Student loans, savings accounts, and goodbye to artificial red dye

Summary

Podcast Summary: The Indicator from Planet Money Episode Title: Student loans, savings accounts, and goodbye to artificial red dye
Host/Author: NPR
Release Date: January 17, 2025

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Introduction

In the January 17, 2025 episode of The Indicator from Planet Money, hosts Waylon Wong and Adrienne Ma delve into three significant economic and regulatory topics shaping the current landscape: the Consumer Financial Protection Bureau's (CFPB) lawsuit against Capital One, the Biden administration's student loan forgiveness efforts, and the FDA's recent ban on artificial red dye No. 3. The episode combines insightful analysis with engaging commentary, highlighted by amusing interludes featuring Planet Money's Kenny Malone.

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1. CFPB Sues Capital One Over Misrepresented Savings Accounts

Overview:
Waylon Wong introduces the first major topic by discussing the CFPB's lawsuit against Capital One, accusing the bank of misleading customers about the interest rates offered on its savings accounts. The CFPB alleges that Capital One deceived customers out of over $2 billion in interest earnings.

Key Points:

• Misrepresentation of Interest Rates: The CFPB claims that Capital One marketed its older 360Savings account as a high-yield option, despite it only offering 0.3% interest. In contrast, the newer 360 Performance Savings account provided a significantly higher rate of 4.35%.

  Waylon Wong (02:34): "This week the CFPB said it was suing the bank, Capital One. The CFPB accused the bank of cheating customers out of more than $2 billion in interest."

• Bank's Defense: Capital One responded by asserting that the new savings account was widely marketed and disagreed with the CFPB's allegations of withholding information.

  Waylon Wong (02:58): "Capital One can set its rates at whatever level it wants. So what the CFPB is suing over is misrepresenting the older savings account as offering a high rate."

• Administrative Context: The lawsuit is viewed within the broader context of the Biden administration's final policy actions before the inauguration of President Elect Trump. The CFPB's move is characterized by Adrienne Ma as part of a pattern of "11th hour lawsuits" aimed at shaping regulatory outcomes before the administration changes hands.

  Adrienne Ma (06:13): "Which is why I feel like there's a lot of people I still talk to who are just like, whatever happened to the student loan cancellation thing?"

Conclusion:
The lawsuit underscores the tension between regulatory bodies and financial institutions, especially during times of administrative transition. It raises questions about transparency in financial marketing practices and the protection of consumer interests.

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2. Biden Administration's Student Loan Forgiveness Efforts

Overview:
Adrienne Ma discusses the Biden administration's ongoing efforts to alleviate student loan debt, highlighting the latest developments and the overall impact of these measures.

Key Points:

• Recent Forgiveness Batch: This week alone, 150,000 borrowers had their student loans forgiven, bringing the total number of loan cancellations to 5 million since Biden took office.

  Adrienne Ma (04:59): "My indicator of the week is 150,000, which is how many people had their student loans forgiven this week by the Biden administration."

• Total Financial Impact: The administration has canceled approximately $183 billion in student loans through various channels, despite the original broad forgiveness plan being struck down by the Supreme Court.

  Adrienne Ma (05:26): "The Biden administration has forgiven about $183 billion of student loans."

• Implementation Challenges: The forgiveness has been implemented in a "piecemeal" fashion, relying on alternate methods after the main plan was invalidated, leading to public confusion and perceptions of inconsistency.

  Adrienne Ma (06:00): "Because it's like been carried out in this sort of batched, piecemeal way compared to what the original kind of sweeping agenda was."

• Public Perception: Many borrowers and observers expected a more comprehensive and immediate cancellation, leading to disappointment and confusion over the fragmented approach.

  Adrienne Ma (06:13): "Which is why I feel like there's a lot of people I still talk to who are just like, whatever happened to the student loan cancellation thing?"

