Consumer Law
CL&P Blog 
The contributors to this blog are a diverse group of lawyers and law professors who practice, teach, or write about consumer law and policy. Although the blog is hosted by Public Citizen's Consumer Justice Project, the views expressed here are solely those of the individual contributors and do not necessarily reflect those of the institutions with which they are affiliated.
Post Frequency: 2.7/day Last Entry: November 20, 2009 at 17:43:40 Recent Entries: 873
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"Problem" Home Mortgages Hit Record High
Posted on November 20, 2009This story in today's Washington Post explains that a new bank industry survey shows that the percentage of home mortgages delinquent or in foreclosure is at a record high. Here's a couple paragraphs to give you a flavor: More than...
Florida opens the social Web to lawyers
Posted on November 17, 2009by Greg Beck Under a settlement agreement filed yesterday, Florida lawyers are now free to use sites like Avvo and LinkedIn without fear of professional discipline. The settlement ends a lawsuit filed by Public Citizen earlier this year on behalf...
Number of tort trials decreases.
Posted on November 17, 2009Tort reformers would have us believe that our judicial system is broken, clogged down with frivolous tort suits. In fact, a recent study shows that the number of state court tort suits that make it to trial declined steadily over...
Jenzabar ?expert witness? claims that Google still uses keyword meta tags
Posted on November 16, 2009Proving that if you pay so-called expert witnesses enough money you can get them to say just about anything, Jenzabar has found a computer expert named Frank Farance who has submitted sworn testimony that Google really does take keyword meta...
Copyright overreach takes a world tour
Posted on November 13, 2009by Paul Alan Levy Rob Pegararo has published an excellent piece in the Washington Post about the dangers posted by the largely secret negotiations for a so-called anti-countefeiting treaty that is actually being used to try to curb important consumer...
More on the Fed's New Rule on Overdraft Fees
Posted on November 13, 2009by Brian Wolfman Following up on Jeff Sovern's post yesterday on the Federal Reserve's new rule that will bar banks from imposing certain overdraft fees unless the consumer opts in, check out this article in today's Washington Post. As Jeff's...
2 million homes lost
Posted on November 12, 2009In 2006 the Center for Responsible Lending predicted that the subprime foreclosure crisis would result in 2 million foreclosed homes. That sad milestone was reached some time last month. HOPE NOW's September foreclosure report gives the grim news ? there...
New Fed Rules Require Consumer Opt-in Before Consumers Can Be Charged Overdraft Fees on ATM/Debit Cards
Posted on November 12, 2009An excerpt from the press release: Before opting in, the consumer must be provided a notice that explains the financial institution's overdraft services, including the fees associated with the service, and the consumer's choices. The final rules, along with a...
Health Care and Veterans
Posted on November 11, 2009Cross-posted from Jon Wolfman's BlogShot As you honor veterans today, consider this: Over 1,461,000 working-age veterans lack any health insurance and, last year, over 2,266 died as a direct result. That is more than 14 times the number of deaths...
Philip Lehman Keitel Paper on Gift Card Laws
Posted on November 11, 2009Philip Lehman Keitel of the Philadelphia Fed has written The Laws, Regulations, Guidelines, and Industry Practices that Protect Consumers Who Use Gift Cards. Here's the abstract: This paper discusses consumer protections available to gift-card users. Specifically, it examines the ways...
Happy Talk from Treasury
Posted on November 10, 2009By Alan White Today Treasury released the October monthly report on the Home Affordable modification program. Once again Treasury gives us only the good news - 650,000 temporary 3-month payment plans with homeowners since the program started in April...
NHTSA Recalls for October 2009
Posted on November 09, 2009Go here for the October 2009 vehicle safety and related recalls issued by the National Highway Traffic Safety Administration.
Banks Fear Consumer Confusion as House Moves Up Effective Date for Credit CARD Act
Posted on November 06, 2009by Jeff Sovern Earlier this week, as the Times reported, the House passed a bill to move up the effective date of some of the Credit CARD Act provisions to December 1. Here's an excerpt from the Times article: Industry...
Jenzabar Tries to Forbid Blogging About Its Abusive Trademark Litigation
Posted on November 05, 2009The educational software company Jenzabar, whose abusive trademark claims were criticized in my own blog post here as well as by another Public Citizen employee on the Citizen Vox blog last month, is now claiming that such blogging is illegal....
Baltimore v Wells Fargo - Targetting Blacks for Subprime
Posted on November 05, 2009The Consumerist blog has posted the full text of the two remarkable Wells Fargo loan officer affidavits that describe in detail the lender's systematic targetting of Black homeowners to sell them high-price subprime mortgages, regardless of how good their credit...
Jeff Gelles Column on How Credit Card Issuers Used the Long Effective Dates of the Credit CARD Act
Posted on November 04, 2009Here. An excerpt: [Under the Credit CARD Act,] card issuers such as Citibank and Chase will have to quit a set of practices that regulators and lawmakers have finally outlawed as unfair or deceptive. But not right away. In a...
Shauhin A. Talesh on the Privatization of Public Legal Rights
Posted on November 03, 2009Shauhin A. Talesh has written The Privatization of Public Legal Rights: How Manufacturers Construct the Meaning of Consumer Law, 43 Law & Society Review 527 (2009). Here's the abstract: This article demonstrates how the content and meaning of California?s consumer...
Huffington Post Op-Ed on the Law Professor Letter Supporting the Consumer Financial Protection Agency
Posted on November 02, 2009Here. And here's the concluding paragraph: Perhaps those of us who have studied and taught consumer protection law are as much to blame as the banks and regulators for the mishaps of the recent past: we were too quiet while...
Federal Legislation Pending Regarding Bank Overdraft Fees
Posted on November 01, 2009by Brian Wolfman Check out this article in today's Washington Post by Jeff Plungis concerning proposed federal legislation on bank overdraft fees. The article's focus is on legislation championed by Rep. Barney Frank that would make overdraft protection on debit...
CPSC Recalls for October 2009
Posted on November 01, 2009Go here for the Consumer Product Safety Commission's product safety recalls for October 2009.
Norm Silber on How Opposition to the CFPA Connects to Traditional Anti-Consumer Protection Efforts
Posted on October 31, 2009Here.
Federal/State Agencies Obfuscate on Bankruptcy
Posted on October 30, 2009Foreclosurebuzz has done an interesting survey of government web sites purporting to offer aid to consumers facing foreclosure. Most agency web sites do not mention bankruptcy at all, despite the fact that Chapter 13, and in some cases Chapter 7,...
October Foreclosure Crisis Update
Posted on October 29, 2009By Alan White October?s mortgage securities investor reports are out and the news is discouraging. The foreclosure inventory is unchanged and modifications are still down from earlier this year. There is little evidence that Treasury?s Home Affordable modification program is...
Vincent DiLorenzo on Market Deregulation and Moral Hazard in the Mortgage Market
Posted on October 28, 2009My colleague, Vincent DiLorenzo of St. John's, has written Mortgage Market Deregulation and Moral Hazard: Equity Stripping Under Sanction of Law. Here's the abstract: This article examines the failure of the current regulatory structure to adequately protect consumers against risks...
NCLC Report on How Subprime Abuses and Scammers Now Hit Reverse Mortgages
Posted on October 27, 2009The same subprime mortgage abuses and even the same individual scam artists are showing up in the reverse mortgage market, putting at risk the equity and savings of millions of seniors. According to NCLC?s Subprime Revisited: How the Rise of...
NCLC Report on Why Mortgage Servicers Foreclosure When They Should Modify Loans
Posted on October 27, 2009A new NCLC report, authored by Diane E. Thompson, finds that mortgage servicers?including many large banks?have found it cheaper to foreclose on homeowners than to offer loan modifications that would benefit homeowners and investors. Americans who might be able to...
Can we talk? How servicers undermine mediation
Posted on October 24, 2009By Alan White More than 25 states and localities are using mediation programs of various kinds to address the foreclosure crisis. These programs assume that many foreclosures could be prevented if only the servicer and homeowner could break through all...
Does this sound as crazy to you as it does to me?
Posted on October 24, 2009by Brian Wolfman Among other things, the Fair Credit Reporting Act gives consumers the right to dispute inaccuracies on their credit reports and to have the reports corrected. That's a good thing because credit reports are amazingly inaccurate. So, you'd...
New Tennessee trial court decision on Internet anonymity
Posted on October 23, 2009by Paul Alan Levy The Citizen Media Law Project carries word of a ruling by a Tennessee Circuit Court judge in Schwartz v. Doe (October 8, 2009), which ordered identification of Doe defendants but only after adopting a tough legal...
Fabulous Philadelphians
Posted on October 22, 2009By Alan White Besides having a world-cl ass orchestra and baseball team, and stunning Art Deco hotel for this week's National Consumer Law Center conference, Philadelphia boasts a wonderful legal community that continues its extraordinary collaborative effort to tackle the...
National Consumer Rights Litigation Conference this week!
Posted on October 19, 2009Over 800 consumer advocates will be converging on Philadelphia this week and weekend for the Consumer Rights Litigation Conference and Consumer Class Action Symposium, both put on by the fine folks at the National Consumer Law Center. If you are...
Fed Action on Bounce Loans?
Posted on October 19, 2009In Senate testimony last Wednesday, Federal Reserve governor Daniel Tarullo promised a final regulation on bounce loans (overdraft fees) within the month. Banks are charging an average fee of $34 for average overdrafts of $17. One hot issue raised by...
Article on Bank Charging Fees to Pay Checks Drawn on Its Own Accounts
Posted on October 16, 2009Here.
Do the FTC's New Advertising Guidelines Run Afoul of Section 230?
Posted on October 16, 2009by Paul Alan Levy Since Eric Goldman is our leading scholar on the issue of section 230 immunity, I hesitate to question the soundness of anything he says on the subject. But I have qualms about his recent posts here...
New Jersey School Board Subpoenas Citizens Who Criticize Its Staff to Sue Them for Defamation
Posted on October 16, 2009The Freehold School Board has subpoenaed New Jersey Online to identify several citizens who chimed in to discuss stories published in the Newark Star Ledger and New Jersey Online about several high administrators who got fake degrees from an online...
Interesting Newsweek Take on CFPA Proposal
Posted on October 15, 2009The story is titled You Call This Financial Reform? Why there's been a lot of talk about protecting consumers but little action . . .
Teaching Consumer Law Conference ? Houston, Texas, 21 & 22 May 2010
Posted on October 15, 2009Once again, the Center for Consumer Law at the University of Houston Law Center is organizing an international conference on ?Teaching Consumer Law." The Conference will focus on how, if at all, the teaching of consumer law should be affected...
Car Sales Plummet After Cash-for-Clunkers Program Ends
Posted on October 14, 2009Retail sales in the U.S. dropped in September by 1.5%, driven by a whopping 10.4% decrease in auto sales. (Excluding the drop in auto sales, retail sales actually rose by .5%, which was better than what analysts had predicted.) This...
Jenzabar Joins Trademark Abusers Hall of Shame
Posted on October 13, 2009Jenzabar, a company that makes software systems for colleges and universities, has joined the trademark abusers? hall of shame by relentlessly pursuing trademark claims against the makers of a documentary film about the student protests at Tiananmen Square...
When Wall Street talks, Secretary Geithner Listens
Posted on October 12, 2009Interesting story on Treasury Secretary Geithner's telephone logs, showing he talks with Goldman and Citi CEOs more frequently than the chairs of the House and Senate Banking committees. HT Melissa Huelsman.
Home Affordable's weak start
Posted on October 12, 2009By Alan White Two important reports on the foreclosure crisis and the Administration?s plan to end it were released on Friday. So far the Home Affordable modification program (HAMP) is looking like an expensive failure. Most disturbing is the conversion...
Joe Nocera Column Calling for Consumer Financial Protection Agency
Posted on October 10, 2009by Jeff Sovern Joe Nocera has a terrific column in today's Times, Have Banks No Shame?, supporting the Consumer Financial Protection Agency. The column should be required reading for anyone interested in consumer protection. Here's my favorite part: The current...
Could a Consumer Financial Protection Agency Have Prevented the Economic Crisis?
Posted on October 09, 2009That's the title of my op-ed at FinReg21. Here are the first two paragraphs: The economic crisis was caused in part by millions of borrowers taking out loans on which they later defaulted. Perhaps if the Obama administration?s proposed Consumer...
David Reiss on Regulation of Subprime and Predatory Lending
Posted on October 07, 2009David J. Reiss of Brooklyn has written an entry for the International Encyclopedia of Housing and Home on Regulation of Subprime and Predatory Lending. Here's the abstract: This is an entry on the Regulation of Subprime and Predatory Lending for...
Times on Prepaid Debit Card Fees and Blogger Disclosure Rules
Posted on October 06, 2009by Jeff Sovern Today's Times includes two interesting consumer law pieces. First, Prepaid, but Not Prepared for Debit Card Fees lists some of the amazing fees charged for prepaid debit cards, including application fees (up to $99), activation fees ($9...
NHTSA Recalls for September 2009
Posted on October 06, 2009Go here for the September 2009 National Highway Traffic Safety Administration vehicle safety recalls.
Adaptive Marketing Backs Off Suit to Identify Blogger -- but Claims Victory
Posted on October 06, 2009Adaptive Marketing, whose advertisements for ?free credit scores? featuring Ben Stein were criticized by the anonymous blogger ?Flaneur de Fraude,? has given up its quest to identify the anonymous blogger. Unfortunately, rather than admitting that it had no basis for...
Is Bankruptcy Law Too Tough on Student Loan Debtors?
Posted on October 06, 2009by Brian Wolfman Over the past several decades, federal law has become increasingly tough on student loan debtors. Statutes of limitations have been eliminated, and the bankruptcy law makes it very difficult to discharge student loan debt in both chapter...
CPSI Sues Drug Maker Bayer Over Selenium Claims
Posted on October 05, 2009by Brian Wolfman Here is one of many news accounts about the Center for Science in the Public Interest's new suit against Bayer for allegedly deceiving consumers that the mineral selenium, contained in Bayer's One-a-Day Multivitamins for men, helps "support...
Consumer Product Safety Commission Recalls for September 2009
Posted on October 04, 2009Read the Consumer Product Safety Commission recalls for September 2009.
Good news on Foreclosures?
Posted on October 01, 2009HOPE NOW released its numbers for August today, and while one month is not a trend, there are positive signs. Foreclosure starts were down about 10% from the levels of the past six months, foreclosure sales were down, and modification...
Fed Proposes New Amendments to Reg Z to Implement Credit CARD Act
Posted on October 01, 2009An excerpt from the press release: Among other things, the proposed rule would: Protect consumers from unexpected increases in credit card interest rates by generally prohibiting increases in a rate during the first year after an account is opened and...
Adam Levitin Paper on the Consumer Financial Protection Agency
Posted on September 30, 2009Still more on the proposed CFPA (a theme of the last few days): Adam Levitin of Georgetown, and one of the signatories of our letter, has written The Consumer Financial Protection Agency. Here's the abstract: The Obama administration has proposed...
Dozens of Law Professors Join Letter Supporting Creation of the Consumer Protection Financial Agency
Posted on September 29, 2009by Jeff Sovern 74 law professors teaching in areas related to consumer and banking law have joined in a letter supporting creation of the Consumer Financial Protection Agency. The professors, who teach at law schools in 28 states and the...
Did Google Yield Too Easily to a Baseless Court Order?
Posted on September 28, 2009Once again, a judge in the Northern District of California has issued an overbroad temporary restraining order at the behest of a bank in a case over which federal jurisdiction was highly questionable. Last year, Judge Jeffrey White issued a...
Jeff Gelles of Philadelphia Inquirer Column on Why TILA Failed in the Subprime Crisis
Posted on September 27, 2009Here. Disclosure: the column discusses my survey of mortgage broker which found that many borrowers spent too little time with the final TILA disclosures to understand them and that borrowers virtually never pull out of the loans upon receiving those...
interesting Financial Services Committee Press Releases
Posted on September 24, 2009The House Financial Services Committee, chaired by Barney Frank, issued two particularly interesting press releases yesterday. The first, excerpted below, compares the work of the Democrats with the Fed in connection with consumer protection. It emphasizes how the Fed failed...
Representational plaintiff status lives!
Posted on September 23, 2009Despite the best efforts of many defense firms, the DC consumer protection law retains its unique status of being the only true "private attorney general" law in the country. (California used to share this distinction, until a ballot initiative rewrote...
Ray Brescia on Improving Financial Sector Practices Through Voluntary Codes of Conduct
Posted on September 23, 2009Ray Brescia of Albany has written Trust in the Shadows: Law, Behavior and Financial Re-Regulation, Buffalo Law Review. Here's the abstract: In the deep throes of the Great Depression, in an effort to restore faith in America?s economy, the Roosevelt....
Jennifer S. Martin on Depositary Account Overdraft Fees
Posted on September 22, 2009Jennifer S. Martin of Oregon has written How Your $4 Coffee Can Cost You $39 or More if You Use Your Debit Card! Federal Level Consumer Protection and Modern Payments Transactions, University of Memphis Law Review. Here's the abstract: In...
Article on Some Relationships Between Payday Borrowing and Credit Card Borrowing
Posted on September 21, 2009Sumit Agarwal of the Federal Reserve Bank, Paige Marta Skiba of Vanderbilt and Jeremy Tobacman of Penn have written Payday Loans and Credit Cards: New Liquidity and Credit Scoring Puzzles? Here's the abstract: Using a unique dataset matched at the...
Developments about Adaptive Marketing's suit to identify critical blogger
Posted on September 18, 2009Yesterday I posted about a disturbing lawsuit seeking to identify an anonymous Internet blogger, Flaneur de Fraude, because she criticized Adaptive Marketing for what Flaneur and Reuters blogger Felix Salmon called a ?predatory bait and switch.? Two interesting factoids emerged...
Milberg Firm Files Class Action Against NAF
Posted on September 18, 2009The claims include UDAP and FDCPA violations, as well as breach of contract. Milberg's statement is here while the complaint is here (hat tip to Ray Warner).
Gannett Shamed Into Changing Policy on Responding to Requests to Identify Blog Commenters
Posted on September 18, 2009An interesting AP article has appeared about a controversy in Wisconsin -- after several nasty comments appeared on the website of a Wausau newspaper about a local public official, the official asked the paper who was writing the nasty comments,...
"How to Beat the Bank," a Mini-Documentary on Overdraft Fees
Posted on September 17, 2009Filmmaker Karney Hatch, annoyed with overdraft charges on his bank statements, took Wells Fargo to small claims court and got the charges reversed. In an interview for Hatch's film, Ralph Nader speculates that if a million consumers did what Hatch...
Foreclosure Update
Posted on September 17, 2009By Alan White Two years into the foreclosure crisis, the problem is still getting worse. July saw a new record high in foreclosure starts of 280,000 for the month, according to HOPE NOW. Mortgages are entering the foreclosure pipeline at...
Company hawking ?free? credit scores goes after blogger who calls this a bait and switch
Posted on September 17, 2009Adaptive Marketing, which ran into controversy a few months ago for using former New York Times columnist Ben Stein in its TV ads for ?free credit scores,? has brought a pre-litigation discovery proceeding against a blogger using the pseudonym ?flaneur...
New Paper Debunks Industry Arguments that CFPA Should Preempt State Law
Posted on September 16, 2009NCLC has just released a white paper Preemption and Regulatory Reform: Restore The States? Traditional Role As ?First Responder,?that has particular relevance to bank lobbyists' attempts to expand bank immunity from state law in the proposed Consumer Financial Protection Agency...
A New Piece in the "MERS" Puzzle
Posted on September 15, 2009I?ve spent more time than I care to admit lately puzzling out what I believe is the most peculiar company in American consumer finance. Mortgage Electronic Registration Systems, Inc.?more commonly known as ?MERS?? maintains a national database tracking ownership and...
Op-ed in Support of Consumer Financial Protection Agency
Posted on September 14, 2009Check out this Detroit Free Press op-ed by U. Mich. law professor John Pottow in support of a Consumer Financial Protection Agency. Thanks to U.S. PIRG's consumer blog for pointing it out.
Journal of Consumer Affairs Special Issue on Privacy Literacy
Posted on September 11, 2009Here's the table of contents from the Journal of Consumer Affairs, Fall 2009, Volume 43, Number 3 Special Issue on: Privacy Literacy -- How Consumers Understand and Protect Their Privacy: Editorial Prelude by guest editors of special issue Jeff Langenderfer...
Chamber of Commerce Launches Anti-Consumer Financial Protection Agency Website
Posted on September 10, 2009Yikes! Your friends at the U.S. Chamber of Commerce have created this website dedicated to defeating the proposed Consumer Financial Protection Agency. It's aptly named "Stop the CFPA."
Catholic University Program on Proposed Consumer Financial Protection Agency
Posted on September 10, 2009Catholic University Law School is presenting what sounds like a terrific program on the proposed Consumer Financial Protection Agency on October 20, 2009 from 5:00 to 6:30 p.m. Admission will be by reservation only. Speakers include Michael Barr, Assistant Secretary...
