FTC Blog Outlines Factors for Companies to Consider About AI — AI: The Washington Report
The FTC staff recently published a blog post outlining four factors for companies to consider when developing or deploying AI products to avoid running afoul of the nation’s consumer protection laws.
The blog post does not represent formal guidance but it likely articulates the FTC’s thinking and enforcement approach, particularly regarding deceptive claims about AI tools and due diligence when using AI-powered systems.
Although the blog post comes just days before current Republican Commissioner Andrew Ferguson becomes FTC Chair on January 20, the FTC is likely to continue the same focus on AI as it relates to consumer protection issues as it has under Chair Khan. Ferguson has voted in support of nearly all of the FTC’s AI consumer protection actions, but his one dissent underscores how he might dial back some of the current FTC’s aggressive AI consumer protection agenda.
The FTC staff in the Office of Technology and the Division of Advertising Practices in the FTC Bureau of Consumer Protection released a blog outlining four factors that companies should consider when developing or deploying an AI-based product. These factors are not binding, but they underscore the FTC’s continued focus on enforcing the nation’s consumer protection laws as they relate to AI.
The blog comes just under two weeks before current Republican Commissioner Andrew Ferguson will become the FTC Chair. However, under Ferguson, as we discuss below, the FTC will likely continue its same focus on AI consumer protection issues, though it may take a more modest approach.
The Four Factors for Companies to Consider about AI
The blog post outlines four factors for companies to consider when developing or deploying AI:
Doing due diligence to prevent harm before and while developing or deploying an AI service or product
In 2024, the FTC filed a complaint against a leading retail pharmacy alleging that it “failed to take reasonable measures to prevent harm to consumers in its use of facial recognition technology (FRT) that falsely tagged consumers in its stores, particularly women and people of color, as shoplifters.” The FTC has “highlighted that companies offering AI models need to assess and mitigate potential downstream harm before and during deployment of their tools, which includes addressing the use and impact of the technologies that are used to make decisions about consumers.”
Taking preventative steps to detect and remove AI-generated deepfakes and fake images, including child sexual abuse material and non-consensual intimate imagery
In April 2024, the FTC finalized its impersonation rule, and the FTC also launched a Voice Cloning Challenge to create ways to protect consumers from voice cloning software. The FTC has previously discussed deepfakes and their harms to Congress in its Combatting Online Harms Report.
Avoiding deceptive claims about AI systems or services that result in people losing money or harm users
The FTC’s Operation AI Comply, which we covered, as well as other enforcement actions have taken aim at companies that have made false or deceptive claims about the capabilities of their AI products or services. Many of the FTC’s enforcement actions have targeted companies that have falsely claimed that their AI products or services would help people make money or start a business.
Protecting privacy and safety
AI models, especially generative AI ones, run on large amounts of data, some of which may be highly sensitive. “The Commission has a long record of providing guidance to businesses about ensuring data security and protecting privacy,” as well as taking action against companies that have failed to do so.
While the four factors highlight consumer protection issues that the FTC has focused on, FTC staff cautions that the four factors are “not a comprehensive overview of what companies should be considering when they design, build, test, and deploy their own products.”
New FTC Chair: New or Same Focus on AI Consumer Protection Issues?
The blog post comes under two weeks before President-elect Trump’s pick to lead the FTC, current FTC Commissioner Andrew Ferguson, becomes the FTC Chair. Under Chair Ferguson, the FTC’s focus on the consumer protection side of AI is unlikely to undergo significant changes; Ferguson has voted in support of nearly all of the FTC’s consumer protection AI enforcement actions.
However, Ferguson’s one dissent in a consumer protection case brought against an AI company illuminates how the FTC under his leadership could take a more modest approach to consumer protection issues related to AI. In his dissent, Commissioner Ferguson wrote:
The Commission’s theory is that Section 5 prohibits products and services that could be used to facilitate deception or unfairness because such products and services are the means and instrumentalities of deception and unfairness. Treating as categorically illegal a generative AI tool merely because of the possibility that someone might use it for fraud is inconsistent with our precedents … and risks strangling a potentially revolutionary technology in its cradle.
Commissioner Ferguson’s point seems well taken.Less clear is where he would draw the line.Moreover, as a practical matter, his ability to move the needle would likely need to wait until President Trump’s other nominee, Mark Meador, is confirmed, as expected, later this year.
Matthew Tikhonovsky also contributed to this article.
CFPB Updates No-Action Letter and Compliance Assistance Sandbox Policies to Spur Innovation
On January 3, 2025, the CFPB announced a reboot of its no-action letter and compliance assistance sandbox policy, aimed at promoting consumer-beneficial innovation in financial services. The new policies are designed to foster competition and transparency while addressing unmet consumer needs.
The CFPB originally rescinded the policies in 2022, citing a failure to meet transparency standards and promote consumer-beneficial innovation. The updated framework aims to address these shortcomings with several key changes, including:
Unmet Consumer Needs. Applicants must clearly identify a specific consumer problem their product or service addresses, providing data and detailed explanations to justify the innovation’s necessity and benefits.
Market Competition. To avoid granting regulatory advantages to an individual company, the CFPB will solicit applications from competitors offering similar products or services, ensuring a level playing field within the market. The Bureau does not want any company to have a first-mover advantage; but with its policy, the CFPB is essentially signaling to your competitors what you intend to do.