Conclusion:
The administration's student loan forgiveness efforts reflect a significant financial intervention aimed at alleviating debt burdens for millions. However, the fragmented implementation strategy has led to mixed public reception and uncertainty about the permanence and extent of these relief measures, especially with the impending change in administration.

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3. FDA Bans Artificial Red Dye No. 3

Overview:
Kenny Malone brings attention to the FDA's decision to remove Red Dye No. 3 from its list of approved food additives, citing health concerns based on recent studies linking the dye to cancer in lab rats.

Key Points:

• Reason for Ban: The FDA acted in response to studies indicating that Red Dye No. 3 may cause cancer in lab rats. Although the agency notes that the specific mechanism does not apply to humans and exposure levels in food are significantly lower, the ban aligns with longstanding regulations against additives linked to cancer.

  Kenny Malone (07:18): "This week the FDA removed from its list of approved food dyes red number three."

• Implementation Timeline: Food and medicine companies have until January 2027 or 2028 to comply with the ban, phasing out products containing Red Dye No. 3.

  Kenny Malone (07:58): "Candy, frosting, medicine, and it might still be in those things through January 2027 or 2028."

• Remaining Dyes: Red Dye No. 40 remains the only approved red dye, among eight allowable food colorings. Many of these dyes have been scrutinized for various health concerns, including potential links to hyperactivity.

  Kenny Malone (09:12): "These are still legal. They are made not with Red 3, but Red 40, which now I guess is really the last remaining red dye that you can use."

• Health Implications: While the FDA maintains that Red Dye No. 3 poses no direct cancer risk to humans, the broader concern over artificial dyes and their potential effects on health persists.

  Waylon Wong (08:08): "Yikes."

Conclusion:
The FDA's removal of Red Dye No. 3 marks a significant step in regulating food additives, reflecting ongoing concerns about artificial ingredients and their health implications. This action may influence consumer choices and industry practices regarding food coloring and safety standards.

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Closing Remarks

Throughout the episode, the hosts interweave informative discussions with light-hearted moments, such as Kenny Malone's humorous anecdotes about eating Cap'n Crunch cereal, enhancing the overall engagement of the content. Producers Angel Carreras, Neil Rouch, Sierra Juarez, and Julia Richie contribute to the polished delivery of information, while sponsorship messages are seamlessly integrated without detracting from the main topics.

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Notable Quotes:

• Waylon Wong (02:34): "The CFPB accused the bank of cheating customers out of more than $2 billion in interest."
• Adrienne Ma (04:59): "My indicator of the week is 150,000, which is how many people had their student loans forgiven this week by the Biden administration."
• Kenny Malone (07:18): "This week the FDA removed from its list of approved food dyes red number three."
• Adrienne Ma (06:13): "Which is why I feel like there's a lot of people I still talk to who are just like, whatever happened to the student loan cancellation thing?"

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This episode of The Indicator from Planet Money offers a comprehensive look at pivotal economic issues, blending expert analysis with relatable commentary, making complex topics accessible and engaging for listeners.

Transcript

[Kenny Malone]

Npr.

[Waylon Wong]

This is the indicator from Planet Money. I'm Waylon Wong here with Adrienne Ma. What's up and all right. Okay. That visceral crunching sound is coming from Planet Money's Kenny Malone.

[Kenny Malone]

I'm so sorry. I'm just eating a bunch of Cap'n Crunch Berries.

[Adrienne Ma]

Don't worry about it.

[Kenny Malone]

We'll talk about it later.

[Adrienne Ma]

I am jealous right now. Have not had lunch yet, but Kenny clearly is fueled and ready to go for Indicators of the week. Yeah, that's right. It's our weekly look at numbers from the news and this week you could sort of think of it as the Biden exit edition. As President Biden leaves office, we look at some of the measures his administration is trying to push through before President Elect Trump officially takes over. We've got indicators about student loans, whether.

[Waylon Wong]

High Yield Savings Accounts are actually high.

[Kenny Malone]

Sweet, sweet. Artificial dies after the break.