HAMP Update
Posted on September 09, 2009By Alan White Trial mortgage modifications under the Home Affordable mortgage program (HAMP) have reached about the same levels that servicers were achieving voluntarily in the first quarter of 2009. Treasury's unhelpful data presentation in its second monthly report on...
New York Times Story on Debit Card Overdraft Fees
Posted on September 09, 2009by Brian Wolfman The front page of the New York Times has this excellent piece on overdraft fees imposed on debit card holders. As the beginning of the article explains, debit card holders are not told at the point of...
More on over-draft fees
Posted on September 09, 2009Over-draft fees are big business everywhere. In Australia, the fees account for over $1 billion in revenue. This is all, however, about to change. Banks in Australia are eliminating over-draft fees, after a proposed law limiting the charge to a...
More on Credit Card Marketing to People Under 21
Posted on September 08, 2009by Brian Wolfman U.S. PIRG's Consumer Blog has this nice post concerning a series of related articles on credit card marketing on college campuses and student debt more more generally. The new Credit CARD Act, which takes effect next February,...
NHTSA Recalls for August 2009
Posted on September 08, 2009Here are the vehicle (and related) recalls issued by the National Highway Traffic Safety Administration for August 2009.
Consumer Credit DVD Available to Consumers
Posted on September 08, 2009The Center for Consumer Law at the University of Houston has produced an educational DVD entitled "Money, Credit and the Law--Know Your Rights." Funded in part by grants from the Texas Bar Foundation and Money Management International, the video shows...
Froot Loops a Smart Choice?
Posted on September 07, 2009by Jeff Sovern Friday's Times brought For Your Health, Froot Loops about an industry-backed labeling campaign called "Smart Choices" that's ?designed to help shoppers easily identify smarter food and beverage choices.? Designed to sell food might be closer to the...
Court to Greenmailers: Drop Dead
Posted on September 04, 2009by Stephen Gardner A bane of honest class action lawyers (and there are plenty of them, the vast majority) is the creature that I call a greenmailer -- a lawyer who objects to a good class action settlement only in...
More On Increasing Credit Card Fees
Posted on September 03, 2009by Brian Wolfman Last month, I blogged here about large increases in credit card rates and fees that may be tied to recently enacted federal credit card reform legislation (which mainly goes into effect next February). Consumers Union has posted...
Even Consumer Law Professors Have Consumer Law Problems
Posted on September 03, 2009by Jeff Sovern Last winter, I bought a computer for my daughter. The computer came with a free sample of Norton's security program already installed (It's likely that Norton paid the manufacturer to have that program installed as a marketing...
Should Bank Regulation Be Up To One Federal Regulator?
Posted on September 02, 2009In this New York Times op-ed, Sheila Bair (pictured to the right), the Chair of the Federal Deposit Insurance Corporation, explains why she supports a new Consumer Financial Protection Agency but thinks it would be a mistake to create one...
August 2009 CPSC Recalls
Posted on September 02, 2009Go here for the August 2009 product safety recalls from the Consumer Product Safety Commission.
Busted, the Book
Posted on September 02, 2009by Jeff Sovern I've been listening to the audio version of New York Times reporter Edmund Andrews' memoir, Busted: Life Inside the Great Mortgage Meltdown (a portion of the book was published in the Sunday Times magazine under the title...
American Council On Consumer Interests Conference and Call for Papers
Posted on September 01, 2009The American Council on Consumer Interests will hold its 2010 conference in partnership with the Federal Reserve Bank of Atlanta on April 14-16, 2010. Deadlines for submissions begin October 15, 2009. More information, including the Call for Papers can be...
A Solution to Incomprehensible Contracts?
Posted on August 30, 2009Back on August 20, the Times published John Aloysius Cogan's op-ed piece, Plain English Is the Best Policy about the unintelligibility of health insurance policies. My letter appeared on Friday, under the heading "No More Gobbledygook: To the Editor: Re...
Ten Practice Implications of NAF Withdrawal from Consumer Arbitrations
Posted on August 28, 2009The Minnesota consent order requiring the National Arbitration Forum (NAF) to cease by July 24 all new consumer arbitrations has ten dramatic practice implications, detailed in NCLC REPORTS, Deceptive Practices & Warranties Edition (July/August 2009)...
Chrysler Assumes Post-Bankruptcy Product-Liability Claims
Posted on August 28, 2009by Adina Rosenbaum In a reversal of its position in the bankruptcy proceeding, Chrysler has agreed to assume liability for people injured after the Chrysler bankruptcy by vehicles sold before the bankruptcy. As background, in late May and early June,...
Debate on Forced Arbitration With Alan Kaplinsky
Posted on August 28, 2009by Deepak Gupta This week, the Legal Talk Network hosted a debate over mandatory arbtiration between me and Alan Kaplinsky, a corporate defense lawyer known for pioneering the use of arbtiration clauses by banks and lenders. I was surprised by...
An Experiment on What Advertising Content is Worth
Posted on August 27, 2009Marianne Bertrand of University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR), Dean S. Karlan of Yale University - Economic Growth Center; Massachusetts Institute of Technology (MIT) - Abdul...
Call for Papers
Posted on August 27, 2009We've received the following Call for Papers: Papers are invited for the 5th edition of the Consumer Journal, a publication of the Consumer Awareness Organisation, a non-governmental organisation based in Nigeria. Interested contributors should send their papers to the address...
Wyoming Food Safety, Security, and Sources Conference
Posted on August 27, 2009Food Safety, Security and Sources, A Recipe for Tough Times is the theme for the 9th annual Consumer Issues Conference at the University of Wyoming in Laramie, Wyoming, to be held September 24th and 25th. An exciting program is being...
Roberds and Schreft on the Economics Behind Data Security, Privacy, and Identity Theft
Posted on August 26, 2009William Roberds and Stacey L. Schreft , both of the Fed, have written Data Security, Privacy, and Identity Theft: The Economics Behind the Policy Debates, 23 Economic Perspectives (2009). Here is the (very short) abstract: In this article, we explore...
2009 Selected Consumer Statutes Now Available
Posted on August 25, 2009Here, for $36. Here's the description: This statutory supplement is the most up-to-date statutory collection available for use in a consumer protection course or for practicing attorneys. The 2009 edition includes the Credit CARD Act of 2009, changes to Regulation...
Official Word from US Courts -- Feel Free to Use RECAP With Our Blessing
Posted on August 25, 2009by Paul Alan Levy I got a call this afternoon from Michel Ishakian, the Deputy Chief for IT Policy and Budget at the Administrative Office of the United States courts. She assured me that they have no problem with counsel...
Hartford Courant Consumer Columnist Laid Off
Posted on August 22, 2009Sad news for those who care about consumer protection: the Hartford Courant has laid off consumer columnist George Gombossy. According to the Times coverage, Gombossy attributes his firing to his refusal to stop criticizing advertisers. The Courant claims the position...
CPSC and NHTSA Recalls for July 2009
Posted on August 21, 2009The July 2009 Consumer Product Safety Commission product recalls are here. The July 2009 National Highway Traffic Safety Administration vehicle recalls are here.
Federal court using scare tactics to block sharing of public records
Posted on August 21, 2009It appears that the US Courts, concerned about competition from software that offers the possibility of widespread free access to documents filed on federal judicial dockets, for which the public would otherwise have to pay the courts at the rate...
Credit Card Company Fees on the Rise
Posted on August 20, 2009New credit card rules go into effect today. (And others will go into effect in February, when new Congressional legislation becomes effective.) Today's rules are relatively minor, such as giving consumers more time to pay their bills. Next year's changes...
More on "Clunkers" Program: Some Dealers Pulling Out; Biggest Sellers Not From Detroit
Posted on August 20, 2009This story in today's Washington Post explains that half the dealers in the New York City area and at least one in Maryland is pulling out of the "cash for clunkers" program because of delays in getting paid by the...
Doctors as Bankers
Posted on August 19, 2009My colleague, Jim Hawkins, has posted an interesting article on SSRN. Here is an abstract: In a variety of medical contexts, doctors play a prominent role as bankers, lending directly to patients or arranging for patients to obtain loans from...
New Book by Bill Patry -- who is back to blogging
Posted on August 18, 2009Bill Patry has just published an intellectually provocative and useful polemic, Moral Panics and the Copyright Wars, that urges public attention to excessive incursions on the public domain undertaken at the behest of copyright holders through what Patry calls ?The...
Bank of America stops arbitration?Another problem with consumer arbitration
Posted on August 17, 2009You may have read that Bank of America has decided to stop requiring its customers to arbitrate disputes. Many appluaded this as a victory for consumers, which it is. It also is another example of why consumer arbitration must be...
Kurt Eggert Article on Securitization
Posted on August 17, 2009Kurt Eggert of Chapman has written The Great Collapse: How Securitization Caused the Subprime Meltdown, 41 Conecticut Law Review. Here's the abstract: This Article builds on existing criticism of securitizing subprime loans and argues that one of the primary causes...
Will the New Disclosure Date for Mortgage Terms Lead to Delays?
Posted on August 16, 2009Bob Tedeschi has an interesting column in today's Times about the impact of the new rule that obliges lenders to provide the final TILA disclosures for mortgages three days before closing, as opposed to the old rule that they could...
Judges and Credit Card Cases
Posted on August 15, 2009by Jeff Sovern Suppose you're a judge presiding over cases in which debt buyers--who have bought credit card debt from credit card companies or, often, other debt buyers--sue the credit card holders for the amounts due on the credit card....
Snake Oil Salesman Liable for $50 Million: Apparently Can't Cure Cancer
Posted on August 14, 2009by Christopher L. Peterson The Boston Herald reported today that a federal judge awarded the Federal Trade Commis sion nearly $50 million in damages in its case against Donald Barrett. Mr. Barrett is an infomercial pitchman who hawked his ?Coral...
Bank of America Abandons Mandatory Arbitration
Posted on August 13, 2009CNBC is reporting that Bank of America will no longer require that consumer disputes involving credit cards, among other matters, be resolved by arbitration.
Andrew Serwin on Privacy Litigation
Posted on August 12, 2009Andrew B. Serwin of Foley & Lardner LLP has written Poised on the Precipice: A Critical Examination of Privacy Litigation. Here's the abstract: A collection of factors has caused the United States to be poised on the precipice of a...
Times Story on Medical Information Privacy
Posted on August 09, 2009Today's Times has an article, And You Thought a Prescription Was Private, about the sale of information about patients' use of prescriptions. The article also reports about how February's stimulus bill prohibits the sale of much personal health information...
Debtor's Prison in Indiana
Posted on August 07, 2009Apparently in the southern counties of Indiana, judges are not in sympathy with our state constitution's ban on imprisonment for debt, which dates back to 1851. Judgment debtors whose sole income is exempt Social Security, and whose assets fall below...
Jeff Gelles Column on How Deregulation Both Helps and Hurts Consumers in Calling Overseas
Posted on August 07, 2009Here.
Illinois sues Wells Fargo for Discrimination
Posted on August 06, 2009Illinois Attorney General Lisa Madigan filed a Complaint on July 31 alle ging that Wells Fargo violated state fair lending and consumer protection laws in its mortgage operations. The 62-page complaint elaborates in great detail the compensation systems that induced...
The Tug of War Over Who Will Protect Consumers Continues . . .
Posted on August 06, 2009by Jeff Sovern The Times has another article today about the tug of war between existing federal regulators and the Obama administration over the desirability of establishing a new Consumer Financial Protection Agency or allowing the existing agencies to keep...
FTC Seeks to Protect on On-Line Privacy
Posted on August 05, 2009Ed Mierzwinski over at U.S. PIRG's Consumer Blog has this nice post concerning today's New York Times story on the FTC's efforts to combat commercial monitoring of consumers' on-line behavior.
More on Cash for Clunkers
Posted on August 05, 2009Here's another critique of the CARS program by Derek Thompson at theatlantic.com.
HAMP: Is It Helping?
Posted on August 04, 2009By Alan White Today the Administration released its first report on the number of homeowners helped by its Home Affordable mortgage modification program (HAMP). While the numbers of trial modifications in the first three months of the program (250,000) may...
The Fed's Failure to Act and the Proposed CFPA
Posted on August 01, 2009by Jeff Sovern Opponents of a new Consumer Financial Protection Agency sometimes argue that the power to be given to the proposed CFPAs can be exercised by existing agencies, and so it's not necessary to create a new agency. But,...
Statutory Compilation To Be Out for Fall Classes
Posted on July 31, 2009by Jeff Sovern The 2009 edition of our Selected Consumer Statutes should be out in time for fall classes. It's the most up-to-date statutory collection available for use in a consumer protection course or for practicing attorneys. The 2009 edition...
The House Votes for an Additional $2 Billion for Cash for Clunkers Program, But Is that Sensible?
Posted on July 31, 2009The House of Representatives just voted another $2 billion for the cash-for-clunkers (CARS) program that we've been covering extensively on this blog. On to the Senate, where some press reports suggest that passage may be more difficult. Meanwhile, Public Citizen's...
Menu Labeling--From a New York City Experiment to Part of the Health Care Reform Bill
Posted on July 30, 2009by Deepak Gupta In today's mail, I received my copy of the August issue of ABA Journal magazine, which has an article on the mandatory disclosure of calorie counts on fast-food menus. We've blogged several times here about the legal...
Posner v. Thaler on Behavioral Economics and the CFPA
Posted on July 30, 2009by Deepak Gupta Although his views on economic regulation and the conservative movement seem to have evolved over the years, and aren't always easy to pin down, Richard Posner is at bottom a proponent of old-style neoclassical economics premised on...
ABA Panel on Arbitration's Future
Posted on July 30, 2009I'll be speaking on a panel about arbitration (including recent developments in Congress and the courts) at the ABA's annual meeting in Chicago tomorrow. If you're at the meeting, I hope you'll be able to stop by. It's called "Arbitration:...
Is the Cash for Clunkers Program Being Suspended Right After It Began?
Posted on July 30, 2009We reported here, here, and here about concerns with the CARS program, under which consumers can get credits for up to $4500 toward the purchase of new, more fuel-efficient vehicles when they scrap their older gas guzzlers. Regulations for the...
Philadelphia Inquirer Coverage of Consumer Protection Issues
Posted on July 30, 2009I'm delighted to report that the Philadelphia Inquirer's Jeff Gelles is now covering consumer protection issues regularly. He's already published an interview with Elizabeth Warren on the proposed Consumer Financial Protection Agency and a column on Chase's increase of the...
Elizabeth Warren on Why We Need a Consumer Financial Protection Agency
Posted on July 29, 2009This has been making the rounds, but we somehow neglected to post it here. Professor Warren also recently identified three myths perpetuated by critics of the new agency, along with her responses. The most complete account of Warren's argument can...
Music File Sharing Case Goes to Trial in Boston
Posted on July 29, 2009by Brian Wolfman We have previously reported here about the recording industry's aggressive strategy of going after music file sharers. Most of the time, the file sharers settle for a few thousand dollars, rather than go to trial and risk...
Health Care Legislation Near a Deal in the Senate?
Posted on July 28, 2009This AP story explains that the Senate is close to a bi-partisan deal on health care legislation. Under the deal, there would be no so-called "public option," that is, no governmental plan competing with private insurance companies. The New York...
Obama Administration Divided on the Consumer Financial Services Agency
Posted on July 27, 2009You knew that the proposal to establish a Consumer Financial Services Agency was backed by the Obama Administration. After all, it's the Administration's bill. You also knew (or at least suspected) that the banking and other industries would be lobbying...
NY Attorney General Cuomo Sues to Vacate 100,000 Debt Collection Judgments
Posted on July 24, 2009The AG claims that the defendants were never served, and so defaulted, whereupon money was seized from bank accounts and wages garnished. The Times report is here. The complaint lists 35 lawyers and law firms as defendants. The amount collected...
More on CARS Regulations
Posted on July 24, 2009Okay, so we've told you about skepticism over the new CARS get-the-clunkers-off-the-road legislation, and we've posted the National Highway Traffic Safety Administration's brand-spanking-new CARS regs. And, now, here is a press statement by Public Citizen auto safety/fuel efficiency expert Lena...
NHTSA Releases Final CARS Regulations
Posted on July 24, 2009On Tuesday, this post considered the value of the Consumer Assistance to Recycle and Save Act of 2009, or CARS, the stated purpose of which is provide cash incentives for consumers to remove gas-guzzlers from the road and replace them...
More on Consumer Arbitration at the NAF
Posted on July 24, 2009We posted earlier this week on the decisions of the National Arbitration Forum and the AAA to get out of the consumer arbitration business. Here's a report issued last Tuesday by the majority staff of the Domestic Policy Subcommittee of...
More on NAF, AAA, and Forced Arbitration
Posted on July 23, 2009by Deepak Gupta Yesterday, during NPR's All Things Considered, reporter Wade Goodwyn and host Madeleine Brand discussed the recent developments involving NAF and AAA, as well as the Arbitration Fairness Act. Goodwyn also filed another story this morning including excerpts...
Denny's: Public Health Enemy # 1
Posted on July 23, 2009by Steve Gardner The Center for Science in the Public Interest filed suit today in the Superior Court of New Jersey in Middlesex County, seeking to compel Denny's to disclose on menus the amount of sodium in each of its...
Fed Proposes "Significant Changes" to Reg Z Provisions on Closed-End Mortgages and HELOCs
Posted on July 23, 2009Here's the press release: The Federal Reserve Board on Thursday proposed significant changes to Regulation Z (Truth in Lending) intended to improve the disclosures consumers receive in connection with closed-end mortgages and home-equity lines of credit (HELOCs)...
Senator Specter Introduces Bill to Overrule Twombly & Iqbal
Posted on July 23, 2009by Brian Wolfman Senator Arlen Specter has just introduced this bill to reestablish the notice-pleading standards of Federal Rule of Civil Procedure Rule 8 as interpreted by the Supreme Court in Conley v. Gibson, 355 U.S. 41 (1957). As plaintiffs'...
NPR on the Shakeup in Consumer Arbitration
Posted on July 22, 2009Amy Scott of Marketplace had a very brief report this morning on the NAF and AAA pullout from forced arbitration of consumer debt disputes. For a more detailed report on forced arbitration, see this story from a few weeks back...
More on Why Barney Frank Has Postponed Consumer Financial Protection Agency Bill
Posted on July 22, 2009We reported yesterday that Rep. Barney Frank has delayed for a couple months his committee's consideration of the legislation that would authorize the Consumer Financial Protection Agency. To learn more about the reasons for the postponement go here, here, here,...
House Oversight Committee Looks Into Forced Arbitration
Posted on July 21, 2009The Domestic Policy Subcommittee of the House Oversight and Government Reform Committee will hold a hearing tomorrow afternoon entitled "Arbitration or ?Arbitrary?: The Misuse of Arbitration to Collect Consumer Debts." The witnesses are Minnesota Attorney General Lori Swanson, Michael Kelly...
Is CARS a Good Idea?
Posted on July 21, 2009The Consumer Assistance to Recycle and Save Act of 2009 (CARS) is meant to encourage people to trade in their gas guzzlers and buy new "fuel efficient" cars. You trade in the gas guzzler and the federal government funds a...
AAA Joins NAF in Quitting Arbitration of Consumer Debt Disputes
Posted on July 21, 2009by Deepak Gupta The Wall Street Journal is reporting that the American Arbitration Association "will stop participating in consumer-debt-collection disputes," at least--according to an unnamed AAA official quoted in the story--"until some standards or safeguards are established...
Big Delay on Consumer Financial Protection Agency
Posted on July 21, 2009As reported by U.S. PIRG's Consumer Blog, Rep. Barney Frank, Chair of the House Financial Services Committee, has announced that his committee's consideration of legislation establishing a Consumer Financial Protection Agency has been delayed from next week until September.
The Obama's Administration Consumer Financial Protection Agency Bill and Abusive Practices
Posted on July 20, 2009by Jeff Sovern Subtitle C of the Obama administration's bill to create a Consumer Financial Protection Agency would give the CFPA the power to promulgate rules "identifying as unlawful unfair, deceptive, or abusive acts or practices in connection with any...
Check out Wal-Mart Watch
Posted on July 20, 2009If you're interested in all things Wal-Mart, check out Wal-Mart Watch, a (largely) critical website devoted to discussion of the world's largest retailer. There's an emphasis on efforts to improve wages and benefits for Wal-Mart workers. Today's top story is...
Consent Decree in Minnesota v. NAF
Posted on July 20, 2009Here's the consent decree that Richard mentions in the post below. And here's the text of the press release from the Minnesota Attorney General's office: Minnesota Attorney General Lori Swanson and the National Arbitration Forum?the country?s largest administrator of credit...
Senator Saxby Lifts "Hold" on Cass Sunstein for OIRA Position
Posted on July 20, 2009Quite a while back, President Obama nominated Cass Sunstein, a famous law professor, to head the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget. In the past, OIRA has had a lot of power...
NAF Exits Consumer Arbitrations.