Eligibility Criteria. The CFPB will not consider applications that have been the subject of an enforcement action involving violations of federal consumer financial law in the past five years, or who are the subject of a pending state or federal enforcement action. This restriction applies even if the enforcement action was in a product vertical wholly unrelated to the one being considered for the no-action letter.
Former CFPB Employees Face Bureau “Non-Compete.” The Bureau has stated it will not consider applications from companies that are represented by former CFPB attorneys as outside counsel, even if those lawyers worked at the Bureau more than ten years ago, to avoid any perceived “ethical conflict.”
Finally, recipients of sandbox approvals or no-action letters are prohibited from using these designations in promotional materials to avoid misleading consumers into believing the CFPB endorses their offerings.
Putting It Into Practice: With less than a week to go before a change in administration, the Bureau has decided to reboot its regulatory sandbox policy. However, given the overbearing requirements and restrictions on applying for a no-action letter under the Bureau’s new innovation policies, it will be interesting to see how many companies decide to apply, or if the policies will soon be rescinded.
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CFPB Alleges Credit Reporting Agency Conducted Sham Investigations of Errors
On January 7, 2025, the CFPB filed a lawsuit against a nationwide consumer reporting agency for violations of the Fair Credit Reporting Act. The lawsuit claims the company’s investigation of consumer disputes was inadequate, specifically criticizing their intake, processing, investigation, and customer notification processes. The lawsuit also alleges the company reinserted inaccurate information on credit reports, which the agency alleges harmed consumers’ access to credit, employment, and housing. In addition to FCRA, the Bureau alleges that the company’s faulty intake procedures and unlawful processes regarding consumer reports violated the Consumer Financial Protection Act’s (CFPA) prohibition on unfair acts or practices.
Specifically, the Bureau alleges the company:
Conducted sham investigations. The CFPB claims the company uses faulty intake procedures when handling consumer disputes, including not accurately conveying all relevant information about the disputes to the original furnisher. The company also allegedly routinely accepted furnisher responses to the disputes without an appropriate review such as when furnisher responses seemed improbable, illogical, or when the company has information that the furnisher was unreliable. The Bureau also alleged the company failed to provide consumers with investigation results and provided them ambiguous, incorrect, or internally inconsistent information.
Improperly reinserted inaccurate information on consumer reports. The CFPB alleged the company failed to use adequate matching tools, leading to reinsertion of previously deleted inaccurate information on consumer reports. Consumers who disputed the accuracy of an account and thought their consumer report had been corrected instead saw the same inaccurate information reappear on their consumer report without explanation under the name of a new furnisher.
Putting It Into Practice: This lawsuit reflects a broader trend of the CFPB’s increased regulatory scrutiny of FCRA compliance. (previously discussed here, here, and here). The CFPB has demonstrated a focus on ensuring the accuracy and integrity of consumer credit information. Consumer reporting agencies should proactively review their policies and procedures related to dispute investigation, data handling, and furnisher interaction to ensure they are in compliance with all aspects of the FCRA.
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CFPB Sues Mortgage Lender for Predatory Lending Practices in Manufacture Homes Loans
On January 6, 2025, the CFPB filed a lawsuit against a non-bank manufactured home financing company for violations of the Truth in Lending Act and Regulation Z. The lawsuit alleges that the mortgage lender engaged in predatory lending practices by providing manufactured home loans to borrowers it knew could not afford them.
According to the CFPB, the mortgage lender allegedly ignored “clear and obvious red flags” indicating the borrowers’ inability to afford the loans. This resulted in many families struggling to make payments, afford basic necessities, and facing fees, penalties, and even foreclosure. The Bureau alleges the lender failed to make reasonable, good-faith determinations of borrower’s ability to repay, as required by the Truth in Lending Act (TILA) and Regulation Z.
The CFPB’s lawsuit specifically claims that the lender:
Manipulated lending standards. The mortgage lender disregarded clear and obvious evidence that borrowers lacked sufficient income or assets to meet their mortgage obligations and basic living expenses. On some occasions, borrowers who were already struggling financially were approved for loans, worsening their financial situation.
Fabricated unrealistic estimates of living expenses. The company justified its determination that borrowers could afford loans by using artificially low estimates of living expenses. The estimated living expenses were about half of the average of self-reported living expenses for other, similar loan applicants.
Made loans to borrowers projected to be unable to pay. The lender approved loans despite the company’s own internal estimates indicating the borrower’s inability to pay.
Putting It Into Practice: As Chopra’s term wraps out, the Bureau is on a frantic mission to file as many lawsuits as it can for its ongoing enforcement matters. How that will impact the incoming administration remains to be seen. But it seems likely that a new CFPB Director will take a hard look at much of the active litigation and re-evaluate the Bureau’s position.
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DOJ Announces Third Settlement with a Non-Depository Lender to Resolve Alleged Redlining Claims
On January 7, 2025, the United States Department of Justice (the “DOJ”) announced that a non-depository mortgage lender has agreed to pay $1.75 million in connection with allegations that it engaged in a pattern or practice of lending discrimination by redlining predominantly Black and Hispanic neighborhoods.