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[Adrienne Ma]

Indicators of the week. Waylon, why don't you start us off?

[Waylon Wong]

My indicator comes courtesy of an agency that's very much in the crosshairs of the new administration. That agency is the Consumer Financial Protection Bureau, or cfpb. Elon Musk has said that the CFPB.

[Kenny Malone]

Should be deleted like backspace, backspace, backspace 4 backspace.

[Waylon Wong]

Oh, you're going to do it real slow. I was going to do command A and then.

[Kenny Malone]

Oh, that would do it. Okay. Yes.

[Waylon Wong]

This week the CFPB said it was suing the bank, Capital One. The CFPB accused the bank of cheating customers out of more than $2 billion in interest. That's my indicator. $2 billion. And full disclosure, I may be one of these customers.

[Kenny Malone]

No. Were you getting disinterest? What is the term here? I don't know. Skimped on interest, whatever it is.

[Waylon Wong]

Well, here. Time for a little story. Back in 2011. My husband and I opened a high yield Savings account in 2011, ahead of the curve. So we did this in 2011. It was with a bank that Capital One later acquired. So then we became Capital One customers, and our account was called 360Savings. Now, the CFPB says Capital One was marketing this product as a high interest account. Remember, this is during a time when the Fed's benchmark interest rate was hovering near zero. So a lot of people, us included, were all looking for anything promising, a higher rate. And the CFPB says that in 2019, Capital One launched a new high yield savings account called 360 Performance Savings. Oh, and the agency says these two accounts were basically identical, except for one thing.

[Kenny Malone]

I guess the interest rate was different.

[Waylon Wong]

Bingo. So here's one example the CFPB gives in its lawsuit in early 2024. The older account was paying 0.3% interest, not high. The newer account was paying out 4.35% interest. And you know, Capital One, the important thing to say here is that Capital One can set its rates at whatever level it wants. So what the CFPB is suing over is misrepresenting the older savings account as offering a high rate. And it's accusing Capital One of keeping customers in the dark about the newer product that was paying the higher interest rates. I reached out to Capital One. It said that the new savings account was marketed widely. So it disagrees with the cfpb. And it is, quote, deeply disappointed to see the CFPB continue its recent pattern of filing 11th hour lawsuits ahead of a change in administration.

[Kenny Malone]

Ooh, that's spicy.

[Waylon Wong]

Very thematic. For our indicators of the week, look at your statements.

[Kenny Malone]

Everybody but Adrian. Would you like to continue the old theme of 11th hour changes?

[Adrienne Ma]

I would. And I would say this isn't exactly a change, but an 11th hour move, I guess you could call it. My indicator of the week is 150,000, which is how many people had their student loans forgiven this week by the Biden administration, which brings the total number of borrowers who had their federal student loan debt canceled since Biden took office to 5 million people.

[Kenny Malone]

5 million is a little surprising. And those are all within the Biden four years, you're saying?

[Adrienne Ma]

That's right. And this might come as a little bit of a surprise. To some people, because Biden's original student loan forgiveness plan never really took hold. It was actually struck down by the Supreme Court. Despite that, the Biden administration has kind of pushed on with this student loan forgiveness agenda throughout all sorts of alternate channels. And all in all, the Biden administration has forgiven about $183 billion of student loans.

[Kenny Malone]

That's a big number.

[Waylon Wong]

Just finding all these other workarounds when their main plan got stymied at the court level.

[Adrienne Ma]

Which is why I feel like there's a lot of people I still talk to who are just like, whatever happened to the student loan cancellation thing? Because it's like been carried out in this sort of batched, piecemeal way compared to what the original kind of sweeping agenda was.

[Kenny Malone]

Yes. There's no stroke of the pen. Debt goes away. Dramatic moment.

[Adrienne Ma]

Yeah.

[Kenny Malone]

So what's left is this, this piecemeal patchwork thing that you described.