Posted on July 19, 2009In a major victory for consumers, the nation?s largest arbitration firm involved in adjudicating delinquent credit-card debt has agreed to pull out of the business. As reported by BusinessWeek, the move was announced today by Minnesota Attorney General Lori Swanson,...
John Infranca on Protecting Exempt Social Security Payments from Freezes and Garnishment
Posted on July 18, 2009John Infranca of NYU has written Safer than the Mattress? Protecting Social Security Benefits from Bank Freezes and Garnishments, 83 St. Johnb's Law Review (2009). Here's the abstract: This Article analyzes the tensions between the anti-assignment provision of the Social...
Australia limits all bank fees
Posted on July 17, 2009by Richard Alderman I just finished teaching a course on American Consumer Law at Latrobe University in Australia. Part of the fun of teaching in another country is comparing consumer issues. One common problem is unreasonably high bank and credit...
Elizabeth Warren on the Consumer Financial Protection Agency
Posted on July 17, 2009In this Business Week column, Prof. Elizabeth Warren lays out why she thinks Congress ought to establish a Consumer Financial Protection Agency. She stresses the need for simple disclosures regarding financial products. She says in that regard that "[m]illions of...
California Sues Loan Modification Companies
Posted on July 16, 2009by Brian Wolfman I blogged here on Monday about the National Consumer Law Center's recent report on the growing loan modification scam industry. Yesterday, the California Attorney General sued 21 individuals and 14 loan modification companies, alleging that they take...
A Few Comments on the Fed's Interim Final Rule on Credit Cards
Posted on July 16, 2009by Jeff Sovern Or is it the Final Interim Rule? Yesterday I linked to the Fed's new Interim Final Rule, amending Reg Z to implement provisions of the Credit CARD Act that take effect in August. The new Rule itself...
More on Efforts to Reform Pay-for-Delay Drug Settlements
Posted on July 16, 2009by Brian Wolfman Last month, I blogged here about FTC Chair Jon Leibowitz's call to eliminate or narrow "pay-for-delay" drug settlements. In pay-for-delay settlements, a brand-name drug company pays a generic company that has challenged the brand-name company's patent to...
Wal-Mart Says It Plans to Rate Products' Environmental Impact
Posted on July 15, 2009by Brian Wolfman Read this New York Times article about Wal-Mart's plans to rate the environmental impact -- that is, the "greenness" -- of consumer products and business methods. Is this for real? It's a huge job and wildly complex....
Fed Issues Interim Final Rule Implementing Credit CARD Act
Posted on July 15, 2009by Jeff Sovern The Fed announced today that it is issuing an Interim Final Rule implementing provisions of the Credit CARD Act that take effect in August. The announcement states that the provisions "primarily pertain to advance notices of rate...
Minnesota Attorney General Sues National Arbitration Forum
Posted on July 14, 2009by Deepak Gupta The Minnesota Attorney General today filed a major lawsuit against the Minnesota-based National Arbitration Forum (NAF), one of the nation's largest and most controversial arbitral forums. NAF is already defending itself against another lawsuit by the City...
Bob Herbert on the Proposed Consumer Financial Product Agency
Posted on July 14, 2009Bob Herbert in the Times has an interesting take on the proposed Consumer Financial Product Agency in his column in today's Times, Chutzpah on Steroids. The whole column is worth reading, but here's a sample: There is nothing free or...
Lifestyle Lift Slammed for Phony Fan Sites Purporting to Be From Satisfied Consumers
Posted on July 14, 2009by Paul Alan Levy Last December, I blogged about deceptive practices used by Lifestyle Lift to mislead consumers using Google?s search to come to supposed complaint sites that were actually its own sites praising its services, and to create sites...
Bloggers and Product Endorsement
Posted on July 13, 2009by Brian Wolfman Check out this article in yesterday's New York Times about bloggers who receive free products from companies and then blog about them if (they say) they like the products but are silent about them if they don't...
Live Webcast of Sotomayor Senate Confirmation Hearing
Posted on July 13, 2009In less than a half hour, the Senate Judiciary Committee will begin its live webcast of the confirmation hearings for Judge Sotomayor. The same webpage provides the witness list. The majority and minority will be calling roughly the same number...
NCLC Issues Report on Loan Modification Scams
Posted on July 13, 2009by Brian Wolfman On Friday, the National Consumer Law Center issued this report on loan modification scams. The beginning of the report's executive summary describes the problem: As the number of foreclosures continues to grow, a new ?industry? has emerged...
InfomercialScams.com is no more ? a sad end for a useful consumer web site
Posted on July 10, 2009I have been receiving inquiries about the apparent disappearance of two consumer commentary web sites operated by Justin Leonard, whose rights I (and other colleagues at Public Citizen) have defended in the past ? www.infomercialscams.com and www.infomercialratings...
Medical Bankruptcy and Health Care Reform
Posted on July 10, 2009by Brian Wolfman Several years ago, David Himmelstein, Elizabeth Warren, Deborah Thorne, and Steffie Woolhandler wrote a piece indicating that a large percentage of U.S. bankruptcy filings are prompted by medical debt. They argued for universal health care coverage, and...
Lots of Stuff Posted Online Regarding Judge Sotomayor
Posted on July 10, 2009by Brian Wolfman We've previously posted here and here about Judge Sotomayor's record in consumer and so-called business cases. A large amount of information on Judge Sotomayor has just been posted on the web, and I thought our readers might...
Barney Frank Introduces CFPA Bill
Posted on July 09, 2009by Deepak Gupta House Financial Services Committee Chairman Barney Frank has formally introduced President Obama's plan for a Consumer Financial Protection Agency (CFPA). The bill adopts the Administration's proposal with a few limited exceptions. Unlike the Administration's draft, the bill...
June 2009 NHTSA Recalls
Posted on July 08, 2009Go here for the June 2009 vehicle and associated product recalls issued by the National Highway Traffic Safety Administration.
FTC Testifies on Proposed Consumer Financial Protection Agency
Posted on July 08, 2009The Federal Trade Commission today told the U.S. House Subcommittee on Commerce, Trade, and Consumer Protection that the FTC will continue to vigorously enforce consumer protection laws as Congress considers the Administration?s proposal to protect consumers of financial services, including...
Public Citizen Releases Statistical Survey of Public Interest Cases in the Latest Supreme Court Term
Posted on July 08, 2009The Supreme Court's October 2008 Term ended June 29th, when the Court released the final opinions of the Term. In an attempt to quantify the Court's decisions, Public Citizen's Supreme Court Assistance Project has gone beyond its usual Watch List...
Public Citizen Litigation Group Gets a New Director
Posted on July 08, 2009On July 1, 2009, Allison Zieve became the new director of Public Citizen Litigation Group. Allison replaces Brian Wolfman, who had been with the group for nineteen years, five of them as its director. Brian moves on to the faculty...
Today's House Hearing on the CFPA
Posted on July 08, 2009You can access here the written testimony from today's House subcommittee hearing on the proposed Consumer Financial Protection Agency -- including that of Assistant Treasury Secretary Michael Barr, and of Gail Hillebrand on behalf of national consumer groups -- as...
What Happens When Disclosures Contradict What Consumers Believe?
Posted on July 07, 2009by Jeff Sovern I recently came across a study by Macro International conducted for the Federal Reserve Board in 2008 titled Consumer Testing of Mortgage Broker Disclosures that sheds some light on that question. Macro had consumers read disclosures stating...
Massachusetts Supreme Court Stikes Class Action Ban, Rejects Texas Law
Posted on July 07, 2009by Deepak Gupta Just before the holiday weekend, the Massachusetts Supreme Judicial Court issued an opinion in Feeney v. Dell, Inc., holding that a statutory right to participate in class action lawsuits may not be be foreclosed by a provision...
The Credit CARD Act and Penalty Fees
Posted on July 06, 2009by Jeff Sovern One of the many interesting provisions of the Credit CARD Act that has not received much attention is the limits it imposes on penalty fees. At present, such fees are set through contract, subject only to unconscionability...
Consumer Law & Policy Roundup
Posted on July 02, 2009by Deepak Gupta So much is happening so quickly in the world of consumer law and policy right now that it's hard to keep up, let alone blog about it in our spare time. In this post, I'm taking advantage...
Harvest From the Times: Bank Fees and Debt Derails Legal Career
Posted on July 02, 2009by Jeff Sovern Some interesting articles in the New York Times today: One article, Bank Fees Rise as Lenders Try to Offset Losses, may shed some light on the claim that banks are raising credit card fees in response to...
Credit Card Issuers Raise Minimum Payments: Is it Because of the Credit CARD Act?
Posted on July 01, 2009Arthur Delaney of the Huffington Post has the story.
Fallout From Credit CARD Act?
Posted on June 30, 2009by Jeff Sovern This morning, the Pittsburgh Post-Gazette published the following essay I had written: Private Sector Commentary: New credit card law has teeth Tuesday, June 30, 2009 By Jeff Sovern The credit card legislation President Obama signed into law...
White House Proposal Includes Authority to Ban Forced Arbitration
Posted on June 30, 2009by Deepak Gupta Included in President Obama's proposed Consumer Financial Protection Agency Act of 2009 is the following provision giving the new agency the authority to ban pre-dispute mandatory binding arbitration clauses: SEC. 1025. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION...
White House Sends Consumer Financial Protection Bill to Capitol Hill
Posted on June 30, 2009by Deepak Gupta Today, President Obama sent a bill to Capitol Hill that would create a Consumer Financial Protection Agency. You can read the text of the proposed Consumer Financial Protection Agency Act of 2009 here. The package also includes...
California's 17200: Have rumors of its death been greatly understated?
Posted on June 30, 2009by Stephen Gardner Yesterday, the California Supreme Court issued an opinion, Arias v. Superior Court, that seems to have gutted any hopes of a representative action under California Business & Professions Code § 17200, holding: [W]e construe the statement in...
Cuomo Case Great News for State Attorneys General
Posted on June 29, 2009The Supreme Court has issued an opinion striking down the federal banking regulatory preemption of state fair lending enforcement lawsuits. The Court confronted whether ambiguity in the National Bank Act left the Office of the Comptroller of the Currency free...
Should section 230 be broadened to the traditional media?
Posted on June 29, 2009General Motors? retreat from its effort to use bankruptcy proceedings to shed tort liability represents a great victory for consumers. But the Washington Post reported that, in the course of the consumer campaign to achieve that result, which was pursued...
GM Bankruptcy Sale Agreement Amended to Cover Product Liability Claims
Posted on June 28, 2009A number of news sources are reporting that the GM bankruptcy sale agreement has been amended to assure that the new company emerging from bankruptcy will be liable for product liability claims. As the New York Times story puts it:...
Read the GM Bankruptcy Objection Filed by Consumer Groups
Posted on June 28, 2009Earlier today, we posted materials concerning the amendments to the GM bankruptcy sale that will save future product liability and lemon law claims. That post neglected to say that these amendments largely redress objections in the bankruptcy case made by...
NHTSA Recalls for May 2009
Posted on June 27, 2009Check out the the auto safety recalls from the National Highway Traffic Safety Administration for May 2009.
The Role of Predatory Lending in the Collapse of Detroit
Posted on June 26, 2009by Laura MacCleery After listening to a stirring speech by Professor Elizabeth Warren of the Senate Congressional Oversight Committee on the bailout last Saturday at the American Constitution Society convention, I was struck by the many similarities between credit card...
House Financial Services Committee Holds Hearing on New Consumer Financial Protection Agency
Posted on June 25, 2009The Financial Services Committee of the U.S. House of Representatives held a hearing regarding the establishment of a new Consumer Financial Protection Agency. Go here to see a webcast of the hearing and the written testimony of a range of...
Ninth Circuit Cleans Up Its Own Section 230 Mess ? Motions to Dismiss Are Allowed Again
Posted on June 25, 2009The Ninth Circuit has retracted some of the dangerous dictum in its recent decision in Barnes v. Yahoo!, discussed in this blog last month here and here. The panel opinion had asserted ? in dictum which, under Ninth Circuit procedure,...
Peanut Butter and the Proposed Consumer Financial Protection Agency
Posted on June 24, 2009by Jeff Sovern Once upon a time, in a not-so-distant country, peanut butter sales were regulated in a distinctive way. Grocery stores that sold peanut butter were regulated by one agency; supermarkets by another agency; and convenience stores that sold...
Judge Sotomayor's Record in Business and Consumer Cases
Posted on June 24, 2009by Deepak Gupta The Alliance for Justice has issued a report on Judge Sonia Sotomayor's record in business and consumer cases. It covers several topics several likely to be of interest to this blog's readers, including arbitration, deceptive and unfair...
FTC Chair Jon Leibowitz Calls for Ban on "Pay-for-Delay" Drug Settlements
Posted on June 24, 2009In a speech yesterday, FTC Chair Jon Leibowitz explained that a study done by his agency shows that ending so-called ?pay-for-delay? settlements between brand-name and generic drug companies would save consumers $3.5 billion a year. He called for Congress to...
Foreclosure Crisis Growing?
Posted on June 24, 2009This article in today's Washington Post explains that mortgages on about 1 million U.S. homes are seriously delinquent, meaning that the home foreclosure crisis is likely to get worse before it gets better.
CPSC Recalls for June 2009
Posted on June 24, 2009Check out the Consumer Product Safety Commission's product safety recalls for June 2009.
Reg Z Amendments Change Timing of Mortgage Disclosures
Posted on June 23, 2009by Jeff Sovern Critics of Truth in Lending have long complained about the timing of disclosures in mortgage loans: typically, lenders were not required to provide the final loan disclosures until the closing. That meant that if the interest rate,...
More on the Proposal for the Consumer Financial Protection Agency
Posted on June 20, 2009by Jeff Sovern The White House proposal can be found here. Ed Mierzwinski has collected many valuable links on the proposal over at the U.S. PIRG Consumer Blog. A couple of random comments: the only statute referred to by name...
FTC Seeking Public Comments for Studies on Consumer Susceptibility to Fraud
Posted on June 19, 2009Here's an excerpt from one announcement: The FTC intends to conduct two exploratory studies on consumer susceptibility to fraudulent and deceptive marketing. This research will be conducted to further the FTC?s mission of protecting consumers from unfair and deceptive marketing...
Jonathan Zinman on What Borrowers Do When States Limit Payday Loans
Posted on June 17, 2009Jonathan Zinman of Dartmouth has written Restricting Consumer Credit Access: Household Survey Evidence on Effects Around the Oregon Rate Cap. Here's the abstract: Many policymakers and some behavioral models hold that restricting access to expensive credit helps consumers by preventing...
Supreme Court Takes Arbitration Case
Posted on June 16, 2009The Supreme Court yesterday granted cert in Stolt-Nielsen S.A. v. AnimalFeeds International, which raises the question, according to the SCOTUS Blog, of "when two companies agree to send their disputes to arbitration, may a court order that process to go...
Obama Reported to Want New Consumer Financial Protection Agency
Posted on June 16, 2009Bloomberg News is reporting that tomorrow President Obama will propose creation of the Consumer Financial Protection Agency "to protect consumers of financial products with the power to punish offending firms and stripping the Federal Reserve of some of its powers...
Has the FDIC Kept Savers' Returns Down?
Posted on June 15, 2009On Saturday, Ron Lieber's "Your Money" column in the Times, headlined F.D.I.C.is Watching as a Bank Sets Rates, raised interesting consumer law issues. Ally Bank is an online bank owned by GMAC Financial, a recipient of federal bailout funds. Ally...
Obama Administration Takes Position in Fair Credit Reporting Act Preemption Case Before Supreme Court
Posted on June 13, 2009U.S. PIRG's Consumer Blog has this excellent post on a petition pending before the U.S. Supreme Court. The petition in American Bankers Association v. Brown, No. 08-730, asks whether a California financial privacy law is preempted by the federal Fair...
Sergio Pareja on FTC Regulation of Pyramid Marketing Schemes
Posted on June 12, 2009Sergio Pareja of New Mexico has written Sales Gone Wild: Will the FTC's Business Opportunity Rule Put an End to Pyramid Marketing Schemes? 39 McGeorge Law Review. Here's the abstract: This article analyzes the anticipated effect of the FTC's Business...
Chrysler's Bankruptcy and Product Liability Suits
Posted on June 11, 2009Fellow consumer law professor Norman Silber of Hofstra is quoted in a TV news report here about how Chrysler's bankruptcy will bar future product liability plaintiffs from obtaining compensation from Chrysler.
A Bit More About Steering
Posted on June 11, 2009Yesterday I posted excerpts from an affidavit claiming that Wells Fargo steered lenders who could have had prime loans to more expensive subprime loans. In markets that work properly, steering wouldn't be effective. If, for example, you walked into a...
Wells Fargo and Steering
Posted on June 10, 2009Commentators have complained for some time that some lenders steered borrowers who could have qualified for prime loans to more expensive subprime loans. Unsophisticated borrowers who don't shop around for loans or don't realize what their loans actually cost them...
William McGeveran on Social Marketing
Posted on June 09, 2009William McGeveran of Minnesota has written Disclosure, Endorsement, and Identity in Social Marketing, University of Illinois Law Review (2009). Here's the abstract "Social marketing" is among the newest advertising trends now emerging on the internet...
Table of Contents for Summer 2009 Issue of Journal of Consumer Affairs: Special Issue on Consumer's Health Literacy
Posted on June 05, 2009Here is the table of contents for the Journal of Consumer Affairs, Summer 2009, Volume 43, Number 2 Special Issue on Consumer?s Health Literacy: Editorial Prelude: On Break-up Clichés Guiding Health Literacy?s Future by Paula Fitzgerald Bone, Karen Russo France...
Reminder from China about the importance of Section 230 immunity
Posted on June 04, 2009Discussion on a panel about the role of the Internet in social change in China, held at Computers Freedom and Privacy 2009 today, which is the 20th anniversary of the Tiananmen massacre, provided a stark reminder today of the crucial...
More on Marketing Credit Cards to People Under 21
Posted on May 31, 2009by Brian Wolfman I blogged here about the new credit card law's provisions aimed at curbing the credit card industry's aggressive marketing practices toward college students and people under age 21. In today's Washington Post, Michelle Singeltary has this column...
What Will Happen to the December 2008 Amendments to Regulation Z?
Posted on May 31, 2009by Jeff Sovern Last December, various federal regulators adopted new credit card regulations (we blogged about them here, among other places). Some aspects of the new Credit CARD Act (discussed here. as well as other places in the blog), such...
More on the Proposed Financial Product Safety Commission
Posted on May 30, 2009On Wednesday, the US PIRG Consumer Blog had this post linking to a USA Today editorial supporting a Financial Product Safety Commission. It also links to an opposing point of view from the American Bankers Association.
Judge Sotomayor and Consumer Protection
Posted on May 29, 2009Norm Silber of Hofstra was kind enough to send me a list of Supreme Court nominee Sonia Sotomayor's consumer protection opinions. They are: CARRIER v. CITIBANK (SOUTH DAKOTA), N.A., 180 Fed. Appx. 296; 2006 U.S. App. LEXIS 12447 (2d Cir....
$275,000 Sanctions in Mortgage Shell Game
Posted on May 27, 2009A Massachusetts federal court has affirmed the imposition of $275,000 in penalties against Ameriquest Mortgage and its lawyers for misrepresenting the ownership of a mortgage in bankruptcy court filings. Ameriquest originated the mortgage, then assigned it to a securitization trust...
New Credit Card Bill and People Under 21
Posted on May 25, 2009by Brian Wolfman Sections 301 to 305 of the new credit card legislation are aimed at curbing the credit card industry's very aggressive marketing practices toward college students and people under age 21. It is too early to say whether...
Will There Be Any Negative Consequences of the New Credit Card Legislation?
Posted on May 24, 2009by Brian Wolfman The new credit card legislation will eliminate certain credit card practices (such as double-cycle billing, unlimited marketing to minors, and very short-lived introductory teaser interest rates). It will, by definition, benefit consumers who would otherwise be harmed...
Obama Administration Reverses Bush Administration Policy on Regulatory Preemption
Posted on May 23, 2009The Obama administration last Wednesday reversed the Bush policy on federal preemption of state law, particularly product liability law. The Obama administration's memorandum announcing the new policy does three things: First, it states that agencies should not include in regulatory...
Barnes v. Yahoo!: Raising the Section 230 Immunity Defense on a Motion to Dismiss
Posted on May 22, 2009Several days ago, I posted about a Ninth Circuit decision, Barnes v. Yahoo!, holding that an alleged promise by a Yahoo! employee to remove false profiles of the plaintiff, posted by her ex-boyfriend, could be enforced against Yahoo! notwithstanding the...
Obama Administration Considering New Financial Consumer Protection Agency
Posted on May 22, 2009The Times has the story here.
Washington Post: Credit Card Reform Legislation Not Really Needed
Posted on May 21, 2009Today's Washington Post has this editorial claiming that although the credit card reform legislation on its way to enactment is good in substance it is largely unnecessary because, the Post asserts, it mainly apes new Federal Reserve Board rules. The...