The DOJ filed its underlying complaint in the Southern District of Florida alleging that the lender violated the Fair Housing Act and Equal Credit Opportunity Act by failing to equitably provide access to mortgage lending services to majority-Black and Hispanic neighborhoods and high-Black and Hispanic neighborhoods in the Miami-Fort Lauderdale-West Palm Beach, Florida, Metropolitan Statistical Area (“Miami MSA”). According to the DOJ, the lender set up offices in predominantly white neighborhoods and made insufficient efforts to market their services or develop their network in Black or Hispanic neighborhoods, which resulted in the company generating mortgage loan applications within such neighborhoods at rates far below peer institutions.
The DOJ’s proposed consent order, if entered by the court, will require the lender to take certain measures to rectify its practices, including:
Community Credit Needs Assessment. Conducting an assessment to identify the credit needs of residents in predominantly Black and Hispanic neighborhoods, using the results to develop future loan programs and marketing campaigns.
Loan Subsidy Program. Providing $1.75 million for a loan subsidy program offering affordable home purchase, refinance, and home improvement loans in predominantly Black and Hispanic neighborhoods in the Miami MSA.
Fair Lending Program Assessment. Conducting a detailed assessment of its fair lending program, focusing on fair lending obligations to predominantly Black and Hispanic neighborhoods in the Miami MSA.
Enhanced Training and Staffing. Enhancing fair lending training and staffing, including maintaining a Director of Community Lending.
Outreach and Advertising Expansion. Maintaining an office location in a majority-Black and Hispanic neighborhood in Miami-Dade County, translating its website into Spanish, and requiring loan officers to engage in marketing to these neighborhoods.
Community Engagement. Providing four outreach events and six financial education seminars per year, partnering with community organizations to increase credit access in predominantly Black and Hispanic neighborhoods in the Miami MSA.
Putting it into Practice: This settlement follows a series of other recent redlining settlements by the CFPB and DOJ (previously discussed here, here, and here). It is also the third involving a non-depository institution. With the upcoming change in administration this month, regulators may remain eager to pursue settlements of pending fair lending investigations.
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TSCA Fee Payments for Manufacturers of Five High-Priority Substances
Companies that manufacture any of five chemicals are facing substantial fee payments under the Toxic Substances Control Act. The U.S. Environmental Protection Agency (EPA) has published preliminary lists of manufacturers that it plans to hold financially responsible for risk evaluations of five high-priority substances under TSCA section 6(b). The Agency published a notice announcing the availability of the preliminary lists of proposed manufacturers on December 31, 2024 at 89 Fed. Reg. 107099. The five high-priority substances for which risk evaluation fees will be assessed are acetaldehyde, acrylonitrile, benzenamine, vinyl chloride, and 4,4′-methylene bis(2-chloroaniline) (MBOCA). The preliminary lists themselves appear in the docket. Manufacturers of those chemicals whose names do not appear on the relevant preliminary list must notify EPA by March 3, 2025.
Background
EPA recently designated those five chemical substances as high priority, meaning that they are at the top of EPA’s priority list for section 6(b) risk evaluations. 89 Fed. Reg. 102900 (Dec. 18, 2024). Under TSCA section 26(b), EPA has the authority to offset costs associated with conducting risk evaluations under section 6(b), as well as certain other provisions of TSCA. Section 6(b)directs EPA to initiate risk evaluations for chemical substances to determine whether they present an unreasonable risk to health or the environment under their conditions of use.
Pursuant to the TSCA Fees Rule, codified at 40 C.F.R. Part 700, Subpart C, EPA will collect payment from companies that manufactured (including import) a chemical substance that is the subject of a risk evaluation under TSCA section 6(b) during the previous five years.
The fee totals $4,287,000, which is to be shared among all identified manufacturers. The amount each entity pays will depend on the total number of entities identified, their production volumes, and the number of small businesses identified, which receive an 80% discount on their share of the fee. 40 CFR § 700.45(c).
Next Steps for Manufacturers
To compile the list of manufacturers subject to fees, EPA relies on information already at its disposal from the past five years, including submissions pursuant to TSCA sections 5(a) (Significant New Use Notice), 8(a) (Chemical Data Reporting), 8(b) (TSCA Inventory), and the Toxics Release Inventory, as well as relevant information submitted to other agencies.40 C.F.R. § 700.45(b)(2).
However, entities that have manufactured (including imported) the five chemical substances in the previous five years whose names do not appear on the preliminary lists have a duty to self-identify and “must submit notice to EPA, irrespective of whether they are included in the preliminary list.” 40 C.F.R. § 700.45(b)(5) (emphasis added). Notifications are due by March 3, 2025.
Within this window, entities must provide the following information electronically via the Central Data Exchange (CDX), EPA’s electronic reporting portal, using the Chemical Information Submission System (CISS) reporting tool, as applicable:
Contact information: Includes name and address of submitting company and other basic contact information.
Certification of cessation: This applies to entities (whether named in the Preliminary List or not) that have manufactured any of the chemical substances in the five year period preceding publication of the preliminary lists (but have ceased manufacture prior to the certification cutoff date).
Certification of no manufacture: This applies to entities named in a preliminary list that have not manufactured the chemical in the five year period preceding publication of the preliminary lists. It exempts those entities from fee obligations.
