Consumer prices decline, Corinthian Colleges sued and major sponsors are piling on the NFL. Read about these and more of the day's top business news stories.
Consumer Prices Decline 0.2 Percent in August
U.S. consumer prices declined for the first time since April 2013 in August, the Labor Department announced Wednesday. The Consumer Price Index dipped 0.2 percent. A decline in energy prices of 2.6 percent offset increases in food and shelter costs. The drop followed a 0.1 percent gain in July. The index for all items excluding food and energy was unchanged in August, the first month since October 2010 that the index did not increase.
“Predatory” Corinthian College Sued
The federal Consumer Financial Protection Bureau is suing Corinthian Colleges for what it calls a "predatory lending scheme,” and is seeking more than $500 million for borrowers who used the for-profit education company's private student loans. Corinthian misled students about their job prospects, in some cases paying employers to offer temporary jobs to graduates, the agency said Tuesday. Corinthian charged as much as $75,000 for a bachelor's degree and pushed students into private loans with interest rates of roughly 15 percent, more than double the rate for a federal loan, the CFPB also alleged. More than 60 percent of Corinthian students with those loans defaulted within three years. As of March, 74,000 students were enrolled at Corinthian’s campuses. The Education Department has already placed Corinthian under an independent monitor. The company also plans to sell 85 of its branch campuses.
Report Finds No Contamination from Fracking
The final report from a landmark Department of Energy study on hydraulic fracturing, or fracking found no evidence that chemicals or brine water from the gas drilling process moved upward to contaminate drinking water at a site in western Pennsylvania, the Associated Press reports. The report was the first time an energy company allowed independent monitoring of a drilling site during the fracking process and a year-and-a-half afterward. Researchers found that the chemical-laced fluids used to free gas stayed about 5,000 feet below drinking water supplies. The fracking process uses millions of gallons of high-pressure water mixed with sand and chemicals to break apart rocks rich in oil and gas. That has led to a national boom in production, but also concerns about possible groundwater contamination. A separate study published this week by different researchers examined drilling sites in Pennsylvania and Texas and found that faulty well construction, but not fracking itself, caused pollution.
Major Sponsors Piling on the NFL
Anheuser-Busch issued a strongly worded statement Tuesday about its concerns related to the National Football League’s recent scandals. But the company, as well as other major sponsors, has stopped short of pulling advertising. Anheuser-Busch said Tuesday that it has spoken with the NFL about concerns related to recent incidents that are sparking outcry and controversy, including an investigation into how long the NFL and its commissioner Roger Goodell knew about a video that shows Baltimore Raven Ray Rice knocking out his then-fiancée; as well as the Minnesota Vikings' decision to let Adrian Peterson play while he faces an abuse charge for spanking his 4-year-old son with a wooden switch. New allegations of excessive discipline have been raised involving a second child. "We are not yet satisfied with the league's handling of behaviors that so clearly go against our own company culture and moral code," the company said in a statement. McDonald's, Visa and Campbell Soup Co. say they have also voiced similar concerns to the league. Radisson hotels, thus far, are the only company to pull its sponsorship of the Minnesota Vikings.
Boeing and SpaceX to Taxis Americans to Space Station
NASA awarded Boeing and SpaceX to build commercially owned and operated "space taxis" that will fly astronauts to the International Space Station, ending U.S. dependence on Russia for rides, U.S. Senator Bill Nelson said on Tuesday. Escalating tensions with Russia over its annexation of the Crimea region of Ukraine as well as sanctions enacted against the country have given a new urgency to the contract. Boeing's CST-100 spaceship would launch aboard Atlas 5 rockets, built by United Launch Alliance, a partnership of Lockheed Martin and Boeing. SpaceX, which already has a $1.3 billion NASA contract to fly cargo to the space station, intends to upgrade its Dragon freighter to carry astronauts, the Associated Press reports.
Sears Borrows from CEO’s Hedge Fund
Come see the borrowing side of Sears. The beleaguered retailer announced it had secured a $400 million loan this week from a hedge fund whose sole shareholder is the company’s chairman, CEO and leading investor, Eddie Lampert. Sears, which lost $1 billion during the first half of the year, said in a statement to CNNMoney that the deal does not create a conflict of interest and is in the "best interest of the company."