David Schmudde on the Subprime Crisis
Posted on May 21, 2009David Schmudde of Fordham University has written Responding to the Subprime Mess: The New Regulatory Landscape. Here's the abstract: An era of unregulated financial markets has resulted in a global financial disaster the likes of which has never before been...
Congress Sends Credit Card Bill to President
Posted on May 20, 2009The Times has the story here. I'm sure that in the days to come we'll see blog coverage of the bill, and of course there's already been quite a bit of news and blog coverage. Here's one thought: one apparent...
Plaintiffs Win Important Consumer Protection Case in California Supreme Court
Posted on May 18, 2009by Brian Wolfman The California Supreme Court today decided In re Tobacco II, an important case under California's Unfair Competition Law (UCL), Cal. Bus. & Prof. Code 17200 et seq. Early in the opinion, the Court described the issues in...
Times Sunday Magazine Money Issue
Posted on May 18, 2009Yesterday's Sunday Times Magazine was devoted to money. The entire issue was worth reading, but two articles in particular were striking. One, written by Times economics reporter Edmund Andrews and titled My Personal Credit Crisis, was excerpted from his forthcoming...
Are SEC Employees Trading on the Agency's Inside Information or Otherwise Abusing Their Power?
Posted on May 17, 2009This front page story in today's Washington Post concerns a report on the alleged conduct of employees of the Securities and Exchange Commission. Here's a brief excerpt to give you a sense of the story: A Securities and Exchange Commission...
Article on Supreme Court's Decision in Wyeth v. Levine
Posted on May 16, 2009Check out this new article on the Supreme Court's recent decision in Wyeth v. Levine. It describes the Court's decision in detail and discusses its implications for future litigation. Wyeth held that FDA approval of a prescription drug and its...
Consumer Law Wedding Toast
Posted on May 15, 2009by Jeff Sovern Recently I was asked to speak briefly at an upcoming wedding but was admonished not to mention consumer law. So that made me wonder: what would a consumer law wedding toast look like? My effort follows: The...
Judge Posner Blames Himself, Among Others, for Economic Crisis
Posted on May 15, 2009This article explains that champion of deregulation Judge Richard Posner blames himself, among others such as Alan Greenspan, for the current economic crisis. He says that although deregulation is good for virtually every sector of the economy, he failed to...
Comments in Times on Cuomo Case
Posted on May 14, 2009by Jeff Sovern Back on April 27, the Times published an editorial titled When Banks Discriminate about Cuomo v. The Clearinghouse Association, the pending Supreme Court case addressing whether state officials can investigate discriminatory lending by national banks, or whether...
American Banker Piece on Truth in Lending
Posted on May 13, 2009by Jeff Sovern The American Banker ran a piece I wrote in their Viewpoints section today titled "Borrowers Must Understand Their Obligations" (the American Banker's content is available only to subscribers but they offer a free two-week trial subscription if...
More on the Credit Card Bill Before the U.S. Senate
Posted on May 13, 2009The National Consumer Law Center has just issued this fact sheet explaining why the credit card reform bill currently being debated in the U.S. Senate is needed to protect consumers from retroactive rate hikes, which would not be regulated under...
April 2009 Product Recall Information
Posted on May 13, 2009April 2009 vehicle recalls conducted by the National Highway Traffic Safety Administration are here, and product safety recalls by the Consumer Product Safety Commission are here.
ABA Antitrust Section's Consumer Protection Conference
Posted on May 12, 2009The ABA's Section on Antitrust Law has scheduled its Consumer Protection Conference for June 18-19 in Washington,D.C. Here's an excerpt from the announcement: The conference will open with remarks by David Vladeck, in his first public appearance as the Director...
Consumers Union on the Credit Card Bill in the U.S. Senate
Posted on May 12, 2009To learn about the credit card reform legislation in the U.S. Senate, go to this nice post by Consumers Union.
Duties to absent class members--maybe not so much, says NY's highest court
Posted on May 11, 2009The New York Court of Appeals (top NY court) issued an opinion last week, discussing the effort by a class member to discover internal documents of class counsel, for use in a subsequent class action against class counsel. Wyly had...
Texas Legislature Considers Ban on Transfats in Restaurant Foods
Posted on May 09, 2009State and local governments have been take the legislative lead in the fight against obesity and its pernicious health consequences. We've reported, for instance, on New York City's ordinance requiring fast-food restaurants to disclose the calorie content of their foods...
Law students, lawyers, the economy?A silver lining for consumers?
Posted on May 08, 2009It?s clear that the ongoing economic crisis is affecting job markets in every city and every profession ? and the consequences for the legal profession and graduating 3L?s are profound and troubling. Jobs are difficult to find, offers are being...
Can a Section 230 Immunity Defense Be Raised on a Motion to Dismiss?
Posted on May 08, 2009by Paul Alan Levy Several commentators have discussed (for example, here and here) the recent decision of the Ninth Circuit in Barnes v. Yahoo!. The Ninth Circuit held that, although Section 230 of the Communications Decency Act protects Yahoo! from....
Gerardi & Willen on Subprime Mortgages, Foreclosures, and Urban Neighborhoods
Posted on May 07, 2009Kristopher Gerardi and Paul Willen, both of the Boston Fed, have written Subprime Mortgages, Foreclosures, and Urban Neighborhoods. Here's the abstract: This paper analyzes the impact of the subprime crisis on urban neighborhoods in Massachusetts. The topic is explored using...
More on Arbitration Opt-Outs and Opt-Ins
Posted on May 07, 2009by Jeff Sovern Earlier this week, my co-coordinator Deepak Gupta suggested that instead of adopting a so-called compromise providing that consumers agree to arbitration unless they affirmatively opt out, Congress should provide that litigation is the default choice, and consumers...
ABA Dispute Resolution Section Appears to Be Backing Down From Arbitration "Opt Out" Proposal
Posted on May 05, 2009by Deepak Gupta Today, the ABA's Dispute Resolution Section issued a statement suggesting that it may be backing down from its ill-advised "opt out" proposal on forced arbitration (which we've criticized on this blog here, here, and here.) The memo...
Default Rules and the Arbitration Fairness Debate
Posted on May 05, 2009by Deepak Gupta Jeff Sovern and Paul Bland have contributed thoughtful posts on a proposal being pitched as a "compromise" in the debate over arbitration fairness. It goes something like this: Instead of passing a law like the Arbitration Fairness...
House Judiciary Holds Hearing on Credit Card Industry's Use of Arbitration To Quash Consumer Claims
Posted on May 05, 2009David Arkush, the director of Public Citizen?s Congress Watch division, is testifying this morning at a hearing of the House Judiciary Committee, Subcommittee on Commercial and Administrative Law, on the need for arbitration fairness legislation. The focus of the hearing...
President Obama To Nominate New CPSC Commission Chair and Fill Another Commission Slot; Announces Intention to Increase Commission Size and Seek Greater Funding
Posted on May 05, 2009This article explains that President Obama will nominate Inez Moore Tenenbaum as the new Chair of the Consumer Product Safety Commission. If confirmed, Ms. Tenenbaum would replace Acting Chair Nancy Nord. Ms. Tenenbaum served two terms as South Carolina's Superintendent...
News Flash: Lawyer Jobs Available at Public Citizen Litigation Group
Posted on May 05, 2009For the first time in five years, Public Citizen Litigation Group is hiring staff lawyers -- two in fact. If you are interested in doing cutting-edge consumer and other public interest litigation, take a look at the job announcement. And...
Ray Brescia on the Community Reinvestment Act's Link to the Financial Crisis
Posted on May 04, 2009Ray Brescia of Albany has written Part of the Disease or Part of the Cure: The Financial Crisis and the Community Reinvestment Act, 60 University of Sourthern Carolina Law Review 617 (2009). Here's the abstract: Some commentators charge that the...
On Arbitration Fairness: Stop the ABA From Taking the Corporate Side Against Civil Rights and Consumers
Posted on May 03, 2009by Paul Bland I?ve gotten caught up in scores of e-mails and requests from angry lawyers asking "what can I do about the ABA getting hijacked?" This blog post has my answer. It?s a pretty well-recognized phenomenon that lawyers who...
More on the Credit Card Holders' Bill of Rights
Posted on May 02, 2009We reported yesterday on the House's overwhelming passage of this legislation. Read the statment of Rep. Carolyn Maloney (D - NY), the principal sponsor of the legislation. Another note: While there was substantial difference of opinion among Republicans (voting in...
Why Allowing Pre-Dispute Arbitration Opt-Out Clauses Is Not Effective Consumer Protection
Posted on May 01, 2009by Jeff Sovern One possible alternative to the Arbitration Fairness Act is an approach that permits consumers, when entering into contracts that contain pre-dispute arbitration clauses, to opt-out of arbitration before a dispute has arisen. This approach permits the illusion...
AOL Posts "Debt Collection Horror Stories"
Posted on April 30, 2009AOL has posted a collection of what they call "Debt Collection Horror Stories" which they describe as true stories involving AOL users. (Hat tip: Arlene Levitin).
House Passes Creditcard Holders' Bill of Rights
Posted on April 30, 2009Over at the U.S. PIRG Consumer Blog (one of my favorite blogs), Ed Mierzwinski is reporting that the House has passes the Creditcard Holders' Bill of Rights bill.
House Financial Services Committee Passes Mortgage Reform and Anti-Predatory Lending Billl
Posted on April 30, 2009Here's the Committee's statement: The House Financial Services Committee today approved H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act of 2009, aimed at curbing abusive and predatory lending ? a major factor in the nation?s highest home foreclosure rate...
Poll: Voters Oppose Forced Arbitration
Posted on April 29, 2009Americans widely oppose corporations using mandatory binding arbitration clauses in the fine print of consumer and employment contracts, according to national polling of likely voters conducted by Lake Research Partners and released today. The poll shows that: 6 in 10...
Today Is Arbitration Fairness Day!
Posted on April 29, 2009As we previously reported, the Fair Arbitration Now coalition is holding a press conference and lobby day in Washington, D.C. today. At the press conference (at noon today at the Senate Dirksen Office Building, Room 608), the coalition will release...
Supreme Court Hears "Enforcement Preemption" Case
Posted on April 28, 2009The Supreme Court heard oral arguments this morning in an important preemption case, Cuomo v. The Clearinghouse Association, which we've discussed here before. The question in the case is the extent to which the Office of the Comptroller of the...
ACORN Report Urges Other Communities to Adopt Philadelphia Approach to Reducing Foreclosures
Posted on April 28, 2009ACORN has released a report, Road to Rescue: How the Philadelphia Model Can Reduce Foreclosures Across the Country. Here's an excerpt from the Executive Summary: Philadelphia has pioneered an innovative and remarkably effective foreclosure prevention program that requires lenders to...
Former FDA Commissioner David Kessler is a Dumpster Diver!
Posted on April 27, 2009Check out this great Washington Post article explaining why former FDA commissioner David Kessler hangs around dumpsters at fast-food joints. Kessler was trying to figure out why many of us are junk-food addicts. Here's a teaser: The high-octane career path...
Outrage in Ohio: An Unfair Decision on Arbitration
Posted on April 26, 2009by Paul Bland and Tami Alpert (Power-Cotchett Felow, Public Justice) Something really crazy has happened in Ohio. Last summer an Ohio State Court of Appeals held that, under Ohio law, if a company claims there is an agreement to arbitrate,...
Credit Card Holders Bill of Rights
Posted on April 25, 2009Read the New York Times endorsement of the legislation.
Adam Levitin on How States Can Regulate National Bank Lending by Regulating the Secondary Market
Posted on April 24, 2009Adam Levitin of Georgetown has written Hydraulic Regulation: Regulating Credit Markets Upstream, 26 Yale Journal of Regulation (2009), the imaginative thesis of which he presented at the AALS meeting in San Diego. Here's the abstract: Consumer protection in financial services...
House Financial Services Committee Passes Credit Cardholders' Bill of Rights Act on to House
Posted on April 22, 2009The House Financial Services Committee is reporting here that it has passed the Credit Cardholders' Bill of Rights Act and reported it to the full House. UPDATE: Here's the Committee press release: The House Financial Services Committee today approved legislation...
Signs of life at the FTC
Posted on April 21, 2009Yesterday, the FTC showed significant signs of life, announcing a consent decree against the Kellogg Company for claiming that it had scientific proof that its Frosted Mini-Wheats cereal improved children's attentiveness by 20 percent (!!!). In terms of sheer gall...
Judge Richard Posner Questions the Free Market and Calls for More Financial Regulation
Posted on April 21, 2009Check this out.
New Proposed Credit Card Regulations
Posted on April 21, 2009The Fed, OTS, and NCUA today announced proposed changes to their credit card regulations. The press release is as follows: The Federal Reserve Board, the Office of Thrift Supervision, and the National Credit Union Administration today proposed clarifications to aspects...
Fair Arbitration Coalition, Website & Blog Announced
Posted on April 21, 2009A newly formed coalition is calling on Congress to stand up for employees and consumers and ensure companies are held accountable for misdeeds by passing legislation to end forced arbitration. The goal of the Fair Arbitration Now Coalition is to...
I'm a Class Member!
Posted on April 19, 2009by Jeff Sovern Sometimes consumer law strikes home. I just received a notice of a proposed settlement of a consumer class action, and I might actually be a member of the class! The defendant is Symantec, which makes the antivirus...
Do Law Students Get What They Pay for When Law Professors Blog?
Posted on April 18, 2009by Jeff Sovern The question assumes that law students pay for faculty blogging, in that the tuition they pay goes to law faculty salaries. That assumption is probably true, in that most law schools are largely tuition-driven, meaning that law...
Using the DMCA to Remove a Video Because It Is Embarrassing
Posted on April 16, 2009by Paul Alan Levy The New York Times has a story today about a video prank and its consequences for Domino's. Two employees made up a story about polluting products at Domino's pizza with mucus and such, made some short...
Skiba and Tobacman on Patterns of Borrowing, Repayment, and Default in Payday Loans
Posted on April 16, 2009Paige Marta Skiba of Vanderbilt and Jeremy Tobacman of Penn have co-authored Payday Loans, Uncertainty and Discounting: Explaining Patterns of Borrowing, Repayment, and Default. Here's the abstract: Ten million American households borrowed on payday loans in 2002...
Colbert Report on the Gutierrez "Protect Payday Lenders" Bill
Posted on April 15, 2009Earlier this year Representative Louis Gutierrez (D-IL) reversed his longstanding opposition to payday lending by sponsoring a bill that would authorize payday loans under federal law for the first time. Represntative Gutierrez is touting the bill as a crack down...
David Vladeck to Head Bureau of Consumer Protection
Posted on April 14, 2009by Deepak Gupta FTC Chairman Jon Leibowitz today announced six senior staff appointments, drawn from the private sector, the public interest community, academia, and government. Most notable (at least to us) is the appointment of former Public Citizen litigator and...
Mini-Doc on Credit Card Legislation
Posted on April 13, 2009Check out this great new Youtube mini-documentary about the ongoing fight over credit card legislation in Congress. It's by Harry Hanbury of the investigative video journalism group American News Project. Consumer advocates Ed Mierzwinski of U.S. PIRG and Travis Plunkett...
NACA Class Action Guidelines Published in Federal Rules Decisions
Posted on April 13, 2009by Brian Wolfman In 1997, the National Association of Consumer Advocates published its ground breaking "Standards and Guidelines for Litigating and Settling Class Actions." These guidelines, published at 176 F.R.D. 375 (1997), sought to support the proper use of class...
Howell E. Jackson on the Trilateral Dilemma in Financial Regulation
Posted on April 13, 2009Howell E. Jackson of Harvard has written The Trilateral Dilemma in Financial Regulation in IMPROVING THE EFFECTIVENESS OF FINANCIAL EDUCATION AND SAVINGS PROGRAM (Anna Maria Lusardi, ed., University of Chicago Press, 2008). Here's the abstract: In choosing financial products and...
Blind Readers in Fight with Amazon and Kindle Over Right to "Books on Tape"
Posted on April 12, 2009Read this terrific post over at U.S. PIRG's consumer blog, chock full of great links. Here's the first paragraph: Last week, on a chilly day, over 350 advocates for the blind and others with print disabilities held a protest in...
Where Are the Consumer Protection Columnists?
Posted on April 11, 2009by Jeff Sovern Consumer protection has been much in the news these days, but based on a quick look, there don't seem to be a lot of columnists who specialize in consumer protection. Take the New York Times, for example....
BankofAmerica signs on to Home Affordable
Posted on April 11, 2009Bank of America announced this week that it has begun refinancing mortgages at up to 105% of home values under the Fannie/Freddie Home Affordable program, part of the Administration's foreclosure relief plan. There are two main components to Home Affordable,...
More nonsense from defenders of marketplace deception
Posted on April 10, 2009Yesterday (April 9), the Wall Street Journal ran an excellent article by Nathan Koppel on the changes to food companies' practices brought about by litigation, or the threat thereof. And by "excellent," I mean that it fairly and completely gave...
Eleventh Circuit Upholds FCRA's Statutory Damages Provision Against Constitutional Challenge
Posted on April 09, 2009Today, in Harris, et al. v. Mexican Speciality Foods, et al., No. 08-13510 (11th Cir. Apr. 9, 2009), the Eleventh Circuit rejected a facial vagueness and excessiveness/due process challenge to the statutory damages provision of the Fair Credit Reporting Act...
Bill on Spam Text Messages
Posted on April 08, 2009by Jeff Sovern PC World reports here on a bill aimed at spam sent as text messages to cell phones. The article quotes from sponsoring Senator Olympia Snowe's press release: "Mobile users in the U.S received about 1.1 million spam...
February and March Foreclosure Trends
Posted on April 08, 2009By Alan White The numbers are not good for foreclosure trends in February and March. HOPE NOW's February data release shows a 12 % increase in foreclosure starts over January. Declines in October and November in new foreclosure filings were...
Oren Bar-Gill on The Law, Economics and Psychology of Subprime Mortgage Contracts
Posted on April 07, 2009Oren Bar-Gill of NYU has written The Law, Economics and Psychology of Subprime Mortgage Contracts, 94 Cornell Law Review (2009). Here's the abstract: Over 4 million subprime loans were originated in 2006, bringing the total value of outstanding subprime loans...
Report on FTC Proposed Revisions to Endorsement Guidelines and Discrimination in Housing Sales in Chicago in the Fifties
Posted on April 06, 2009One of the many nice things about teaching is that your students help you learn about your subject. One of my students, William Schleifer, brought to my attention this article in the Financial Times about the FTC's proposed revisions to...
Airline Consumer Rights Organization Negotiates Consumer-Friendly Deal With TSA
Posted on April 05, 2009See the deal here. Thanks to the US PIRG's Consumer Blog for bringing this to our attention.
American Enterprise Institute's Michael Greve on Wyeth v. Levine
Posted on April 03, 2009by Brian Woflman Writing in National Review Online, American Enterprise Institute scholar Michael Greve has explained why he thinks the Supreme Court's recent no-preemption decision in Wyeth v. Levine fundamentally misunderstands principles of federalism and is a disaster for the...
94% of All Email is Spam
Posted on April 02, 2009An online Times report, titled Spam Back to 94% of All E-Mail, is based on a report from Postini, a division of Google. So much for the federal statute, CAN-SPAM, as a spam preventative!
The Need to Protect Whistleblowers in Light of Newspaper Layoffs
Posted on April 02, 2009by Paul Alan Levy There is an interesting discussion about the impact of the Internet (and the economic downturn) on the ability of the press to conduct in-depth investigations, and hence of the need to protect whistleblowers, in today?s Fourth...
Judicial Hellholes, Debunked
Posted on April 02, 2009by Deepak Gupta Those of us who regularly read amicus briefs by the likes of the U.S. Chamber of Commerce and other self-styled tort reform groups are used to seeing references to "judicial hellholes" -- jurisdictions that supposedly embody a...
House Financial Services Committee Mark-up of Predatory Lending Bill
Posted on April 01, 2009Here's the Committee's press release: Rep. Brad Miller (D-NC), along with Rep. Mel Watt (D-NC) and House Financial Services Committee Chairman Barney Frank, today introduced H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act of 2009, aimed at curbing predatory...
Maybe Litigation Isn't Always the Best Solution for a Gripe Site Target
Posted on April 01, 2009by Paul Alan Levy Postings on this blog have often pointed out the adverse consequences that follow when a company or politician tries to use litigation, or the threat of litigation, to suppress critical online speech -- particularly consumer criticism...
Senate Banking Committee Passes Credit Card Bill
Posted on March 31, 2009Here's the Committee's Statement: Senator Chris Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, announced today that the Committee passed comprehensive legislation he authored to protect consumers from confusing, misleading and predatory practices by credit...
Ethics in Consumer Law: Reverse Logrolling
Posted on March 30, 2009Ron Burdge, an excellent consumer lawyer in Ohio, recently posted a blog piece about the ethical issue of what to do when defense counsel tries to get you to agree (usually unethically) to lay off his weasel client in the...