Certification of meeting exemption: This applies to entities named in a preliminary list that meets one or more of the exemptions discussed below. A certification statement attesting the applicability of the exemption must be submitted and will exempt those entities from fee obligations.
Production volume: Entities that are not exempt, and do not otherwise qualify for certifications of cessation or manufacture, must submit their production volume for the applicable chemical substance for the three calendar years prior to publication of the preliminary list – 2023, 2022, and 2021. Manufacturers should report volumes to two significant figures. Companies with multiple facilities producing the same chemical substance should include the total aggregated production volume from all facilities when calculating the average production volume.
Exemptions Available
Manufacturers are exempted from fee payment requirements if they meet one or more of the following criteria under 40 C.F.R. § 700.45(a)(3)(i) through (v) on or after the certification cutoff date, December 18, 2023, as follows:
Import articles containing that chemical substance;
Produce that chemical substance as a byproduct that is not later used for commercial purposes or distributed for commercial use;
Manufacture that chemical substance as an impurity;
Manufacture that chemical substance as a non-isolated intermediate; or
Manufacture small quantities of that chemical substance solely for research and development.
Manufacturers are also exempted if they meet the following criteria for the five years prior to and following publication of the preliminary lists:
Manufacture that chemical substance in quantities below a 2,500 lbs. annual production volume, unless all manufacturers of that chemical substance manufacture that chemical in quantities below a 2,500 lbs. annual production volume, in which case this exemption is not applicable.
The manufacturer must meet one or more of the listed exemptions in the successive five years and refrain from conducting manufacturing (including import) outside of those exemptions in the successive five years to qualify.
Next Steps
Companies should review the preliminary lists and, if not listed, evaluate whether self-identification, a certification, or an exemption is warranted well before the March 3, 2025 deadline and notify EPA accordingly.
After the close of the comment period, and once EPA has considered information received, EPA will publish final lists of manufacturers (including importers) subject to the TSCA Fees Rule.
Trending in Telehealth: December 18, 2024 – January 6, 2025
Trending in Telehealth highlights state legislative and regulatory developments that impact the healthcare providers, telehealth and digital health companies, pharmacists, and technology companies that deliver and facilitate the delivery of virtual care.
Trending in the past weeks:
Reimbursement parity
Provider telehealth education
A CLOSER LOOK
Proposed Legislation & Rulemaking:
In Ohio, Senate Bill 95 passed both the House and Senate chambers. This bill will allow for remote pharmacy dispensing, as current state law prohibits the dispensing of a dangerous drug by a pharmacist through telehealth or virtual means.
In Oregon, the Oregon Health Authority, Health Systems Division: Medical Assistance Programs proposed rule amendments to clarify the telehealth rule definitions, including adding cross-references to established definitions in OAR 410-120-0000.
In New York, the Department of Public Health (DPH) proposed two new amendments to the Medicaid State Plan for non-institutional services:
To comply with the 2024-2025 enacted budget, DPH proposed a clarification to the March 27, 2024, notice provision regarding provider rates for early intervention services. This clarification includes a decrease to provider rates for early intervention services delivered via telehealth, with rate decreases as high as 20% in some regions.
DPH also proposed to reimburse Federally Qualified Health Centers and Rural Health Clinics a separate payment in lieu of the prospective payment system rate for non-visit services, such as eConsults and remote patient monitoring.
Finalized Legislation & Rulemaking Activity:
In Illinois, an amendment to the Illinois Public Aid Code went into effect on January 1, 2025. Passed in June of 2024, Senate Bill 3268 provides that the Department of Human Services will pay negotiated, agreed-upon administrative fees associated with implementing telehealth services for persons with intellectual and developmental disabilities receiving Community Integrated Living Arrangement residential services.
Also in Illinois, an amendment to the Illinois Physical Therapy Act went into effect January 1, 2025. Passed in August of 2024, House Bill 5087 significantly limits the ability of physical therapists to provide telehealth services to patients in the state. For more information on the effects of this bill, please read our article discussing its implications.
In Kentucky, Senate Bill 111 went into effect January 1, 2025. This bill requires health benefit plans, limited health service benefit plans, Medicaid and state health plans to provide coverage for speech therapy provided via telehealth.
Missouri’s emergency rule amendments for virtual visit coverage under the Missouri Consolidated Health Care Plan took effect as of January 1, 2025. For more information on this bill, please see our related article from last month.
In New Jersey, Assembly Bill 3853 was signed into law by the governor. The legislation extends certain pay parity regarding telemedicine and telehealth until July 1, 2026, meaning that New Jersey health plans shall reimburse telehealth and telemedicine services at the same rate as in-person services.
In New York, Assembly Bill 6799, was signed into law by the governor. The legislation establishes a drug-induced movement disorder screening education program and specifically includes services provided via telehealth.
In Vermont, House Bill 861 went into effect January 1, 2025. This bill requires health insurers to reimburse telemedicine and audio-only telephone services the same as in-person visits. However, there is an exception for value-based contracts for services delivered by audio-only telephone.
Why it matters:
States are taking action to ensure reimbursement parity for telehealth services. While there is still debate surrounding reimbursement parity for telehealth services (e., mandating reimbursement at the same rate as equivalent in-person services), several states are making strides toward ensuring equal reimbursement rates for both in-person and telehealth services. Bills requiring reimbursement parity in Illinois, Kentucky, and Vermont have taken effect in 2025. Additionally, New Jersey’s decision to extend the reimbursement parity mandate for telemedicine and telehealth services until mid-2026 illustrates the push towards reimbursing healthcare services at the same rate, regardless of the delivery medium.