[Adrienne Ma]

Absolutely. And this is just one of the. The sort of 11th hour moves we've seen from the Biden administration in recent days.

[Waylon Wong]

Right. He blocked Nippon Steel of Japan from buying U.S. steel. That was in the news a ton.

[Adrienne Ma]

Mm.

[Kenny Malone]

There's. Was there a ban on new oil and gas, natural gas drilling of some sort?

[Adrienne Ma]

That's right.

[Waylon Wong]

Yeah.

[Adrienne Ma]

There was also that. Let's see, there was. The administration also proposed restrictions on the export of AI chips. And even this week they released a proposed rule for nutrition labels. So they've been pretty busy.

[Kenny Malone]

I feel like I can see the, the smoke coming off of the quickly signing pen from. From Pennsylvania Avenue.

[Adrienne Ma]

We'll see if all this, you know, kind of pen action really has a lasting effect because of course, President Elect Trump is taking office in a few days and may try and roll back some of these policies. All right, so let's round it out. Kenny, what you got for us?

[Kenny Malone]

All right, well, my indicator of the week. Sorry, more Captain Crunch. What are you saying is the number three, because this week the FDA removed from its list of approved food dyes red number three. This is in response to a petition citing two studies showing a link between red three and cancer in lab rats. Now, the FDA says that that particular mechanism causing rat cancer doesn't actually happen in humans. Plus we were eating the food diet, much lower rates. But they are banning the dye because of a decades old law banning additives that cause cancer in humans or animals. That's the deal.

[Waylon Wong]

Huh. So red number three, what do you find this in?

[Kenny Malone]

The FDA says it is a less used dye. For what it's worth, it has actually been banned in cosmetics since the 90s.

[Waylon Wong]

Yikes.

[Kenny Malone]

But yeah, candy, frosting, medicine, and it might still be in those things through January 2027 or 2028. Food and medicine companies have until then to comply respectively with those things. Oh, God. So good.

[Adrienne Ma]

I guess this is where we ask why, Kenny, you are eating fistfuls of Captain Crunch.

[Kenny Malone]

Oh, well, thank you for asking, everybody. Much like Waylon, a personal story. Imagine a tiny little teeny kid. Kenny Malone. I ate some Captain Crunch then with red berries, and legend has it I got so hyper that my parents forbid me from eating red dye ever again. Now I'm all grown up and Cap'n Crunch makes cereal that is. Oops, just the berries. In fact, I separated out just the red berries from that cereal and my parents aren't here to stop me. So go.

[Adrienne Ma]

Wait.

[Kenny Malone]

So good.

[Adrienne Ma]

Is this actually a thing though? Like, could the hyperness that you experienced just be from the fact that you just ate a lot of kids cereal.

[Waylon Wong]

Or natural joie de vivre science podcast?

[Kenny Malone]

Adrian, that's short way versus for that question. Now, I will say these are redder and more sugary. You're right. And more delicious than I remember. But worry not, everyone. These are still legal. They are made not with Red 3, but Red 40, which now I guess is really the last remaining red dye that you can use.

[Waylon Wong]

40 times more red.

[Kenny Malone]

And if you're keeping track at home, we are down to eight allowable food dyes. There's a couple blues, yellows, a green, many of which, According to a 2012 literature review, do have health concerns of varying degrees, including. Yeah, hyperactivity is.

[Waylon Wong]

Wow. Well, let us know if you ever go to sleep tonight, Kendall.

[Kenny Malone]

I'm so happy right now.

[Waylon Wong]

Well, that's it for indicators of the week. Kenny, thanks so much for joining us. We will let you go to continue your breakfast of champions.

[Kenny Malone]

I'm gonna have a very productive rest of the day, I think.

[Waylon Wong]

This episode was produced by Angel Carreras with engineering by Neil Rouch. It was fact checked by Sierra Juarez and edited by Julia Richie. Kicking Cannon is our show's editor and the indicator is a production of.

[Kenny Malone]

My Precious Om nom nom nom.

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