Paper on Predatory Mortgage Lending
Posted on March 28, 2009Philip Bond, David K. Musto, and Bilge Yilmaz, all of Penn's Finance Department, have written Predatory Mortgage Lending. Here's the abstract: Regulators express growing concern over predatory loans, which the authors take to mean loans that borrowers should decline...
Amy Schmitz on Consumer Warranty Arbitration
Posted on March 27, 2009Amy Schmitz of Colorado has written Curing Consumer Warranty Woes Through Regulated Arbitration, 23 Ohio State Journal of Dispute Resolution. Here's the abstract: This article proposes legislative procedural reforms accounting for the realities of consumer arbitration that have threatened and...
Website Collects Medical Data and Uses That Data for Drug Company Solicitations
Posted on March 26, 2009by Jeff Sovern Today's Times includes Online Age Quiz is a Window for Drug Makers, about a web site, RealAge, which tells you your "biological age" if you answer some 150 questions and offers suggestions for reducing that age. Sounds...
Does the Subprime Crisis Rebut Claims of Lending Discrimination?
Posted on March 25, 2009by Jeff Sovern The extent of discrimination in lending has long been a hotly-debated subject. The famous Boston Fed Study, publicized in 1992 and later published as Alica H. Munnell, Geoffrey M.B. Tootell, Lynn E. Browne & James McEneaney, Mortgage...
New FTC Chair Testifies Before House on Consumer Credit Issues
Posted on March 24, 2009by Deepak Gupta The House Committee on Energy and Commerce, Subcommitee on Commerce, Trade, and Consumer Protection is holding a hearing this morning on "Consumer Credit and Debt: The Role of the Federal Trade Commission in Protecting the Public." Among...
FDIC Chair Speaks Out Against Federal Preemption of Consumer Laws
Posted on March 23, 2009by Deepak Gupta FDIC chairman Sheila Bair says that, to protect consumers from aggressive lending practices, Congress should consider "curtailing" the powers of federal banking regulators to preempt state consumer protection laws. In testimony submitted to the Senate Banking Committee...
Study Finds Data Breach Laws Have Only Marginal Effect on Identity Theft
Posted on March 22, 2009Sasha Romanosky, Rahul Telang, and Alessandro Acquisti, all of Carnegie Mellon, have co-authored Do Data Breach Disclosure Laws Reduce Identity Theft? Here's the abstract: Identity theft resulted in corporate and consumer losses of $56 billion dollars in 2005, with about...
Writing With Libel in Mind
Posted on March 20, 2009Public Citizen has released a guide for bloggers and non-profit organizations about writing with libel considerations in mind. Nothing can more disable a critic of misconduct by companies or political figures than getting embroiled in a libel suit. Absent a...
Skiba and Tobacman on Whether Payday Loans Cause Bankruptcy
Posted on March 18, 2009Paige Marta Skiba of Vanderbilt and Jeremy Tobacman of Penn have co-authored Do Payday Loans Cause Bankruptcy?. Here's the abstract: An estimated ten million American households borrow on payday loans each year. Despite the prevalence of these loans, little is...
Business pursuing anti-consumer legislation in this economy?
Posted on March 17, 2009It just goes to show you: there is no time like the present. Even if the present is an economic mess caused by the lack of effective regulation and the plan is to introduce anti-consumer legislation to hamstring consumer (and,...
CNN Report on Debit Card Fees for Those Receiving Unemployment Benefits
Posted on March 16, 2009by Jeff Sovern The unemployed who receive benefits in the form of debit cards often pay fees for the privilege, according to a CNN report. An excerpt: The National Consumer Law Center says fees range from 40 cents to a...
New Jersey Appellate Court Issues First Musings On Wyeth v. Levine
Posted on March 16, 2009by Brian Wolfman In a mammoth opinion on a number of topics, the New Jersey Appellate Division, beginning at page 109, provides its take on what is required to preempt under the Supreme Court's recent drug preemption ruling in Wyeth...
Mindless Evictions
Posted on March 15, 2009By Alan White As many speakers at last week's annual meeting of the National Community Reinvestment Coalition pointed out, banks are aggravating the blighting impact of foreclosures by mindlessly evicting tenants and former owners, even in markets where homes are...
Colbert On Preemption, Brought To You By Prescott Pharmaceuticals
Posted on March 14, 2009Check out this funny (IMO) Colbert sketch on Wyeth v. Levine and other health-related news, brought to you by Prescott Pharmaceuticals. As Colbert explains, because FDA approval does not guarantee safety, Prescott guarantees the public that its drugs are not...
Phony Consumer Protection Watch: Is § 1681s-2(a) of the Fair Credit Reporting Act an Example of Phony Consumer Protection?
Posted on March 13, 2009by Jeff Sovern We blogged here about phony consumer protection statutes, statutes that are designed to create the illusion of consumer protection, perhaps so legislators can claim to consumer-constituents that they are attending to a problem, but without the reality,...
Will There Be A Financial Product Safety Commission?
Posted on March 12, 2009On Tuesday of this week, Senators Chuck Schumer and Dick Durbin introduced Senate Bill 566, which would create a new government agency, the Financial Product Safety Commission, to help consumers obtain financial products and services without being subject to predatory...
Fed Proposes New Amendments to Regulation Z
Posted on March 11, 2009The Fed's proposed regulations deal with student loans and can be found here, along with model forms. They largely implement the 2008 Higher Education Opportunity Act (HEOA), which amended Truth in Lending, and add a new subpart F to Reg...
Cuomo v. Clearing House Association: Important Preemption Case in the Supreme Court; Get Your Information Here!
Posted on March 11, 2009by Brian WolfmanAs Jeff Sovern reported in January, the Supreme Court has taken on an important case concerning the right of states to enforce their consumer protection and civil rights laws against national banks. The case is Cuomo v. Clearing...
Does Federal Law Bar Collecting Debts From the Dead?
Posted on March 10, 2009by Jeff Sovern Last week, on March 3, the Times ran a front page article, You?re Dead? That Won?t Stop the Debt Collector, about collecting debts from the families of the deceased. Here's a particularly memorable quote: ?In times of...
Hoofnagle and King on What Californians Understand About Online Privacy
Posted on March 09, 2009After co-authoring What Californians Understand about Privacy Offline, Chris Jay Hoofnagle and Jennifer King, both of Berkeley, have collaborated on What Californians Understand about Privacy Online. Here's the abstract: The volume of online commerce grows every year, in absence of...
Neuroscience and Consumer Protection
Posted on March 08, 2009by Jeff Sovern I've been listening to the audio version of Jonah Lehrer's How We Decide, which brings neuroscience to bear on the human decision-making process, and while I'm not done with it yet, I wanted to blog about some...
Foreclosure Crisis Still Getting Worse
Posted on March 07, 2009One out of 8 American homeowners is now behind in mortgage payments (either delinquent or in foreclosure) according to the Mortgage Bankers Association quarterly survey, the most reliable and longstanding source for foreclosure data. New foreclosure filings have not increased...
Sign Up With NHTSA To Get Vehicle, Tire, and Child Restraint Recall Information
Posted on March 07, 2009The National Highway Traffic Safety Administration now makes available safety recall information on vehicles, tires, and child safety restraints electronically. Go here to sign up for an email that will provide all recalls issued by NHTSA in the last seven...
House Holds Hearing on Used Cars
Posted on March 06, 2009by Deepak GuptaYesterday, the House Subcommittee on Commerce, Trade, and Consumer Protection held a hearing on ?Consumer Protection in the Used and Subprime Car Market." The hearing focused on two types of problems for consumers, especially lower-income consumers: (1) a...
Fifth Circuit Holds Manifest Disregard of the Law is Not a Valid Basis to Vacate an Aribtration Award
Posted on March 05, 2009Supreme Court Rules 6-3 That State-Law Drug Injury Claims Are Not Preempted By FDA Drug Approval
Posted on March 04, 2009Third Circuit Strikes Down Class-Action Ban, Eliminates Claimed Circuit Split
Posted on February 26, 2009by Deepak Gupta This blog has closely followed the ongoing battle over class-action bans: adhesion contract provisions that purport to strip consumers and employees of their right to pursue class actions, whether in litigation or in arbitration. Needless to say,...
FTC Releases Annual Consumer Complaint Tally, Debt-Collection Reports
Posted on February 26, 2009by Deepak Gupta The Federal Trade Commission today released its annual tally of consumer complaints. For the ninth year in a row, identity theft was the number one consumer complaint category. Of 1,223,370 complaints received in 2008, 313,982, or 26....
Facebook Dumps Binding Mandatory Arbitration
Posted on February 26, 2009by Greg Beck As noted in a prior post, Facebook has been considering revisions to its terms of use in response to widespread criticism in the blogosphere. Facebook has now posted a proposed "Statement of Rights and Responsibilities" for its...
Fed Call for Papers
Posted on February 25, 2009The Philadelphia Federal Reserve Payment Cards Center has issues a call for papers for the fifth edition of its biennial conference on Recent Developments in Consumer Credit and Payments. Here are the details: This year's conference will be held at...
California passes 90-day Foreclosure Moratorium
Posted on February 24, 2009Governor Schwarzenegger signed a bill Tuesday imposing a 90-day moratorium on foreclosures in California. The bill exempts lenders who have a modification program in place meeting standards set forth in the bill, including reduction of payments to 38% of a...
Spring 2009 Issue of Journal of Consumer Affairs Table of Contents
Posted on February 24, 2009The Spring issue of the Journal of Consumer Affairs is available here. It includes an article by Jef I. Richards titled Common Fallacies in Law-Related Consumer Research. Here's the table of contents: Editorial Prelude: Looking Forward by Looking Back State...
Libel Tourism Hits a New Low
Posted on February 23, 2009by Paul Alan LevyA currently developing situation represents a new low for ?libel tourism? ? the practice of bringing libel claims against United States defendants in foreign courts where the First Amendment and other provisions of US law that protect...
January 2009 NHTSA and CPSC Recalls
Posted on February 21, 2009National Highway Traffic Safety Administration recalls for January 2009 are here. The Consumer Product Safety Commission recalls for January 2009 are here.
Insult to Injury
Posted on February 20, 2009The AP reports on a new trend: states making deals with banks to impose fees for access to unemployment benefits.
Blockshopper Settles Jones Day?s Trademark Linking Suit ? What Are the Lessons? What Can We Do Now?
Posted on February 20, 2009by Paul Alan LevyLate last week, lawyers for Jones Day filed a stipulation of dismissal of its trademark claims against Blockshopper. The lawsuit alleged that, by providing links to lawyer bio pages on the Jones Day web site from anchor...
Standing Up to Facebook's Terms of Use
Posted on February 18, 2009How do companies get away with slipping arbitration clauses and other abusive terms into their contracts? For one thing, they rely on the fact that most people do not have the time or motivation to read all the fine print,...
Stephen Baker's The Numerati
Posted on February 18, 2009by Jeff Sovern I've been listening to the audio version of Stephen Baker's fascinating book The Numerati, and while I'm not done with it, I thought I would blog about some of what I've encountered in it thus far, as...
Obama Administration Plan to Help Borrowers Takes Shape
Posted on February 17, 2009The Times is reporting here on some aspects of President Obama's plan to help borrowers facing foreclosure. An excerpt: President Obama?s plan to reduce the flood of home foreclosures will include a mix of government inducements and new pressure on...
Second Circuit Upholds New York Fast-Food Menu Rule
Posted on February 17, 2009by Deepak Gupta I'm delighted that the Second Circuit has decided to uphold New York City?s landmark fast-food menu rule, which requires chain restaurants to disclose calorie information on their menus. (We previously blogged about the district court's decision here...
Experian-Based FICO Scores to be Unavailable to Consumers
Posted on February 16, 2009by Jeff Sovern Fair Isaac has reported that Experian has terminated their agreement under which FICO credit scores based on Experian's credit data can be made available to consumers, though consumers can still obtain their FICO scores based on TransUnion...
Marotta-Wurgler Study Finds Firms With Market Power Don't Impose One-Sided Terms on Consumers in Software License Agreements
Posted on February 15, 2009Florencia Marotta-Wurgler of NYU has written Competition and the Quality of Standard Form Contracts: The Case of Software License Agreements, 5 Journal of Empirical Legal Studies (2008). Here's the abstract: Standard form contracts are pervasive. Many legal academics believe that...
Senseless Foreclosure Story: Bernanke Home
Posted on February 14, 2009The Wall Street Journal reports today on the foreclosure sale of Chairman Bernanke's childhood home in South Carolina. The couple that lost the home, a National Guard soldier and a Wal-Mart store assistant manager, bought it with a subprime mortgage....
Moral hazard and adverse selection redux
Posted on February 14, 2009By Alan WhiteThe Administration's foreclosure rescue plan, expected to be announced next week, will have to contend with the bad incentives it will create for mortgage lenders and servicers. While much ink has been spilled about moral hazard for borrowers,...
Times Reports on Identity Theft Risks, Foreclosure Crisis, Privacy Policies, and More
Posted on February 14, 2009by Jeff Sovern Lots in the Times this week on consumer law issues, so here goes. Tomorrow's Times will include Bob Tedeschi's Mortgages column, Your Financial Data: How Safe is it? about a Wolters Kluwer Financial Services of Minneapolis survey...
Marotta-Wurgler Study finds Rolling Software License Agreements Are No More One-Sided Than Others
Posted on February 13, 2009Florencia Marotta-Wurgler of NYU has written Are 'Pay Now, Terms Later' Contracts Worse for Buyers? Evidence from Software License Agreements, 38 J. Legal Studies -- (2009). Here's the abstract: The rise of commerce over the Internet and telephone has led...
Update - January's Subprime Mortgage Modifications
Posted on February 13, 2009By Alan White Mortgage modifications in January continued converting risky subprime loans into risky modified loans. Negative amortization and temporary rate reductions with future rate shock remain common in modifications. Here is my summary of the January 25 investor reports...
Journal of Consumer Education Now Available Online
Posted on February 11, 2009The Journal of Consumer Education (JCE) is now available as a full-text electronic journal beginning with Volume 1 here. As a sample of its issues, here is the table of contents for volume 24, dated 2007: Gift Card Practices and...
New Javelin Report Finds 22% Increase in Identity Theft Victims
Posted on February 10, 2009by Jeff Sovern Javelin's latest identity fraud survey, released yesterday, contains, at best, mixed news on the progress made in preventing and detecting identity fraud. Here's the first paragraph of the press release: The 2009 Identity Fraud Survey Report ?...
Ten New NCLC Publications with Companion Websites
Posted on February 09, 2009Automatic subscribers to NCLC manuals by now have received their updates: two revised editions, six supplements and a new Consumer Law Pleadings. All 18 consumer law manuals now come with companion websites, including an updated Consumer Law on the Web...
New 50 State UDAP Report Card
Posted on February 09, 2009A new report by the National Consumer Law Center: ?Consumer Protection in the States: A 50-State Report on Unfair and Deceptive Acts and Practices Statutes,? issued February 5, 2009, analyzes and summarizes unfair and deceptive acts and practices (UDAP) laws...
NCLC Report on Credit Report Dispute System
Posted on February 08, 2009by Jeff Sovern The National Consumer Law Center released a report authored by Chi Chi Wu last week, Automated Injustice: How a Mechanized Dispute System Frustrates Consumers Seeking to Fix Errors in Their Credit Reports, that charges that Equifax, Experian,...
The Wrong Foreclosure Plan
Posted on February 06, 2009By Alan WhiteAll indications are that the Administration will announce a foreclosure plan next week that consists largely of throwing taxpayer money at investor losses. This is as wrong-headed as it could possibly be.Absent from all discussions are any proposals...
National Motor Vehicle Title Information System Begins
Posted on February 04, 2009Last Friday, the National Motor Vehicle Title Information System began operations. The database is to list cars that have been determined to be too badly damaged to be worth repairing or that were stolen, so that consumers can avoid buying...
The impending sell-out
Posted on February 04, 2009The Naked Capitalism blog has an excellent discussion today of why the Administration's likely plan to rescue banks is a rescue for shareholders and bondholders and a disaster for taxpayers.
Ben-Shahar on the Opportunity to Read Contracts
Posted on February 03, 2009Omri Ben-Shahar of Chicago has written The Myth of the 'Opportunity to Read' in Contract Law. Here's the abstract: Standard form contracts in consumer transactions are usually not read by consumers. This "unreadness" of contracts creates opportunities for drafters to...
Self-Promoting Post
Posted on February 02, 2009OK, it's not consumer law, but I had another letter in the Times today. Here it is: To the Editor: Why not bar banks taking bailout money from giving any employee compensation exceeding some extremely comfortable amount, say $250,000 a...
Fed Proposes to Bar Banks From Automatically Enrolling Customers in Overdraft Protection Plans
Posted on February 02, 2009The Fed has proposed an amendment to Regulation E and the accompanying commentary that would bar banks from enrolling consumers in their overdraft protection plans without customer approval. The proposal is available here. Comments are due by March 30...
Second Circuit Decision Strikes Down Class Action Arbitration Ban
Posted on January 30, 2009In In re American Express Merchants' Litigation, No. 06-1871 (2d Cir. Jan. 30, 2009), the U.S. Court of Appeals for the Second Circuit today struck down an arbitration clause that banned any type of class or representative litigation. The Second...
Fox News Backs Away from Copyright Claim Against ProgressIllinois.com -- For Now
Posted on January 30, 2009by Paul Alan LevyFox News, which filed DMCA takedown notices late last year against three excerpts showing significant remarks by political figures during news interviews that were posted by ProgressIllinois.com on YouTube, as well as the Progress Illinois blog, has...
A Comment on the New Credit Card Solicitation Disclosures
Posted on January 29, 2009by Jeff Sovern I have commented before on the December amendments to the credit card provisions of Regulation Z (here and here) but I find that as I prepare to teach them, I have a bit more to say. You...
Block-Lieb and Wiener on Whether Disclosure Helps Prevent Overindebtedness
Posted on January 28, 2009Susan Block-Lieb of Fordham and Richard L. Wiener of Nebraska have co-authored Disclosure as an Imperfect Means for Addressing Overindebtedness: An Empirical Assessment of Comparative Approaches. Here's the abstract: Within a generation, household overindebtedness has grown to become a social...
Fed to Write Down Mortgage Balances
Posted on January 28, 2009Yesterday Chairman Bernanke announced in a letter to Congressman Barney Frank that the Fed will include principal reductions in its plan to modify mortgages that it controls through Maiden Lane LLC, a vehicle set up by the Fed to hold...
Nationalize the Banks, Modify the Mortgages
Posted on January 27, 2009By Alan WhiteNo more than 10 companies now service most of the mortgages in the U.S, including the four big banks (Citi, Wells Fargo, Chase and BofA). Ocwen is aggressively modifying mortgages, including principal writedowns, and is reporting good results,...
Gail Hillebrand of Consumers Union on Payments Law
Posted on January 26, 2009Gail Hillebrand of Consumers Union has written Before the Grand Rethinking: Five Things to Do Today with Payments Law and Ten Principles to Guide New Payments Products and New Payments Law, 82 Chicago-Kent Law Review 769 (2008). Here's the abstract:....
Times Piece by Debt Collector and Reports on Other Consumer Issues
Posted on January 25, 2009Today's Times has a piece written by a debt collector about how he helps people, In Tough Times, A Debt Collector Sees the Pain. An excerpt: When someone calls back and thanks you for suggesting they get the debt resolved...
Simkovic Study Finds 2005 Bankruptcy Act Profits Credit Card Companies at Consumers' Expense
Posted on January 23, 2009Michael Simkovic of Harvard's Olin Center for Law and Economics has written The Effect of 2005 Bankruptcy Reforms on Credit Card Industry Profits and Prices. Here's the abstract: The U.S. Bankruptcy code changed dramatically with the passage of The Bankruptcy...
Soliciting Suggestions for Selected Consumer Statutes
Posted on January 22, 2009My co-authors and I are planning to come out with a new edition of Selected Consumer Statutes, the statutory supplement to the casebook, ideally in time for fall classes. While we've been able to incorporatethe amendments to TILA, Regulation Z,...
Hillman and Barakat on Warranties and Disclaimers in the Electronic Age
Posted on January 21, 2009Robert A. Hillman of Cornell and Ibrahim Barakat of White and Case have written Warranties and Disclaimers in the Electronic Age. Here's the abstract: This paper reports on software-licensor express warranty and disclaimer practices on the Internet. Our data show...
Times Reports on Loan Fraud, Foreclosure Rescue Scams, Financial Advice, and More
Posted on January 21, 2009Sunday's issue brought Robert J. Shiller's Economic View column, How About a Stimulus for Financial Advice?, suggesting that the government subsidize personal financial counseling and that if it had done so years ago, the housing bubble would have been less...
Supreme Court Takes Bank Preemption Case
Posted on January 18, 2009On Friday the Court took Cuomo v. Clearing House Association, 08-453. After then-Attorney General Eliot Spitzer had sought information from national banks in connection with an inquiry into racial discrimination by the banks, the OCC sued the Attorney General's Office...