States are taking measures to not only recognize telehealth, but also to educate providers on telehealth as an effective care delivery method. New York’s decision to include healthcare provider educational materials for providing telehealth services for drug-induced movement disorders underscores the growing trend and importance of educating providers on the appropriate manner for providing such treatment services.
CFPB Finalizes Rule Removing Medical Bills from Credit Reports
On January 7, 2025, the CFPB announced the finalization of a rule amending Regulation V, which implements the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., to prohibit the inclusion of medical bills on credit reports used by lenders and prevent lenders from using medical information in lending decisions. According to the Bureau, the final rule (previously discussed here) will remove an estimated $49 billion in medical bills from the credit reports of about 15 million Americans.
The Bureau noted that medical debts are not effective predictors of whether a borrower will repay a debt. Consumers frequently report that they receive inaccurate bills or are asked to pay bills that should have been covered by insurance. The CFPB estimates that this rule will result in the approval of approximately 22,000 additional mortgages each year and increase credit scores for those with medical debt by an average of 20 points.
This rule follows changes by three nationwide credit reporting companies and two major credit scoring companies to reduce the impact of medical debt on credit reports and scores. Specifically, the final rule will:
Prohibit lenders from considering medical information. The rule will amend Regulation V and prohibit creditors from using certain medical information and data when making lending decisions, including information about medical devices that could be used as collateral for a loan.
Ban medical bills on credit reports. The rule prohibits consumer reporting agencies from including medical debt information on credit reports and credit scores sent to lenders. The Bureau seeks to prevent debt collectors from using the credit reporting system to pressure consumers to pay medical bills, regardless of their accuracy.
The rule is effective 60 days after publication in the Federal Register.
Putting It Into Practice: The final rule is another example of the CFPB’s increased focus on regulating the credit reporting industry. (previously discussed here). However, immediately after the Bureau finalized the rule, it was hit with two separate lawsuits by trade associations challenging the rule.
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EPA Further Extends Review Period for CBI Claims for the Identity of Chemicals on the TSCA Inventory
On January 6, 2025, the U.S. Environmental Protection Agency (EPA) announced the extension of the review period for confidential business information (CBI) claims for specific identities of all active chemical substances listed on the confidential portion of the Toxic Substances Control Act (TSCA) Inventory submitted to EPA under TSCA. 90 Fed. Reg. 645. As reported in our February 7, 2024, blog item, EPA previously extended the review period by one year, to February 19, 2025. According to EPA, several issues and factors caused delays that prevented EPA from completing its review within the five-year period and are going to prevent completion within the previous one-year extension. These issues include “a large universe of claims to review (more than 4,805 chemical substances in 5,787 often-complex submissions) and concurrent activities to update the public portion of the TSCA Inventory,” consistent with the requirements of TSCA Sections 8(b) and 14. EPA notes that adapting and maintaining its information technology (IT) systems to complete these reviews “has continued to contribute to delays in reviewing these CBI claims.” EPA states that the very large file size and other features of certain submissions caused IT difficulties that halted the CBI review process for about nine months while available resources were prioritized to address more critical IT needs. A lack of requested appropriated funds in fiscal years 2024 and 2025 resulted in insufficient contract resources to address IT system issues in addition to not allowing EPA to maintain the necessary staffing to make progress on these reviews. EPA was delayed in commencing Review Plan reviews for approximately six months to a year as a result of the decision of the U.S. Court of Appeals for the District of Columbia Circuit in Environmental Defense Fund v. EPA, 922 F.3d 446 (D.C. Cir. 2019), which resulted in a need for additional rulemaking activity to add a reporting requirement. According to EPA, the additional reporting requirement “created confusion among some reporting entities, further slowing the review process.” The review period is now extended to February 19, 2026.
Beltway Buzz, January 10, 2025
Welcome to the 119th Congress. Even before President-elect Donald Trump is sworn in on January 20, 2025, change has come to Washington, D.C., as the 119th Congress gaveled in late last week. Here is what the Buzz is watching as the new Congress kicks off:
A Trifecta? Yes, but … Republicans control the White House, as well as the U.S. Senate and U.S. House of Representatives, but that doesn’t mean that getting legislation to President-elect Trump’s desk is going to be easy. In the Senate, Republicans hold a 53–47 majority, with Vice President-elect J.D. Vance as the potential tiebreaking vote. This is seven votes short of a filibuster-proof majority, meaning that most partisan bills will have a hard time getting through the Senate. Moreover, in the House, Republicans hold a 219–215 majority. This razor-thin majority will get even thinner, as President-elect Trump has promised to nominate Representative Elise Stefanik (R-NY) as ambassador to the United Nations and Representative Mike Waltz (R-FL) as national security adviser. Depending on the timing of confirmations and special elections, this could mean that Republicans won’t be able to lose a single vote on any bill.
