave a good overview of the current AmerenUE rate case in Missouri.

Due to AP policy we cannot reprint the article on this site.

Missouri Public Service Commission is holding public hearings during the month of January on the $402 million rate request filed by AmerenUE.

More than 100 people attended the recent hearing in St. Charles County.  The St. Louis area hearings are scheduled of January 19 and 20.

Please check the Missouri Service Commission Website for locations and more details.

Brother, can you spare some dimes for AmerenUE?

By Editorial Board

To AmerenUE, $37.3 million isn’t much money, about $1.31 per customer per month.
As a lawyer for Missouri’s state’s largest electric company memorably put it last week, that “amounts to the change most people have on their dresser at home, or carry in their pockets.”
AmerenUE wants that change — and a lot more besides.
The company has asked utility regulators for a temporary $37.3 million rate hike. Think of it as a down payment, just enough to tide the company over until the state Public Service Commission decides whether to grant one more than 10 times higher — a $402 million rate hike the company asked for in July. The July request came just months after the PSC gave AmerenUE a $163 million rate hike in April.
AmerenUE’s spare change request comes under a special emergency clause designed to allow the state to prop up financially distressed utility companies.
Other Missouri electric companies are watching closely to see how that request fares. If AmerenUE succeeds, it’s a good bet they’ll ask for temporary rate hikes, too.Strictly speaking, AmerenUE isn’t financially distressed. Profits at its parent company were up 11 percent during the third quarter compared to the same period in 2008.
But AmerenUE is pleading distress because it has been unable to earn its “authorized rate of return.” That’s the maximum profit level allowed by utility regulators when they set rates.
Utility companies are monopolies, not subject to market pressures that encourage other companies to operate efficiently.
AmerenUE says that its failure to earn the maximum authorized rate of return makes borrowing for needed capital improvements more difficult and expensive. That increases costs for consumers.
Setting a maximum profit level provides an incentive for utilities to be efficient and well-run. If they are, they earn the authorized rate of return. If not, they don’t.
But allowing higher rates because a company didn’t earn as much as it could have might be said to reward inefficiency and poor management.Even if AmerenUE gets the temporary rate increase, company executives testified this week that they may ask state lawmakers for rules changes that would increase their bottom line.
Among them is placing a time limit on rate cases. That would make it more difficult for PSC staff and Public Counsel Lewis R. Mills, who represents electric customers, to analyze and respond to future utility rate hike requests.
The company may also renew its battle to overturn an important consumer protection called Construction Work In Progress, or CWIP.
That law, which was overwhelmingly approved by Missouri voters in 1976, prevents utilities from charging customers for new power plants until they begin generating electricity. It’s designed to encourage efficient construction practices by spreading risk between consumers and utilities.It’s ironic that AmerenUE should be complaining about its financial troubles. Its parent company’s then-three top executives got hefty bonuses in February based in part on the company’s performance.
Those Ameren Corp. executives — Gary Rainwater, Warner Baxter and Thomas Voss — received incentive payments of $771,656, $302,610 and $240,255, respectively. The payments are equal to 82 percent, 55 percent and 50 percent of their respective base salaries.
A company that can afford to hand out bonuses like that shouldn’t need to scrounge for spare change. Most of its customers aren’t doing nearly as well as AmerenUE.
Brother, we can’t spare the dimes. 

The Tribune’s View

Payday loans

Time for control?

By Henry J. Waters IIIThursday, November 19, 2009Rep. John Burnett of Kansas City has tried to rein in the activities of the payday loan industry in Missouri every year since he joined the Missouri General Assembly in 2002. Now he is joined in the crusade by our own Mary Still. The Democrats believe it’s time to reform Missouri law, which is almost alone in its laxity among all states in the union. Last year Still introduced a law, but House Speaker Ron Richard failed to schedule a hearing until an impossibly late minute, reflecting the general legislative disinterest in the issue. Taking it to the people, the two staged a hearing Monday here in Columbia.Still and Burnett swim against a strong libertarian current favoring a laissez faire approach. However, libertarianism, a blessed concept, has limits that have been broached in some practices allowed for payday loan entrepreneurs.The worst excess seems to be churning, in which companies are allowed to re-energize short-term loans repeatedly, which can produce annual interest rates of nearly 2,000 percent. Reformers believe these borrowers are vulnerable and deserve protection, as almost all other states have done. They want to set limits on how much lenders can charge and limit how often loans can be cycled. According to the state Department of Finance, in the year ending Sept. 30, 2008, in Missouri the average annual interest rate charged by these companies was 430.58 percent. On average, loans were recycled 1.7 times. None of the eight surrounding states allows any renewals at all, and all have much more stringent limits on the amount of interest that can be charged. The result is many more payday loan licenses in Missouri and many more complaints received by Missouri regulators than in other states.Still and Burnett take heart from a federal law sponsored by former U.S. Rep. Jim Talent limiting payday interest rates for military families to 36 percent a year and forbidding renewal rollovers altogether. Missouri law allows as many as six rollovers. Interest rate limits in surrounding states are not as strict as the federal rule but much more so than Missouri’s.The payday loan industry maintains a strong defensive line, so far impenetrable. Randy Scherr, representing Missouri payday companies, said at the hearing that customer surveys show the vast majority of clients understand the terms of their loans and are satisfied with the service, which meets short-term emergency needs not met by other financial institutions. He said publicly traded payday companies only earn about 6.6 percent on income, half that earned by International House of Pancakes. Scherr asked why, if payday lending is as wildly profitable as critics say, major banks aren’t in the business.Critics often cite moral issues, as if payday borrowers are inevitably hapless souls trapped and extorted by lenders. They liken needed reforms to usury laws, a good analogy. Usury laws are warranted, but only within limits. In a perfect free-market setting, one would leave borrowers and lenders alone to make and execute their deals.But when sellers have extraordinary advantage and buyers aren’t adequately equipped to fairly negotiate, rules are needed. Rules in Missouri concerning the payday loan industry are almost unique, at the fringe of the regulatory spectrum. The legislation to be introduced by Still and Burnett in the coming session deserves a full hearing, debate and passage in a form similar to laws in every other state in our neighborhood.HJW III

Consumers Council’s John Coffman will be attending the Financial Services Conference  presented by the Consumer Federation of America on Decemer 3 and 4.

Federal and state policy makers and regulators continue to address pressing banking, insurance, investment, and real estate issues affecting consumers, after more than two decades of financial services deregulation and reregulation. To keep consumer advocates and educators informed about these issues, the Consumer Federation of America is presenting an annual conference on financial services, planned with the assistance of consumer groups and the financial services industry.

 John will return to Missouri armed with information to help local consumers so watch for follow up information on this website.