Nudging Mortgage Borrowers
Posted on January 16, 2009Now that the Fed is moving closer to a libertarian paternalism Nudge-like approach to credit card statements (we blogged about it here; and there's more on the Nudge web site about it here), perhaps it will consider using a similar...
A Nudge to Make Timely Credit Card Payments
Posted on January 14, 2009One of the things I love about the new amendments to Regulation Z is that they require that credit card monthly statements have a "Late Payment Warning" next to the payment due date. The Late Payment Warning advises consumers that...
New Fair Credit Reporting Act Ruling From 11th Circuit
Posted on January 13, 2009by Brian WolfmanCheck out Levine v. World Financial Network, No. 08-10416 (11th Cir. Jan. 12, 2008), a new Fair Credit Reporting Act decision from the Eleventh Circuit. Experian, the mammoth credit reporting company, sold a credit report about the plaintiff...
2009 Email Supplement to Casebook Now Available
Posted on January 12, 2009My co-authors and I have put together a new supplement to our consumer law casebook and the accompanying Selected Consumer Statute. As a measure of how much has been happening in consumer law, this is our third update since the...
Scientists at FDA's Medical Device Center Claim Agency is Mismanaged and Bends to Manufacturers' Demands
Posted on January 11, 2009CNN is reporting that nine scientists at the Food and Drug Administration's Center for Devices and Radiological Health have written a six-page letter to President-elect Barack Obama and his transition team, alleging gross mismanagement at the agency that has "placed...
NHTSA Recalls for December 2008
Posted on January 09, 2009The National Highway Traffic Safety Administration issued these recalls in December 2008.
Good Judgment by the Martin Luther King Estate in Not Misusing Trademark Law to Suppress Racist Speech
Posted on January 07, 2009by Paul Alan LevyWe have often discussed the misuse of intellectual property law claims by corporations and public figures to suppress speech that they do not like (for example, here, here, and here). A recent story in the Atlanta Journal...
Countrywide settles predatory lending complaint
Posted on January 06, 2009by Richard AldermanCountrywide Financial Corp. has agreed to make loan modifications for about 395,000 mortgage holders and pay $150 million into a foreclosure relief fund to settle predatory lending complaints filed by various states. For more information, click here.
More Consumer Law at the AALS
Posted on January 06, 2009The AALS has announced a few additional panels on "hot topics," including the following event, at which Lauren Willis, whose work I greatly admire, will speak: Friday, January 9, 2009, 8:30-10:15 am, The Financial Crisis, Marriott Salon 2, Marriott Pavilion/Lobby...
Different Take on New RESPA Reg
Posted on January 05, 2009This is NCLC?s take on HUD?s new RESPA Regulation changes. [Although under my name, this was written by Diane Thompson with input from other NCLC staffers.] The new Good Faith Estimate Statement (GFE) does seem much more user-friendly?with a couple...
Times Articles on Credit and Other Matters
Posted on January 04, 2009I have accumulated a huge pile of articles from the New York Times on consumer issues, so here goes an attempt to shrink it somewhat. Today's Times includes an editorial, A Voice for the Consumer, urging the Obama Administration to...
December 2008 CPSC Product Safety Recalls
Posted on January 03, 2009Check out the Consumer Product Safety Commission's December 2008 product safety recalls.
Jeffrey Stempel on Mandating Minimum Quality in Mass Arbitration
Posted on January 02, 2009Jeffrey W. Stempel of UNLV has written Mandating Minimum Quality in Mass Arbitration, 76 Univ. Cincinnati L. Rev. 383 (2008). Here's the abstract: The Supreme Court's decision in McMahon and its progeny has led many businesses and employers to embrace...
Collective Bargaining with Card Issuers?
Posted on January 01, 2009Happy New Year to all, and may I say, good riddance to 2008 (economically speaking that is). Yesterday's New York Times has a good story about the relationships between credit card issuers and universities. Banks offer kickbacks to colleges who...
Buyology and Consumer Law
Posted on December 30, 2008I've been listening to the audio version of Martin Lindstrom's Buyology, a book about the neurological basis of marketing. Lindstrom is a branding expert and marketer and reports on what brain scans have contributed to the art of marketing. For...
A Comment on HUD's New RESPA Regulations
Posted on December 28, 2008Last month, when HUD came out with its new RESPA regs, we blogged about it here. I've been going through the regs more carefully in connection with an update to our casebook that my co-authors and I are preparing (we're...
Times Article About WaMu's Striking Lending Decisions
Posted on December 28, 2008The Times has an amazing article today, By Saying Yes, WaMu Built Empire on Shaky Loans, about Washington Mutual's loan decision-making process. The article describes how one now-jailed supervisor kept drug paraphernalia on his desk, claims by borrowers were rarely...
Times Examines How the Bush Administration Contributed to the Subprime Crisis
Posted on December 27, 2008Last Sunday, December 21, the Times published White House Philosophy Stoked Mortgage Bonfire, a lengthy study of how the Bush Administration contributed to the subprime bubble. The article describes how the Bush administration policies of promoting both free enterprise and...
Norm Silber on Late Payment Fees
Posted on December 26, 2008One of my favorite writers on consumer law, Norm Silber of Hofstra, has written Late Charges, Regular Billing, and Reasonable Consumers: A Rationale for a Late Payment Act, 83 Chicago Kent L. Rev. 855 (2008). Here's the abstract: This essay...
Hoofnagle & King on Company Sharing of Consumer Information
Posted on December 25, 2008Chris Jay Hoofnagle and Jennifer King, both of Berkeley, have co-authored Consumer Information Sharing: Where the Sun Still Don't Shine. Here's the abstract: In late 2007, the popular social networking site Facebook.com adopted "Beacon," an application that informs Facebook users'...
Foreclosures Ease a Bit
Posted on December 22, 2008By Alan WhiteTwo new foreclosure reports are out today, one from HOPE Now and one from the federal bank regulators (OCC and OTS). November foreclosure filings are down in a trend that started in August, and modification numbers overall are...
New Class Action Fairness Act Decision
Posted on December 20, 2008In a split decision, the Fourth Circuit has held in Palisades Collections LLC v. Shorts, No. 08-2188 (Dec. 16, 2008), that the Class Action Fairness Act's removal provision, 28 U.S.C. 1453(b), does not permit a counter-defendant to remove a class...
New Credit Card Regulations
Posted on December 18, 2008OTS has now approved new credit card regulations. Their fact sheet includes the following summary of the regs: 1. Interest rate changes ? The rule (Section 535.24) requires savings associations to disclose at account opening the annual percentage rates (APRs)...
New Credit Card Rules Expected to be Adopted Tomorrow
Posted on December 17, 2008Reuters reports here that the Fed, the Office of Thrift Supervision, and the National Credit Union Administration are expected to adopt the regs, which run about 1,000 pages, tomorrow. The regs are expected to bar double-cycle billing, universal default, and...
Using Misleading Keyword Advertising to Draw Consumers Away from Actual Complaint Web Sites
Posted on December 17, 2008by Paul Alan LevyThe CBS affiliate in Atlanta has been running a series about Lifestyle Lift, a company previously discussed in this blog because of its attempt to suppress criticism by filing spurious trademark claims against Justin Leonard, who operated...
New Jersey passes Foreclosure Relief Legislation
Posted on December 17, 2008The New Jersey General Assembly passed legislation on Monday that provides homeowners with a six-month hold on foreclosure action while they seek a workout, and requires mortgage holders to maintain foreclosed properties. The legislation also appropriates funds for non-amortizing second...
November 2008 CPSC and NHTSA Recalls
Posted on December 17, 2008November 2008 Consumer Product Safety Commission recalls are here and National Highway Traffic Safety Administration recalls are here.
Could Truth in Lending Have Saved the World?
Posted on December 16, 2008I have a theory: had Truth in Lending ("TILA") functioned better, many borrowers would have understood their payment obligations well enough not to take out the loans on which they later defaulted, the foreclosure fiasco would never have happened (or...
Public Interest Freedom of Information Clinic Launched
Posted on December 16, 2008Public Citizen's Litigation Group has recently launched a Freedom of Information Act (FOIA) Clinic that will provide expanded assistance to public interest organizations seeking government-held information. Non-profit organizations need statistics, reports, and other information collected or created by government agencies...
Pity the poor debt collector?
Posted on December 14, 2008Consumers took on millions of dollars of credit card, medical, and other debt in the last five or six years, creating lots of work for debt collectors. But debt collectors say they are hurting along with everyone else in this...
More on Consumer Transaction Costs
Posted on December 12, 2008Two years ago I published an article on consumer transaction costs, Towards a New Model of Consumer Protection: The Problem of Inflated Transaction Costs, 47 William and Mary L. Rev. 1635 (2006). Now I've posted to SSRN a short companion...
Why true conservatives aren't the enemies of plaintiffs: Musings on CAFA Jurisdiction
Posted on December 11, 2008Yesterday, Brian Wolfman posted a piece to this blog about a recent article by law prof and Cato ally Mark Moeller on why CAFA may be an unconstitutional extension of federal court jurisdiction. I'll leave it to y'all to read...
Peter Swire on Underenforcement in E-Commerce and Internet Harms
Posted on December 10, 2008Peter P. Swire of Ohio State, and, as noted here, an adviser to the Obama Administration-to-be on consumer matters, has written No Cop on the Beat: Underenforcement in E-Commerce and Cybercrime. Here's the abstract: This essay gives new reasons why...
Is CAFA Unconstitutional In Some Applications? One Scholar Says Yes.
Posted on December 10, 2008by Brian WolfmanMark Moller, a law professor, adjunct scholar at the Cato Institute, and former editor-in-chief of Cato's Supreme Court Review, has just written an article entitled "A New Look at the Original Meaning of the Diversity Clause." Based on...
Stephen E. Friedman Argument that the Federal Arbitration Act Doesn't Apply to Internet Transactions
Posted on December 09, 2008Stephen E. Friedman of Widener has written Protecting Consumers from Arbitration Provisions in Cyberspace, the Federal Arbitration Act and E-SIGN Notwithstanding, 57 Catholic University Law Review (2008). Here's the abstract: Arbitration provisions are among the most significant of boilerplate contract...
Carillo on the Needs of Consumers in Multilingual Housing Markets
Posted on December 07, 2008Jo J. Carrillo of Hastings has written In Translation for the Latino Market Today: Acknowledging the Rights of Consumers in a Multilingual Housing Market, 11 Harvard Latino Law Review 1 (2008). Here's the abstract: The Federal Truth in Lending Act...
Oren Bar-Gill and Elizabeth Warren Co-author Making Credit Safer
Posted on December 06, 2008Oren Bar-Gill of NYU and Elizabeth Warren of Harvard have joined forces to write Making Credit Safer, 157 U. Penn. L. Rev. (2008). Here's the abstract: Physical products, from toasters and lawnmowers to infant car seats and toys to meat...
Housing Counselors Report ? Needless Foreclosures Continue Apace
Posted on December 04, 2008The most recent housing counselor survey by the California Reinvestment Coalition reveals the continuing frustration homeowners face as they try to actualize the promises of the mortgage servicing industry. Counselors report, consistent with my research, that servicers are not willing...
Interesting Explanation for the Lesser Depression
Posted on December 03, 2008Here's an interesting explanation for the current plight of our economy--which I've come to think of as the Lesser Depression--gleaned from the MP3 version of the ALI/ABA program The Subprime Mortgage Crisis: From A to Z. One of the speakers...
Tranche Warfare Declared
Posted on December 02, 2008HousingWire reports that investors are suing Countrywide [complaint here] in its role as mortgage servicer, objecting to Countrywide's settlement with state regulators whereby it will modify home mortgages to reduce interest and principal. While the modifications can be justified in...
The Economic Team and the Foreclosure Crisis
Posted on December 01, 2008By Alan White So far President-Elect Obama's economic team, while perhaps full of bright people, reflects very little diversity in viewpoint, coming mostly from the mainstream, centrist, a-little-Keynsianism-is-OK-but-not-too-much school of thought. Notably missing are any economists one might regard as...
U.S. PIRG's 23rd Annual "Trouble in Toyland" Report
Posted on November 30, 2008U.S. PIRG has issued its 23rd annual "Trouble in Toyland" report just in time for the holidays. This report alerts consumers to the hazards of some children's toys. Read PIRG's press release and "Tips for Toy Safety" as well.
Carrillo on Consumer Challenges to Adjustable Rate Mortgages
Posted on November 29, 2008Jo J. Carrillo of Hastings has written Dangerous Loans: Consumer Challenges to Adjustable Rate Mortgages, 5 Berkeley Bus. L. J. 1 (2008). This article has the distinction of having two abstracts. Here's the SSRN abstract: This article analyzes the relationship...
Worst yet to come?
Posted on November 26, 2008The New York Times published a gloomy anonymous email from a banker castigating his own industry yesterday. The banker predicts further bank collapses as more credit card receivables go into default. The banker makes the point that credit card divisions...
A few answers to Tom Willging's questions
Posted on November 26, 2008A few days ago on this blog, the ever-brilliant Tom Willging (at the Federal Judicial Center) posted a thoughtful set of comments about CAFA. At the end of his post, Tom posed some interesting questions. Always at the ready with...
Amended RESPA Regulations for Good Faith Estimates
Posted on November 25, 2008On November 17, HUD issued amended regulations intended to simplify and provide more timely notice of mortgage settlement notices under RESPA. Here's the summary of the amendments from the HUD Federal Register Notices: The changes made by this final rule...
New Federal Judicial Center Study on the Class Action Fairness Act: One of the Authors Speaks
Posted on November 24, 2008by Tom Willging, Federal Judicial Center[Ed. note: The following post was written by Tom Willging, a senior researcher at the Federal Judicial Center, the research arm of the federal judiciary. Tom knows as much about the inner workings of the...
Who Is the Obama Administration Seeking Advice From on Consumer Issues?
Posted on November 21, 2008Nan Hunter of Georgetown is compiling on her blog a list of law professors in the Obama administration (If you know of others involved in consumer matters in the Obama administration--law professors or not--please post it in the comments). In...
Hot Off the Presses: Federal Judicial Center Issues New Report on CAFA
Posted on November 21, 2008by Brian WolfmanThe Federal Judicial Center (FJC) has just released the most recent in a series of reports to the Federal Civil Rules Advisory Committee concerning the operation of the Class Action Fairness Act of 2005 (CAFA). Read the report...
Consumer Representation Needed on ABA Subcommittee on Cyberspace Law
Posted on November 20, 2008James P. Nehf of Indiana--Indianapolis is looking for one or two people who might be interested in working as consumer representatives on the American Bar Association subcommittee on Cyberspace Law (Section on Business Law). He explains: The purpose is to...
Good news: Greed is not a First Amendment right
Posted on November 20, 2008Earlier this week, on November 18, the U.S. Court of Appeals for the First Circuit issued an excellent opinion confirming that the First Amendment?s guarantee of free speech?even its bastard stepchild commercial speech?did not allow ?data miners? to sell data...
Comptroller of Currency Responds to Claims that CRA Contributed to the Subprime Lending Crisis
Posted on November 19, 2008In a speech before the Enterprise Annual Network Conference today, Comptroller of the Currency John C. Dugan rejected claims that the Community Reinvestment Act was responsible for the subprime lending crisis: * * * While not perfect, CRA has made...
Courts Mediate Foreclosures
Posted on November 19, 2008Local courts around the country are implementing mediation programs in order to reduce foreclosure sales and encourage negotiated workouts. The Philadelphia program (photos here) is one of the most ambitious, enlisting the aid of hundreds of counselors and volunteer lawyers...
Latest Development in Jones Day Trademark Abuse Case
Posted on November 19, 2008by Paul Alan Levy A few weeks ago, I commented on the efforts of mega law firm Jones Day to abuse trademark law to suppress articles it didn?t like on a real estate transactions web site, BlockShopper.com. Jones Day claims...
Michael S. Barr et al. on Behaviorally Informed Home Mortgage Regulation
Posted on November 18, 2008Michael S. Barr of Michigan, Sendhil Mullainathan of Harvard's Economics Department and the National Bureau of Economic Research (NBER), and Eldar Shafir of Princeton have co-authored "Behaviorally Informed Home Mortgage Regulation." Here's the abstract:Choosing a mortgage is one of the...
Foreclosure and Modification Data
Posted on November 18, 2008By Alan White We now have foreclosure and mortgage modification reports coming from five sources on a periodic basis: the Mortgage Bankers Association National Delinquency Survey (watch for the 3rd quarter report due the first week of December), the FHFA...
State of Texas Objects to Ameritrade Settlement
Posted on November 18, 2008by Brian Wolfman A little while back, Public Citizen Litigation Group objected to the proposed settlement in In re Ameritrade Accountholder Litig., No. 3-07-cv-02852-VRW (N.D. Cal.), on behalf of the named plaintiff who instigated the litigation. The case concerns alleged...
Bail out Detroit? Not without some conditions.
Posted on November 17, 2008While I did not like the idea of bailing out Wall Street, I really do not like the idea of bailing out Detroit. Yes, the auto industry is a cornerstone of the American economy. Yes, the collapse of GM, Ford,...
Paying (but not overpaying) the Servicers
Posted on November 17, 2008By Alan White Why are foreclosures continuing, when each foreclosure results in an average loss of $100,000 and frustrated homeowners and counselors are trying to get reasonable loan workouts? One of the many answers to this complex question is how...
Tire Pressure Monitors Save Lives
Posted on November 17, 2008A post today on this blog expressing grave reservations over the proposed bail out of the auto industry referenced the importance of tire pressure monitors in saving fuel. Tire pressure monitors also save lives. And, importantly, Federal Motor Vehicle Safety...
Credit Cards -- Less Purchasing Power
Posted on November 16, 2008In response to current market conditions, the credit card companies are greatly reducing credit limits and increasing fees. Check out this comprehensive article in today's Washington Post.
Lobbyists Descend on the Treasury Department Seeking a Piece of the Bailout
Posted on November 12, 2008Yo! Read this front page article in today's New York Times entitled "Lobbyists Swarm the Treasury for a Helping of the Bailout Pie." A few tidbits: (1) The article suggests that much of the bailout's first installment ($350 billion) may...
Arkansas Supreme Court Strikes Down Payday Loan Law
Posted on November 12, 2008The Arkansas Supreme Court last week struck down the state's Check-Cashers Act, which authorizes and regulates payday lending in the state, as a violation of the state's constitutional ban on usury. The state's constitution prohibits any loan with an interest...
Obama and Antitrust Policy
Posted on November 11, 2008Check out this interesting article in today's New York Times concerning antitrust policy. In it, lawyer David Boies explains why, in light of the economic crisis, Obama may not follow his ordinary policy preference for tough antitrust enforcement.
New York Appellate Division Says Class Action Incentive Awards Are Not Permitted
Posted on November 11, 2008By Brian Wolfman Here's a surprising class action developement: In Flemming v. Barnwell Nursing Home and Health Facilities, Inc., No. 504328 (Oct. 16, 2008), one of New York's intermediate appellate courts has held that New York law prohibits incentive awards...
The Case for Homeowner Debt Relief
Posted on November 11, 2008Today's New York Times reports that nearly a quarter of Americans with mortgages owe more than their home's current value. One example cited in the story is a homeowner with a $630,000 mortgage from 2005 on a home now worth...
Today's Fannie/Freddie Relief Plan
Posted on November 11, 2008By Alan WhiteThe plan to modify loans controlled by Fannie Mae and Freddie Mac announced today, while a step forward, suffers from two major drawbacks. First, Fannie and Freddie do not hold most of the delinquent subprime and alt-A mortgages,...
The AALS Annual Conference and Consumer Law
Posted on November 10, 2008Last year's AALS Conference had a lot for people interested in consumer law, including an interesting talk by CL&P blogger Richard Alderman on arbitration and presentations by others whose scholarship is regularly mentioned on this blog. Because this year has...
Negative Prepayments
Posted on November 10, 2008By Alan White That's what mortgage servicers call it when a loan is modified by adding fees and interest to the principal. Based on reports to investors, I estimate that in September and October $288 million was added to homeowner...
Ray Brescia on the Social Capital Response to the Subprime Mortgage Crisis
Posted on November 08, 2008Ray Brescia of Albany has written "Capital in Chaos: The Subprime Mortgage Crisis and the Social Capital Response," 56 Cleveland St. L. Rev. 271 (2008). Here's the abstract:This article explores the extent to which social capital theory can respond to...
October 2008 NHTSA and CPSC Recalls
Posted on November 07, 2008October 2008 vehicle recalls from the National Highway Traffic Safety Administration are here, and October 2008 product safety recalls from the Consumer Product Safety Commission are here.
The Foreclosure Agenda
Posted on November 06, 2008By Alan White The outgoing administration has failed utterly to get a handle on the foreclosure crisis. Distress sales continue to rise every month, mortgage servicers continue to impose losses of 50% or more on investors (meaning, at this point,...