Get Ready for Reconciliation. Because Republicans are unlikely to sway at least seven Democrats to join them in voting for most bills, they will likely turn to the arcane budgetary process called reconciliation to advance their policy priorities. Ostensibly reserved for budgetary matters, the reconciliation process has the advantage of only needing a majority vote in the U.S. Senate. The drawback of the process is that because it is a budgetary tool, issues contained in such a bill must be fiscally related. Over recent years both Democrats (Affordable Care Act, American Rescue Plan Act, the Inflation Reduction Act) and Republicans (Tax Cuts and Jobs Act) have used the process to secure legislative victories. So, while this process could be used by Republicans to score wins on certain policy positions (e.g., tax cuts), they will not be able to use reconciliation to pass every legislative priority.
“Must-Pass” Legislation. As always, there are annual legislative exercises that must be addressed by Congress. Funding the federal government beyond the current March 14, 2025, deadline and lifting or suspending the debt limit will be major issues that Congress will have to address in the coming weeks and months. This could take time and attention away from other matters, such as the confirmation of political nominees.
Nominations. Speaking of nominations, the Buzz will be watching the confirmation process for putative secretary of labor nominee Lori Chavez-DeRemer. We will also be monitoring vacancies at the National Labor Relations Board and U.S. Equal Employment Opportunity Commission (as well as potential vacancies in the general counsel’s office at each of these agencies). The early rounds of confirmation hearings are usually reserved for high-profile cabinet-level positions such as secretary of state, secretary of the treasury, and attorney general.
Other Legislation. The Buzz will be watching for the reintroduction of the Dismantle DEI Act. The bill is unlikely to pass the Senate, but it could be the subject of congressional hearings.
Ports Strike Averted. This week, the International Longshoremen’s Association (ILA) and the group representing shippers and employers at East Coast and Gulf Coast ports announced a tentative agreement on a new six-year collective bargaining agreement, avoiding a potential strike. Buzz readers may recall that the parties have been negotiating over the introduction of automation technology at the ports. According to a joint statement released by the parties, the “agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coast ports—making them safer and more efficient, and creating the capacity they need to keep our supply chains strong.” ILA members must still vote to ratify the contract.
Fed Contracting Agency Withdraws Salary History and Transparency Rule. On January 8, 2025, the Federal Acquisition Regulatory Council (FAR Council) withdrew its January 30, 2024, proposed rule that would have prohibited federal contractors from considering an applicant or employee’s salary history when making compensation decisions. The proposal also would have required federal contractors to disclose compensation information in advertisements for job openings in connection with a federal contract. The FAR Council stated that “[i]n light of the limited time remaining in the current Administration,” it had “decided to withdraw the proposed policy and rule and focus [its] attention on other priorities, including directives in recent National Defense Authorization Acts.”
OSHA Heat Docket Wraps Up. January 14, 2025, is the deadline for stakeholders to submit comments in response to the Occupational Safety and Health Administration’s proposed heat standard. The incoming Trump administration is unlikely to move forward with the proposal, at least as currently written.
A Commanding Act. During his four years in office, President Biden, the commander in chief, signed into law the American Rescue Plan Act, the Inflation Reduction Act, and the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022, among others. But for residents of Washington, D.C., President Biden’s most enduring legislative victory is probably the D.C. Robert F. Kennedy Memorial Stadium Campus Revitalization Act. The statute instructs the secretary of the interior to transfer “administrative jurisdiction over the Robert F. Kennedy Memorial Stadium Campus” to the District of Columbia for, among other purposes, “[s]tadium purposes, including training facilities, offices, and other structures necessary to support a stadium.” The act likely paves the way for the construction of a stadium in Washington, D.C., that will hold professional football games.
Building a Smarter Long-Term Care System in New York
New York State has a long-standing commitment to supporting its most vulnerable populations through Medicaid-funded services for older adults and those requiring long-term care. However, rising costs and an increasingly complex healthcare landscape have created challenges that demand innovative solutions. As New York seeks to align its healthcare system with evolving needs, the time has come to adopt integrated care models that promote sustainability, efficiency, and improved outcomes.
The Program of All-Inclusive Care for the Elderly (PACE) offers a clear path forward. This model has consistently demonstrated its ability to reduce healthcare costs while enhancing patient outcomes by integrating medical, social, and behavioral health services under one umbrella. PACE allows older adults to age in place by expanding access to home- and community-based services (HCBS). These services empower individuals to remain in their homes rather than institutional settings, which not only aligns with patient preferences but also reduces system-wide costs. Despite these clear benefits, New York has not approved a new PACE program since 2011, leaving this proven model underutilized in the state.
Integrated care models like PACE deliver significant advantages. By addressing social determinants of health—such as transportation, housing, and nutrition—these programs take a whole-person approach that improves both health outcomes and quality of life. At the same time, they streamline administrative processes, reducing bureaucracy for patients and providers alike. Nationally, PACE has shown remarkable success in reducing duplicative services, unnecessary hospitalizations, and other inefficiencies that drive up costs in fragmented care systems.
As the state considers reforms, it should prioritize integrated care models that promote collaboration, simplify care delivery, and align incentives across payers and providers. This could include a phased approach to transition eligible individuals from partial capitation and fee-for-service models to fully integrated plans, such as PACE or Medicare Advantage Plus (MAP). By setting clear benchmarks for integration and incentivizing innovation, the state can create a roadmap for meaningful progress.
To fully realize the potential of integrated care, New York must also address existing barriers to expanding PACE programs. Simplifying the regulatory framework and providing financial incentives for organizations willing to invest in PACE would go a long way toward increasing access, especially in underserved areas. Additionally, collaboration between managed long-term care plans and PACE could enhance the continuum of care for patients, ensuring they benefit from the strengths of both models. Nonprofit and community-based organizations, which have a history of delivering high-quality, cost-effective care, should also be given opportunities to expand their reach and impact.
Addressing misaligned incentives between Medicaid, which is state-funded, and Medicare, which is federally funded, remains a critical priority. Strengthening partnerships between state and federal entities will enable shared savings arrangements that reward innovative, high-performing care models. New York has an opportunity to lead the way in aligning these funding streams to support integrated care more effectively.
As Medicaid cost control becomes a pressing issue, piecemeal reforms that add complexity without meaningful benefits must be avoided. Instead, the state should take bold, decisive action to embrace integrated care models that deliver both financial sustainability and improved outcomes. By prioritizing proven programs like PACE, fostering collaboration among stakeholders, and removing barriers to innovation, New York can honor its commitment to aging populations and build a long-term care system that is both effective and enduring.
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Is the Rider or the Company Liable in a Bike Share Accident in Philadelphia?
Bike share programs have revolutionized the way people travel in cities across the country. With names like Indego in Philadelphia, these programs offer a convenient, eco-friendly alternative to other forms of public transportation. The bikes can be found at kiosks near major landmarks such as Penn Station, Rittenhouse Square, and Millennium Park, making them a practical choice for commuters, tourists, and residents alike.
But as bike share usage grows, so does the potential for accidents. And when accidents happen, the question of liability arises. Who is responsible — the rider or the bike share company?
Understanding who bears responsibility in a bike share accident is not always straightforward. Multiple factors come into play, requiring an analysis of rider responsibility, company obligations, and the circumstances that led to the accident.
What’s clear, however, is that victims of such accidents often face physical injuries, emotional challenges, and financial hardships. For these individuals, securing compensation through a personal injury claim isn’t just about the money — it’s about getting the resources they need to recover and move forward with their lives.
The Growing Popularity of Bike Share Programs
Over the past decade, bike share systems have become an integral part of urban transportation. Major cities like Philadelphia have embraced these programs to reduce traffic congestion, cut carbon emissions, and promote healthier lifestyles. Companies like Lyft and Lime operate many of these systems, and cities often partner with private entities to maintain and expand their programs.
The convenience of bike shares has made them incredibly popular, but the increase in usage has also brought to light safety concerns. Riders often find themselves navigating busy streets alongside cars, buses, and pedestrians. And while most bike share programs require riders to agree to terms and conditions before using the service, many people don’t understand the legal implications of those agreements until an accident happens.
Common Causes of Bike Share Accidents
Bike share accidents can happen for a variety of reasons, ranging from rider error to poor bike maintenance. Some of the most common causes include:
Rider Mistakes
Riders often take to the streets with the best intentions, but certain common errors can significantly increase the risk of accidents:
Failure to obey traffic laws: Riders are required to follow the same rules of the road as drivers. Running red lights, ignoring stop signs, or riding against traffic can lead to collisions.
Lack of experience: Many bike share users aren’t regular bicyclists and may lack the skills needed to safely navigate urban environments.
Distractions and negligence: Just like drivers, cyclists can become distracted by their phones, GPS, or surroundings, increasing the likelihood of an accident.
Bike Share Company Negligence
While riders rely on bike share programs for convenience and safety, lapses in company responsibilities can lead to preventable accidents:
Poor bike maintenance: Users expect bikes to be safe and in good condition, but improper maintenance can result in brake failures, tire blowouts, or other mechanical issues.
Faulty docking stations: Broken or poorly maintained docking stations can create hazards, especially in high-traffic areas.
Failure to provide adequate safety guidance: Some bike share companies don’t make it clear how to inspect a bike for issues or provide information on safe riding practices.
External Factors
Beyond rider actions and company obligations, outside conditions can also play a major role in causing bike share accidents:
Road hazards: Potholes, debris, or uneven pavement can cause accidents, particularly for inexperienced riders.
Collisions with motor vehicles: Sharing the road with cars and trucks poses a significant risk, especially when drivers fail to give riders the space they need.
Weather conditions: Rain, snow, or ice can make riding more treacherous, increasing the likelihood of slipping or loss of control.
Rider Responsibilities
When a customer rents a bike through a bike share program, they agree to a set of terms and conditions. These agreements often include clauses stating that the rider assumes responsibility for following traffic laws and riding safely. However, this doesn’t mean the rider is always at fault in the event of an accident.
For example, if a rider causes an accident by running a red light or weaving through traffic recklessly, they may be held liable for any injuries or property damage. However, if the accident was caused by a mechanical failure due to the company’s negligence, liability may shift away from the rider. It’s also worth noting that in some states, bicyclists have limited insurance coverage, leaving many riders to bear the financial burden of accidents.
Bike Share Company Obligations
Bike share companies have a duty to provide safe and functional equipment to their users. This includes regularly inspecting and maintaining their bikes, ensuring docking stations are operating properly, and addressing any safety concerns promptly. When they fail in these duties, accidents can happen.