Payday Lending Intitiatives Rejected
Posted on November 05, 2008The Center for Responsible Lending is reporting that voters rejected ballot initiatives in Arizona and Ohio that would have enabled or extended the legality of payday lending.
Foreclosure Needs Scores
Posted on November 05, 2008Want to know what the foreclosure "needs scores" are for every community in the United States? The Local Initiatives Support Corporation has developed such scores sorted by ZIP Code. According to Housing Policy.org, where you can find a link to...
More Times Reports on Foreclosure Issues, Student Loans, and Target Marketing
Posted on November 04, 2008More reports from the Times: yesterday's issue included "Another Student Loan Company Settles With New York," about the settlement struck by Attorney General Andrew M. Cuomo with Goal Financial; Goal will become the ninth lender to adopt a marketing code...
Michael Barr, Jane Dokko, and Benjamin Keys on the Effect of Race on the Likelihood of Troublesome Subprime Loan Terms
Posted on November 03, 2008Michael S. Barr of Michigan, Jane Dokko of the Fed, and Benjamin J. Keys of Michigan's Economics Department have co-authored "Who Gets Lost in the Subprime Mortgage Fallout? Homeowners in Low- and Moderate-Income Neighborhoods." Here's the abstract:With the subprime mortgage...
FTC Cracks Down on Debt Settlement Firms
Posted on November 03, 2008As previously discussed here, so-called "debt negotiation" companies are engaged in questionable practices in the name of helping consumers. David Giacalone's f/k/a blog notes that the FTC recently settled claims against several debt negotiation firms that the FTC says had...
Times Reports on Lending Issues and Do-Not-Mail Lists
Posted on November 02, 2008I've fallen embarrassingly far behind in my reading of the Times, but here are some of the articles I have managed to get to: Today's edition includes an extraordinary column by Gretchen Morgenson, "Was There a Loan It Didn't Like?"...
Behaviorism and Mortgage Workouts
Posted on November 02, 2008By Alan White Some useful applications of behavioral economics have emerged from efforts to deleverage American homeowners through mortgage renegotiations. Servicers have complained that they have great difficulty persuading borrowers to respond when they offer help and solicit information, like...
Rate Freeze Mods - Not so much
Posted on October 31, 2008By Alan White Looking at the October mortgage modifications (actually 9/25 to 10/25) I noticed that 40% of them were adjustable rate loans with reset dates in the next six months (November to April). Thinking these might be rate freezes,...
FDA Preemption Policy Driven By Politics, Not Science
Posted on October 30, 2008Rep. Henry Waxman's Oversight and Government Reform Committee, using internal FDA documents, issued a devastating report yesterday demonstrating that the FDA was driven by political considerations, not science, in seeking preemption of state-law personal-injury claims involving defective and inadequately labeled...
Research on the Cognitive Deficits of Low-Income Low-Literacy Consumers
Posted on October 29, 2008On October 20. the Wall Street Journal published "Emerging Lessons: For multinational companies, understanding the needs of poorer consumers can be profitable and socially responsible." In addition to discussing consumers in foreign countries, the piece notes that 14% of US...
Latest Foreclosure Numbers
Posted on October 29, 2008By Alan White New foreclosure filings declined a bit from about 200,000 in July to about 180,000 for September, according to HOPE NOW's latest data. Completed foreclosure sales likewise leveled off at around 90,000 monthly. While HOPE NOW reports a...
FDIC's Foreclosure Prevention
Posted on October 23, 2008The FDIC, as conservator for IndyMac, has suspended all foreclosures and is aiming to modify 40,000 out of 60,000 currently delinquent IndyMac mortgages. In the six weeks since the takeover FDIC has mailed out 15,000 loan modification proposals, and has...
Another Call for Reform of the Copyright Code to Prevent Censorship
Posted on October 21, 2008by Paul Alan Levy In an op-ed published today, Larry Lessig calls for reform of the Copyright Code to prevent the sort of political censorship that I discussed a few days ago here. Lessig suggests not only reform of the...
Who Are the Subprime Borrowers and How Many of Them Would Have Been Better Off If No One Had Lent to Subprime Borrowers?
Posted on October 20, 2008Reports on the subprime crisis appear to divide subprime borrowers into three groups. You hear anecdotes about how borrowers fit into one group or the other, but it's not clear how many people belong to each group, or the extent...
Fannie and Freddie by the Numbers
Posted on October 19, 2008By Alan White I?m coming back to a theme here, but the myth that Fannie and Freddie caused the crisis keeps being repeated. The subprime crisis was in no way caused by Fannie Mae and Freddie Mac, nor by Congressional...
How Does the Current Credit Crisis Parallel the Situation in the 1930's?
Posted on October 18, 2008Over at Credit Slips, Adam Levitin talks about "some curious parallels with the 1930's."
Prof. Larry Lessig Releases New Book on the Internet Called "Remix"
Posted on October 18, 2008Stanford law prof and Internet philosopher Larry Lessig has released his latest book on the Internet and the folly and danger of using 20th century constructs such as copyright to regulate it. Lessig's website on the book says this:For more...
CPSC and NHTSA Recalls for September 2008
Posted on October 18, 2008Here are the September 2008 product recalls for the Consumer Product Safety Commission and the National Highway Traffic Safety Administration.
Presidential Campaigns Use Keyword Advertising in Ways that IP Owners Seek to Quash
Posted on October 16, 2008by Paul Alan Levy I have previously discussed the importance of keyword advertising as a source of exposure for comparative and critical advertising about corporations and their products, and warned about the efforts of the IP ownership bar to suppress...
Abusive Copyright Takedowns Aimed at McCain and Obama Show the Need to Amend the DMCA
Posted on October 16, 2008by Paul Alan Levy In the last couple of weeks, both the Obama campaign and the McCain campaign have experienced the sort of abusive use of the intellectual property laws that Greg Beck and I have previously discussed here ?...
Mortgage restructuring and moral hazard
Posted on October 16, 2008By Alan White Although moral hazard concerns for banks and securities investors went out the window with the various bailouts and government guarantee schemes, homeowners are not getting their debt written down, paid, insured or assumed by the Treasury...
Documents Detail Bush Preemption Strategy
Posted on October 15, 2008by Deepak Gupta The American Association for Justice (AAJ) has just released a fascinating new report, based in part on documents they obtained through FOIA, detailing the Bush administration's use of preemption as a deregulatory strategy. In a stealth effort...
Why Consumer Reports Should Rate Law Schools (and Probably Other Graduate Schools Too)
Posted on October 14, 2008Consumer Reports should rate law schools, and perhaps other schools too, for the following four reasons: First, the existing U.S. News rankings do not adequately measure law schools from the perspective of consumers, which in the case of law schools....
The Irrelevant Increase in the FDIC Insurance Cap
Posted on October 13, 2008Adam Levitin over at Credit Slips has this nice post about the irrelevancy of raising the FDIC insurance on bank deposits from $100,000 to $250,000 as part of the bailout bill. Sure, 250K in insurance might help in the rare...
Amanda E. Quester and Kathleen E. Keest on Watters v. Wachovia
Posted on October 13, 2008Amanda E. Quester of the Center for Responsible Lending and consumer advocate and writer Kathleen E. Keest have coauthored Looking Ahead after Watters v. Wachovia Bank: Challenges for the Lower Courts, Congress, and the Comptroller of the Currency, 27 Review...
Times Reports on Credit Card Suits, Modification of Mortgages, Evictions in Chicago and More
Posted on October 12, 2008Yesterday's Times included "When Plastic Seduces, A Reckoning Awaits," about cases in the New York City Civil Court against consumers on credit cards. An excerpt:As the final stop on the subprime lending train, the Civil Court has become the 21st-century...
How Do We Know Consumers Don't Read Small Print?
Posted on October 10, 2008Everybody "knows" consumers don't read fine print. But the empirical evidence I've found to support this claim is surprisingly sparse. Here's what I've come across: From my article, "Towards a New Model of Consumer Protection: The Problem of Inflated Transaction...
A Tale of Two UDRP's
Posted on October 08, 2008by Paul Alan Levy I have recently had some involvement with two proceedings under the Uniform Dispute Resolution Policy ("UDRP"), a procedure for deciding trademark disputes about domain names. The International Corporation for Assigned Names and Numbers ("ICANN"), which controls...
The Fannie Freddie Fable
Posted on October 08, 2008At last night's debate, Senator McCain trotted out the discredited fiction that Fannie Mae and Freddie Mac were the root cause of the foreclosure crisis, and that they started the practice of making reckless loans to homeowners who couldn't repay...
Aggressive Mortgage Mods Work
Posted on October 08, 2008By Alan M. White A distressed homeowner?s chances of being offered a meaningful loan restructuring, as opposed to demands for increased payments to make up past defaults, depends a lot on which mortgage servicing company they happen to be dealing...
Times Reports on Postal Savings Banks and Countrywide Settlement
Posted on October 06, 2008Today's Times has an interesting op-ed piece, "Mailing Our Way to Solvency," about the use of postal savings bank, which existed in this country until 1966 and still exist in some other countries. The author suggests that postal savings banks...
An Off-Topic Comment
Posted on October 06, 2008While I generally confine my remarks on this Blog to consumer law issues, every once in a while I write about something which is at best tangentially related to consumer law. This is one of those comments. If that bothers...
Debt Collector Uses Consumer's Debit Card Information for Spending Spree
Posted on October 06, 2008The Buffalo News reports here about a debt collector who persuaded a consumer to provide him with her debit card information and then ran up nearly $2,000 of charges on her account. He later asked the debt collection agency for...
Times Reports on Causes of Mortgage Crisis, FDA Problems, and More
Posted on October 05, 2008Robert Frank has a terrific column in today's Times, "Pursuit of an Edge, In Steroids or Stocks," explaining why fund managers were willing to invest in subprime mortgage-backed securities. The entire piece is worth reading, but here are some excerpts:If...
A Bit More on Blaiming the CRA
Posted on October 03, 2008A couple of weeks ago Alan had a thoughtful post here about the ridiculous claims that the subprime crisis was caused by the Community Reinvestment Act. I've been meaning to pile on. One of the arguments critics of the CRA...
Consumer Interests Annual Available
Posted on October 03, 2008The Proceedings of the 54th Annual Conference of the American Council on Consumer Interests, also known as the Consumer Interests Annual, is now available here. Most of the contributors are consumer academics, though not of the law school variety; the...
New York Exempt Income Protection Act Enacted
Posted on October 03, 2008On Friday, September 26, Governor Paterson signed into law New York's Exempt Income Protection Act. Some payments, such as certain Social Security benefits, are immune from seizure by debt collectors. But some debt collectors had found a way to get...
Did Some ISP's Give in Too Easily to Dozier's Threats of Suit over Their Customer's Speech?
Posted on October 03, 2008by Paul Alan Levy Yesterday I commented on the efforts of John W. Dozier, Jr. to use spurious claims of trademark infringement to get a ?sucks? site, www.cybertriallawyer-sucks.com, taken down, focusing on the trademark claim itself. That claim will, ultimately,...
Another Case of Abusive Trademark Claims to Suppress Speech ? John Dozier redux
Posted on October 02, 2008by Paul Alan Levy A few weeks ago, I nominated the law mega-firm Jones Day for an award for the most abusive trademark claim brought to suppress speech they don?t like. Today?s post concerns another abusive trademark claim that might...
Mortgage Crisis Scholarship
Posted on October 02, 2008The mortgage crisis is rightfully drawing the attention of scholars. Here are links to a few papers on SSRN: My St. John's colleague, Vincent DiLorenzo, is working on "Mortgage Market Deregulation and Equity Stripping Under Sanction of Law." The abstract...
Stabilize Home Mortgage Borrowers with Eminent Domain
Posted on September 29, 2008By Lauren E. Willis [reprinted here with permission] Edward Leamer?s ?trickle up? economic plan is a good start, but if a downward spiral is a serious possibility in the economy right now, we need not a trickle but a flood....
Query About the Bailout Mechanism
Posted on September 29, 2008Now that the House has rejected the bailout proposal in its present incarnation (see here), perhaps those who know more about this subject than I do can help me understand something: if the problem is with the freezing of credit,...
Homeowners and the Bailout
Posted on September 29, 2008By Alan White For homeowners as well as for banks, the bailout deal announced today could be a turning point, or it could be more of the same, depending on what Treasury actually does with its enormous new powers. Treasury...
Times Article on Impact of Bailout on Distressed Homeowners
Posted on September 29, 2008Amid the welter of articles on the bailout proposal is this one in today's Times on the impact of the bill on homeowners: "A Bill Encouraging to Distressed Homeowners, but Its Reach is Unclear." An excerpt:The legislation does take steps...
Supreme Court Term Begins Soon - Sign Up For Supreme Court Watch List Now
Posted on September 29, 2008by Brian Wolfman Today, Monday, September 29, the Supreme Court Justices held their annual "long conference" at which they considered hundreds of petitions for writs of certiorari that had piled up over the Court's 3-month summer recess. If the Court's...
Another idea
Posted on September 27, 2008By Alan White Instead of buying mortgage-backed securities from banks, Treasury could buy the mortgages themselves from the servicers of mortgage-backed securities at a discount via a reverse auction. As written, I believe the Paulson plan would actually permit this...
Moral Hazard and the Bailout: A One-Minute Play
Posted on September 26, 2008Time: Five years or so in the future. Setting: Exterior of a dilapidated home. DRACO rings the home's doorbell.Jorkins: Hello? Draco: Good morning. I couldn't help but notice that the siding on your home looks, well, it looks as if...
Fannie and Freddie too big?
Posted on September 24, 2008By Alan White Die-hard free market advocates are responding to the nationalization of Fannie Mae and Freddie Mac by calling for them to be gradually shrunk out of existence, to unleash the private market to meet our housing finance needs....
Jones Day Opposes Trademark Amicus Brief -- What Is It Afraid Of?
Posted on September 24, 2008by Paul Alan Levy Twelve days ago, I posted comments here about a Jones Day lawsuit claiming that its trademark is infringed and diluted by mention of its name in headlines of articles on the BlockShopper web site, www.blockshopper.com, and...
Construction Arbitration Services? Arbitrator Allegedly Destroys Evidence, Faces Motion for Contempt
Posted on September 23, 2008By Matt Melamed and Paul Bland Among consumer advocates, advocates for home buyers and home owners, and lawyers who represent consumers, Construction Arbitration Services ("CAS") is notorious for being cozy with the home construction industry and for often ruling for...
House Passes Credit Cardholders Bill of Rights
Posted on September 23, 2008Gov.track.us is reporting that the House passed the Credit Cardholders Bill of Rights, 312-112. You can see the roll call vote here.
Consumer Groups Win Suit Over Used Vehicle Database
Posted on September 23, 2008Last February, we blogged about a suit filed by Public Citizen, Consumers for Auto Reliability and Safety, and Consumer Action against the Department of Justice over its 15-year unlawful delay in establishing a used vehicle database. The purpose of the...
Blaming the CRA
Posted on September 23, 2008By Alan White The financial crisis is now being attributed by the Wall Street Journal editors and other right wingers to the Community Reinvestment Act. The CRA requires banks to provide loans and financial services in underserved communities, particularly poor...
American (Defense) Bar Association
Posted on September 21, 2008I am an ABA member. While not the same as saying, ?I am Spartacus,? it does carry with it the potential for the scorn of many plaintiff lawyers, who see the ABA as a treehouse for the defense bar that...
It?s all about the Mortgages
Posted on September 21, 2008By Alan White Secretary Paulson is trying to solve the freeze-up of the credit markets by buying up the mortgage-backed securities (MBS) that banks are holding and cannot value. Because nobody seems to know whether MBS are worth 10 cents...
How About a Little Debate on the Massive Bank Bailout?
Posted on September 21, 2008by Brian Wolfman Remember the last time government policy was made in the interest of the nation with barely a peep of mainstream protest, as the press went along for the ride? Think early 2003. Yesterday, Alan White on these...
Paulson's Breathtaking Power Grab
Posted on September 20, 2008By Alan White The New York Times has posted a draft of the bill Treasury Secretary Paulson wants Congress to pass next week, handing over the Constitutional appropriation power to him, to the tune of $700 billion. The bill would...
Bush Administration Seeks Bailout of U.S. Financial Markets
Posted on September 20, 2008by Brian Wolfman The Washington Post strikes again, with more than a dozen articles today on the U.S. financial crisis and the Bush Administration's non-laissez faire approach to fixing it. To give you a flavor, the lead article, entitled "Historic...
Public Citizen and EFF file amicus brief opposing Jones Day trademark strike suit
Posted on September 19, 2008by Paul Alan Levy In a previous post, I discussed abusive trademark claims put forward by Jones Day seeking to suppress speech on the BlockShopper web site about two of its associates that it did not like. Defendants? motion to...
Times Article Which Raises Questions About Responsibility for Loan Losses
Posted on September 19, 2008As bailouts proliferate, today's Times has a particularly interesting article on the impact of the mortgage crisis on one family: "Coming Up Short: The Pain of Selling a Home for Less Than the Loan." Mike and Linda Kelly of Central...
More Bushvilles
Posted on September 19, 2008The Associated Press issued a new story yesterday on tent cities full of homeless people in Reno and elsewhere.
RTC or HOLC revisited?
Posted on September 18, 2008Some time ago I blogged about proposals to bring back something like the Homeowners Loan Corporation from the 1930's, to buy bad mortgages from banks and restructure them. It seems this idea is catching on. Today's stock market rose on...
Banks in Denial
Posted on September 18, 2008By Alan White At a Congressional hearing yesterday the major banks that now control most of the mortgage servicing in the U.S. made it clear that they are very unlikely to write down the mortgage balances of homeowners facing foreclosure....
Corey Ciocchetti on E-Commerce and Information Privacy
Posted on September 17, 2008Corey Ciocchetti has written "E-Commerce and Information Privacy: Privacy Policies as Personal Information Protectors," 44 American Business L.J. --. Here's the abstract:This article dives into the contemporary debate surrounding information privacy in the twenty-first century e-commerce environment through the lens...
Federal Bailout of Insurance Giant AIG
Posted on September 16, 2008The Wall Street Journal reports here on the U.S. government's $85 billion bail out of insurance giant AIG.
Lehman Brothers's Bankruptcy Petition
Posted on September 16, 2008For all you nerds out there, here's Lehman Brothers's bankruptcy petition. Thanks to Credit Slips!
Read All About the Financial Meltdown
Posted on September 15, 2008It's fashionable to skewer the "main stream media." But that's where I'm finding some of the best day-to-day coverage of the credit crisis, the mortgage meltdown, etc. Highlighted by Lehman Brothers's bankruptcy filing, today's Washington Post has a series of...
Behavioral Law and Economics, Lenders, and the Subprime Mortgage Meltdown
Posted on September 14, 2008Behavioral law and economics maintains that people are subject to certain biases that impair their decision-making. Many consumer law scholars, including me, argue that policy-makers should take these biases into account in formulating consumer protection rules...
New York Times: Congress Should Enact Credit Cardholders "Bill of Rights"
Posted on September 14, 2008Today's New York Times editorializes here in favor of the Credit Cardholders "Bill of Rights" pending before Congress. The legislation takes aim at retroactive rate increases, double cycle billing that allows assessment of interest on amounts already paid, multiple over-limit...
The Failure to Regulate Fannie and Freddie
Posted on September 14, 2008This major story in today's Washington Post takes the position that the failure of congressional leaders and the Clinton Administration to curb the uncontrolled growth of Fannie Mae and Freddie Mac -- and to withstand the enormous lobbying pressure from...
CPSC and NHTSA Recalls for August 2008
Posted on September 14, 2008The Consumer Product Safety Commission's product safety recalls for August 2008 can be found here, and the National Highway Traffic Safety Administration's vehicle and related recalls for the same month can be found here.
Eighth Circuit Finds Class Action Aribtration Ban Not Unconscionable
Posted on September 14, 2008by Brian Wolfman In Pleasants v. American Express, No. 07-3235 (Sept. 8, 2008), the Eighth Circuit has upheld an adhesion contract requiring pre-dispute mandatory arbitration and banning class actions in arbitration. The case involved a dispute over pre-loaded store cards...
Supreme Court of Virginia Strikes Down Anti-Spam Law on First Amendment Grounds
Posted on September 13, 2008Yesterday, in Jaynes v. Commonwealth, No. 06-2388 (Sept. 12, 2008), the Supreme Court of Virginia struck down a state statute that criminalized the sending of unsolicited bulk email to consumers. The defendant in question had been sentenced to 9 years...
Trademark Abuse by Jones Day to Suppress Free Speech
Posted on September 12, 2008by Paul Alan Levy A new entry in the contest for ?grossest abuse of trademark law to suppress speech the plaintiff doesn?t like? comes from Chicago, where the giant law firm Jones Day has sued BlockShopper.com, a web site that...
CPSC Establishes Web Page on Consumer Product Safety Improvement Act
Posted on September 10, 2008The Consumer Product Safety Commission has established a new web page devoted to informing the public about the Consumer Product Safety Improvement Act recently passed by Congress and signed by President Bush. See our earlier post for a synopsis of...