Another consideration is the legal language in user agreements. Many bike share companies include disclaimers in their terms and conditions designed to limit their liability. While these disclaimers can make it harder to hold companies accountable, they are not always enforceable, especially if the company’s negligence can be proven.
Multi-Party Liability in Bike Share Accidents
Sometimes, liability isn’t limited to just the rider or the company. Other parties could also bear responsibility, depending on the circumstances of the accident. These parties might include:
Local governments: Poorly maintained roads or bike paths can create hazards for riders, putting some liability on local municipalities.
Motorists: Drivers who act negligently, such as failing to yield to a cyclist or driving under the influence, can be held accountable for bike share accidents.
Third-party manufacturers: If a bike fails due to a design defect or faulty part, the manufacturer may be responsible.
Each case is unique, and the specific facts of an accident will determine the parties involved in a liability claim.
Determining Liability in a Bike Share Accident
When it comes to personal injury claims, negligence serves as the foundation for determining liability. Negligence occurs when someone fails to act with the level of care that a reasonable person would exercise under similar circumstances, resulting in harm to another person. Understanding this concept is crucial in bike share accident cases, as proving negligence is often the key to securing fair compensation for injuries and damages.
To establish a successful bike share accident claim, victims must demonstrate four key elements of negligence:
Duty of Care: The first step in proving negligence is showing that the defendant owed the victim a duty of care. This means the responsible party was obligated to act in a reasonable manner to ensure the safety of others. For example, bike share companies have a duty to maintain their bicycles, while drivers must follow traffic laws to avoid endangering cyclists.
Breach of Duty: Next, it must be shown that the defendant breached their duty of care. This could involve a bike share company failing to properly maintain its fleet, leading to faulty brakes, or a motorist texting while driving and colliding with a cyclist. A breach occurs when someone’s actions—or inaction—fall below the level of reasonable care expected in that situation.
Causation: Once a breach of duty is established, the victim must prove that this breach directly caused their injuries. For instance, if a rider is injured because of a defective bike, they need to demonstrate that the bike’s malfunction—not some unrelated factor—directly led to the accident.
Damages: Finally, the victim must provide evidence of actual damages, whether physical, emotional, or financial. This includes medical bills, lost wages, pain and suffering, or even the cost of replacing damaged personal items.
Negligence, with its intricate components, is at the heart of bike share accident claims. Proving these four elements requires a careful gathering of evidence and a strategic approach to presenting the case. By successfully demonstrating negligence, victims increase their chances of obtaining the compensation they need to recover and move forward.
Steps to Take After a Bike Share Accident
If you’re involved in a bike share accident, knowing what to do immediately afterward can make a significant difference in protecting your rights and securing compensation. Here are some steps you should take:
Seek medical attention: Your health and safety should always be the top priority. Even if you feel fine, get checked out by a healthcare professional to rule out serious injuries.
Report the accident: Notify the bike share company and, if necessary, file a police report. This helps document the accident and establish an official record.
Gather evidence: Take photos of the accident scene, your injuries, and any damaged equipment. Collect contact information from witnesses and other parties involved.
Preserve the bike: If possible, see if you can keep the bike in its post-accident condition. This can be crucial in proving mechanical failure or company negligence.
Consult an attorney: Bicycle accidents can involve complex legal issues, and an experienced attorney can guide you through the process of determining liability and pursuing compensation.
Compensation for Bike Share Accident Victims
Seeking compensation is an essential step in helping victims rebuild their lives, not just by covering their expenses but by restoring their sense of stability and security. Here’s a closer look at the different types of compensation available.
Medical Expenses
The cost of medical care can be a significant burden after a bike share accident. Compensation for medical expenses typically covers everything from emergency treatments, such as ambulance rides and ER visits, to long-term care, like physical therapy or specialized rehabilitation. It may also include the costs of necessary medical equipment, prescription medications, and future treatments required to address ongoing health issues.
Lost Income
Bike share accidents can disrupt a victim’s ability to work, often resulting in the loss of wages. Compensation for lost income accounts for the time away from work during recovery. If the injuries have long-term effects that reduce the victim’s ability to earn, they may also seek damages for diminished earning capacity.
Pain and Suffering
The physical pain and emotional distress caused by a bike share accident often extend far beyond the initial impact. Victims may experience ongoing discomfort, limited mobility, and chronic pain, all of which take a significant toll on their quality of life. Emotional and psychological effects like anxiety, depression, and post-traumatic stress disorder (PTSD) are also common, especially after a particularly traumatic accident.
Property Damage
While personal safety is the top priority, accidents involving bike shares often lead to damaged personal property as well. Smartphones, laptops, clothing, or other items that were damaged or destroyed in the accident can create additional financial strain for victims.
Wrongful Death
The loss of a loved one in a bike share accident is a devastating experience, and no amount of compensation can truly replace their presence in your life. However, wrongful death claims can provide financial support to the families left behind. Wrongful death compensation often covers expenses such as funeral and burial costs, medical bills incurred prior to the victim’s passing, and the loss of future financial contributions from the deceased. Additionally, it can address the emotional toll by compensating for the loss of companionship, guidance, and emotional support that the family relied upon.
Although compensation might initially seem like just a financial transaction, its purpose goes much deeper. It’s not simply about the dollar amount awarded; it’s about giving victims the resources to put their lives back together.