DOJ Disgraces Itself in Support of Nursing Homes
Posted on September 10, 2008The United States Justice Department has completely disgraced itself. On July 30, 2008, Keith Nelson, Principal Deputy Assistant Attorney General of the United States, wrote a letter to the U.S. Senate Judiciary Committee in which he attacked S. 2838, a...
The Problem with the GSE Nationalization
Posted on September 08, 2008By Alan White Once again the Treasury Department has stepped in to protect investors in mortgage-backed securities (this time those of Fannie Mae and Freddie Mac) but has not addressed the underlying problem. Now that the US taxpayer will become...
Read the Complete Details on the Freddie/Fannie Takeover
Posted on September 08, 2008Today's Washington Post has a terrific set of stories on the Freddie/Fannie takeover. Start with this lead story and then click on "view all items in this story" for a drop down menu with about 10 other stories. Read about...
Times Reports on Responses to the Subprime Crisis, Student Loan Issues, Unauthorized Bank Account Transfers, and More
Posted on September 07, 2008Bob Tedeschi's Mortgages column in today's Times, "Shying Away From N.Y. Loans," reports on a consequence of the new New York subprime law: making it even harder for subprime borrowers to obtain loans. An excerpt:Among other things, borrowers with high-cost...
The Government Takes Over Fannie and Freddie
Posted on September 07, 2008The takeover is happening.
FDA To Provide Public Listing of Drugs Under Investigation
Posted on September 06, 2008In a major prescription drug safety development, the FDA has decided to post every three months a list of drugs whose safety is under investigation by the agency. This Washington Post story provides details.
The Bail Out of Freddie and Fannie
Posted on September 06, 2008Following up on yesterday's Post, here's a detailed Washington Post article on the planned federal government bail out of Freddie Mac and Fannie Mae. The plan includes dismissal of the companies' top executives and their board members. Shareholders will be...
Foreclosure Crisis - Bad and Getting Worse
Posted on September 06, 2008By Alan White Foreclosures in the United States have reached their highest level since the Great Depression. One of every eleven mortgages is now in default or foreclosure. That's more than five million American homes in trouble. Just in April,...
Government to Seize Fannie Mae and Freddie Mac?
Posted on September 05, 2008The New York Times just reported that senior officials from the Bush Administration and the Fed say the government is preparing a plan to seize Fannie Mae and Freddie Mac and place them in a conservatorship.
Reverse Redlining Predatory Lending Complaint
Posted on September 05, 2008The Associated Press, via Law.com, reports here that a Texan has brought a reverse redlining predatory lending suit suit. According to the article, the plaintiff charges that she was "victimized by a loan with onerous terms because of her skin...
Ninth Circuit Severs Non-Preempted Portion of CA Financial Information Privacy Act
Posted on September 05, 2008by Leah Nicholls Yesterday, a divided Ninth Circuit panel held that the preempted portions of California's Financial Information Act were severable from those that were not preempted by the federal Fair Credit Reporting Act (FCRA). The California law sought to...
Butler and Johnston Provide Economic Analysis of UDAP Statutes
Posted on September 04, 2008Henry N. Butler of Northwestern and Jason Scott Johnston of Penn have written "Consumer Harm Acts? An Economic Analysis of State Consumer Protection Acts." Here's the abstract:State Consumer Protection Acts (CPAs) were adopted in the 1960s and 1970s to protect...
Links to Some Articles in the Journal of Consumer Affairs
Posted on September 04, 2008Last Saturday, I posted here the table of contents for the Fall 2008 Journal of Consumer Affairs. Some of the pieces are available for free on the web; here are the links: Pet Peeves: Trademark Law and the Consumer Enjoyment...
Rebecca Tushnet on Commercial Speech Regulation and the First Amendment
Posted on September 01, 2008Rebecca Tushnet of Georgetown has written "It Depends on What the Meaning of 'False' is: Falsity and Misleadingness in Commercial Speech Doctrine," 41 Loyola L.A. L. Rev. Here's the abstract:While scholarship regarding the Supreme Court's noncommercial speech doctrine has often...
Table of Contents for Fall 2008 Journal of Consumer Affairs
Posted on August 30, 2008Here is the table of contents for the Fall 2008 issue of the Journal of Consumer Affairs (Volume 42, Number 3). It includes an article by Elizabeth Warren, as well as pieces on predatory lending, consumer privacy, food labeling and...
Business Week Article on Fed's Credit Card Proposals
Posted on August 29, 2008Business Week has an article, "Credit Card Rage," about consumer dissatisfaction with credit card interest rate practices and the Fed's proposed rules to rein in some of those practices, including increasing the interest rate on previously-incurred charges...
New Third Circuit Arbitration Decision Worth Reading
Posted on August 29, 2008by Brian Wolfman A construction company hires a new employee, Mr. Morales, who speaks only Spanish. Morales attends a company orientation session conducted only in English. The company employee who runs the orientation asks another, reasonably bilingual employee to explain...
Brian McCall on Usury Law
Posted on August 28, 2008Brian McCall of Oklahoma has written "Unprofitable Lending: Modern Credit Regulation and the Lost Theory of Usury." Here's the abstract:With almost daily news stories about the crisis in our credit markets, it seems inevitable that a new political and academic...
New Study on Mortgage Modifications
Posted on August 27, 2008By Alan White I have just posted a paper on SSRN reporting on loan-level mortgage modification data from subprime mortgage servicer monthly reports. The gist is that voluntary mortgage modifications are not reducing principal debt, and are in fact increasing...
2008 Supplement to Consumer Law Casebook Available
Posted on August 26, 2008I am pleased to announce that the 2008 supplement to our casebook is now finished. I expect Thomson/West will shortly make it available to those using the book but if you are using the book and need it right away,...
Wyoming's 8th Annual Consumer Issues Conference
Posted on August 26, 2008The University of Wyoming's 8th Consumer Issues Conference, to be held Thursday, September 25 from 8:45 to 4:30 at the University of Wyoming Union in Laramie, will focus on energy and telecommunications. There will be 20 speakers on energy and...
Obama co-sponsors bill on soldiers and mandatory arbitration
Posted on August 26, 2008by Deepak Gupta Although the issue hasn't come up in the presidential campaign, those looking for clues about the presidential candidates' views on the ongoing debate over binding mandatory arbitration will want take note of a new piece of proposed...
Loyola Consumer Law Review looking for articles
Posted on August 26, 2008Here's a call for submissions from the Loyola Consumer Law Review: The Loyola Consumer Law Review is currently seeking submissions for this year's journal. The Loyola Consumer Law Review is interested in any recent papers or articles you have written...
COMFORMITY ASSESSMENT PROGRAMME OF THE STANDARDS ORGANISATION OF NIGERIA
Posted on August 25, 2008Here is an abridged version of a paper by Dr. Felicia Monye, Senior Lecturer, Faculty of Law, University of Nigeria, Enugu Campus and Editor-in-Chief of the Consumer Journal. The full text of the paper may be found in volume three...
Call for Papers for Consumer Journal
Posted on August 25, 2008We received this call for papers: Papers are invited for the 4th edition of the Consumer Journal, a publication of the Consumer Awareness Organisation, a non-governmental organisation based in Nigeria. Interested contributors should send their papers to the address below...
Public Citizen wins a big preemption decision
Posted on August 20, 2008Since no one at Public Citizen has posted a comment about the big win yesterday (August 19,2008, for those reading this post from far in the future) in the Third Circuit, I'll do so myself. Brian Wolfman and Adina Rosenbaum...
Lauren E. Willis on Financial Literacy Education
Posted on August 18, 2008Many of us were fortunate enough to hear Lauren E. Willis's talk on financial literacy education at the AALS conference in January. Those who weren't there or who want to know more can read her article, "Against Financial Literacy Education,"...
Times Reports on Home Equity Loans, Countrywide Litigation, Subprime Borrowers, and More
Posted on August 17, 2008Another roundup of article in recent issues of the Times: Friday's Times brought another important installment in "The Debt Trap" series, this one headlined "Home Equity Frenzy Was a Bank Ad Come True," about how banks reframed second mortgages--once seen...
Why the FTC may be showing signs of life
Posted on August 15, 2008Two days ago, August 13, two big deals happened about Airborne, the fake cold remedy. First, the FTC filed its settlement with Airborne before the same California federal judge where a class action lawsuit brought by CSPI and other lawyers...
Bankruptcy Filings Up
Posted on August 14, 2008Credit Slips's Bob Lawless is reporting that bankruptcy filings in July 2008 were their highest since Congress's passage of the 2005 bankruptcy "reform" legislation.
Annual Rate of Consumer Price Inflation Highest in 17 1/2 Years
Posted on August 14, 2008Despite their large impact on consumers, we usually don't report on monthly consumer price, unemployment, or other statistics concerning the health of the U.S. (or world) economy. But today's monthly consumer price index figures for July seem noteworthy because the...
Globalization and the Beaujolais
Posted on August 13, 2008By Alan White Beaujolais wine, pressed from Gamay grapes grown on the hills above the Saone valley, has never had the pretention of its neighboring Burgundy Pinot Noirs to the North or Rhone Grenache/Syrahs to the south. In its heyday...
Paper on Whether Consumers Learn to Avoid Triggering Credit Card Fees
Posted on August 13, 2008Sumit Agarwal, John C. Driscoll, both of the Fed, Xavier Gabaix of NYU's Stern School, and David Laibson of Harvard's Economics Department have written "Learning in the Credit Card Market." Here's the abstract: Agents with more experience make better choices...
Ohio Payday Lenders Caught Lying in Ballot Initiative Signature Drive
Posted on August 13, 2008by Christopher Peterson Yesterday Ohio Public Radio ran a story exposing fraudulent ballot initiative practices used by the Ohio payday lending industry in its campaign to remove the state's new usury limit. The story, available here, features audio clips of...
Amendments to TILA
Posted on August 11, 2008Most of our posts on the federal housing act signed into law last month, which can be found at Pub. L No. 110-289, 122 Stat. 2654, have focused on the Hope for Homeowners Act of 2008. But the statute also...
Foreclosures Affect Renters Not Just Homeowners
Posted on August 09, 2008We tend to think only of homeowners when we think of foreclosures. But what about people who rent homes that go into foreclosure? This Washington Post article discusses the issue.
Call for Papers on Marketing and Public Policy
Posted on August 07, 2008The 2009 Marketing & Public Policy Conference (MPPC), to be held in Washington, DC on May 28-30, 2009, brings together academics, marketing practitioners, government officials, consumer representatives, legal professionals and other interested parties to discuss current issues and research pertaining...
Joseph P. Mulholland Paper on Behavioral Economics and the FTC
Posted on August 05, 2008Joseph P. Mulholland has written "Behavioral Economics and the Federal Trade Commission." Here's the abstract: This paper discusses the relevance of behavioral economics to consumer protection policy, especially to that practiced at the U.S. Federal Trade Commission...
A Nudge to Read Nudge
Posted on August 04, 2008I recently finished listening to the audio version of Richard H. Thaler and Cass R. Sunstein's book Nudge (the audio version lacks references and endnotes, and sometimes I have to take my mind off of the audio for left turns...
Consumer Product Safety Commission Recalls for July 2008
Posted on August 03, 2008Read July's Consumer Product Safety Commission recalls.
Daniel Schwarcz on Resolving Consumer Insurance Disputes
Posted on August 03, 2008Daniel Schwarcz of Minnesota has written "Towards a New Approach for Resolving Consumer Insurance Disputes." Here's the abstract: Much of insurance law and regulation is concerned with compensating consumers who have been wrongly denied coverage. But policyholders nonetheless have relatively...
Consumer Product Safety Bill Passes Congress
Posted on August 02, 2008The Washington Post reports that the Senate yesterday passed landmark consumer product safety legislation by a vote of 89 to 3. This follows House passage of the bill Wednesday by an even more lopsided vote: 424 to 1. The legislation...
House of Representatives Passes Bill to Give FDA Authority to Regulate Tobacco
Posted on July 31, 2008by Brian Wolfman For years, tobacco control advocates have pushed to give the FDA authority to regulate tobacco. Yesterday, the House of Representatives voted to do it -- with a veto-proof majority, but it is unclear whether the Senate will...
The Arbitration Trap Debate
Posted on July 30, 2008[cross posted from Citizen Vox] July 29, 2008 By David Arkush, Taylor Lincoln, and Peter Gosselar Last November, Public Citizen released ?The Arbitration Trap,? a scathing report exposing the one-sided nature of ?justice? for consumers trapped by the National Arbitration...
An Argument Against Legislation to Help Those Facing Foreclosure?
Posted on July 29, 2008Each year the Business Lawyer provides a valuable service by publishing a survey on consumer financial services law. In the introduction to this year's survey, Donald C. Lampe, Fred H. Miller, and Alvin C. Harrell, Introduction to the 2008 Annual...
The new iPhone?when half-price costs 40% more
Posted on July 28, 2008by Richard Alderman I just bought a new iPhone 3G. Great device, no complaints about the phone. But the signs at the store boast ?Twice as Fast?Half the Price.? This claim is based on the fact that the new 3G...
Times Reports on Housing Bill, Identity Theft, and Student Loans
Posted on July 27, 2008Here is the Time's report in today's edition on the Senate passage of the housing bill; it now goes to the President for signature. On Friday the Times ran "A Housing Bill That Has Something for Nearly Everyone" which summarized...
The Questionable "Services" of Debt Settlement Firms
Posted on July 24, 2008by Greg Beck David Giacalone has an eye-opening post on debt solutions services, which, for a fee, offer to negotiate with creditors to reduce a consumer's debt. One such service is NetDebt, a for-profit company that promises to reduce consumers'...
Consumer Groups: Consumer Product Safety Commission Product Recalls Up 22% From Last Year
Posted on July 23, 2008Six national consumer groups -- Consumer Federation of America, Consumers Union, Kids In Danger, Public Citizen, National Research Center for Women & Families, and U.S. PIRG -- today issued a report entitled "Total Recall: The Need for CPSC Reform Now...
President Bush Now Says He'll Sign the Housing Bill
Posted on July 23, 2008The AP is reporting that President Bush has dropped his opposition and will sign legislation that its proponents claim will help homeowners out of the mortgage meltdown and will authorize the Treasury Department to bail out Fannie Mae and Freddie...
Should Victims of Data Breaches Be Able to Recover Absent a Showing of Identity Theft?
Posted on July 21, 2008Most courts have rebuffed suits by consumers against companies that suffered data breaches when the consumers could not show that they had been victimized by identity thieves. For example, in Bell v. Acziom Corp., 2006 WL 2850042 (E.D.Ark. 2006), the...
Sixth Circuit: Class Members Have Right to Appeal Approval of a Class Settlement in Rule 23(b)(3) Opt-Out Cases
Posted on July 21, 2008by Brian Wolfman Check out Fidel v. Farley, No. 06-5550 (July 18, 2008), a brand-spanking-new decision from the Sixth Circuit. Farley holds that class member-objectors to an opt-out class action settlement have the right to appeal a district court's approval...
RNC Gives Up Trademark Claims Against Political Speech
Posted on July 21, 2008by Paul Alan Levy I am pleased to announce that, in a response to public outcry as well as the prospect of a declaratory judgment, the Republican National Committee has renounced the vast majority of the trademark claims that it...
More Reading for CAFA Crazies: Ninth Circuit Holds That CAFA Does Not Override Anti-Removal Provision of Securities Act of 1933
Posted on July 20, 2008In Luther v. Countrywide Home Loans Servicing LP, No. 08-55865 (July 16, 2008), the Ninth Circuit held that the Class Action Fairness Act's broad grant of federal removal jurisdiction over diversity class actions does not override the anti-removal provision of...
Must Read: New York Times Series on Consumer Debt
Posted on July 20, 2008I'd bet you are tired of hearing that this or that is a "must read." But if you are interested in American consumer debt, you really will want to read this article in today's New York Times. It's the beginning...
Credit Card Truncation Cases and Annihilating Damages
Posted on July 19, 2008The credit card truncation cases raise an issue of what to do about potentially annihlating damages. First, a review: in 2003, when Congress enacted FACTA, it added to the Fair Credit Reporting Act a new provision, §1681c(g), which prohibits retailers...
One Class's Field Test of the Magnuson-Moss Disclosure Rules
Posted on July 18, 2008§ 702.3(a) of the Magnuson-Moss Warranty regulations requires that sellers: of a consumer product with a written warranty shall make a text of the warranty readily available for examination by the prospective buyer by: (1) Displaying it in close proximity...
Can the RNC forbid the use of an elephant or "GOP" to identify Republicans?
Posted on July 17, 2008by Paul Alan Levy The latest abuse of trademark law to suppress discussion of topics of substantial public interest comes from not from a company, like most of the trademark abuses previously discussed on this blog, such as here and...
Lab Experiment on Whether Payday Lending Helps Consumers Survive Financial Setbacks
Posted on July 16, 2008Bart J. Wilson of George Mason, David W. Findlay and James W. Meehan both of Colby, Charissa P. Wellford, and Karl Schurter of Virginia have teamed up to write "An Experimental Analysis of the Demand for Payday Loans." Here's the...
Times Articles on Mortgage Regulation, Privacy, and Marketing
Posted on July 15, 2008Here is the article in today's Times on the new Fed rules that Alan blogged about yesterday. Saturday's edition noted in "By Large Margin, Senate Votes to Help Homeowners and Overhaul Loan Agencies" that the Senate had approved the bill...
Data Breaches Increase; FTC to Survey ID Theft Victims on Use of FACTA Rights
Posted on July 14, 2008The FTC has announced that it will survey identity theft victims about "their experiences when they contacted one or more credit reporting agencies and when they sought to use their FACT Act rights." It is seeking comments from the public...
Tiffany's Loses Trademark Claim Against eBay
Posted on July 14, 2008by Greg Beck In a comprehensive 66-page opinion, a federal district judge today rejected Tiffany's claims that eBay infringed its trademarks by allowing the sale of counterfeit Tiffany's goods on its site. The court first held that eBay did not...
Fed Tightens Subprime Mortgage Rules
Posted on July 14, 2008By Alan White While I haven't digested the full rule, it seems that the Fed's final unfair mortgage practices rule (press release with link to Federal Register text) is stricter than initially proposed in at least two key areas. The...
Seventh Circuit: CAFA Means What It Says About Its Appeal "Deadline"
Posted on July 14, 2008by Brian Wolfman For a few weeks now, I've been planning to let you know about the Seventh Circuit's June 11 Class Action Fairness Act (CAFA) decision in Spivey v. Vertrue, Incorporated, No. 08-8009. So, here goes: In Spivey, Judge...
Will More Banks Fail?
Posted on July 13, 2008This post yesterday described the failure on Friday of a major U.S. bank. Will more banks fail as a result of the mortgage crisis? According to this article in today's New York Times, some banking analysts say "yes."
More on Possible Federal Government Measures to Prop Up Fannie and Freddie
Posted on July 13, 2008This Reuters story has a bit more on government plans to rescue Fannie Mae and Freddie Mac if necessary. Here is Treasury Secretary Paulson's official statement on topic. And U.S. PIRG's Consumer Blog has this to say.
U.S. Plans Rescue of Fannie Mae and Freddie Mac and Backs Off - - for Now
Posted on July 12, 2008This story in today's Washington Post describes the federal government's emergency plan for the bail out of the huge mortgage backers Fannie Mae and Freddie Mac and that the government backed off after signs that the institutions were stable --...
Looming Alt-A Bank Failure
Posted on July 11, 2008By Alan White IndyMac Bancorp is a bit like Northern Rock, the UK bank that was nationalized a few months ago. Unlike many leading mortgage lenders, it is an actual bank with actual depositors, whose deposits are insured by the...
ABA IP Section Drops Effort to Attack Comparative Advertising on Search Engines
Posted on July 11, 2008by Paul Alan Levy I am pleased to report that the Intellectual Property Section of the American Bar Association has dropped its efforts, decried a few months ago on this blog as well as here and here, to adopt resolutions...
Do Law Students Get What They Pay For? A Partial Answer (Herein of Faculty Salaries).
Posted on July 11, 2008Recently I wondered how high law school tuition could go. That raises an issue of whether those paying tuition are getting what they pay for. One way to think about that question is to look at how law schools use...
Fed to Announce Mortgage Rule Monday
Posted on July 10, 2008The Federal Reserve will announce its final unfair mortgage practices rule at an unusual public meeting on July 14. The proposed rule would regulate subprime mortgages by requiring reasonable income verification and prohibiting a pattern and practice of making loans...
California Foreclosure Law Passed
Posted on July 10, 2008California has joined New York in passing legislation (full text of bill here) to address the foreclosure crisis. The thrust of the law is to require mortgage servicers to exhaust all avenues in order to contact borrowers and negotiate modified...
Fed to Issue New Mortgage Lending Regulations Next Week
Posted on July 09, 2008During a speech yesterday, Fed Chair Ben S. Bernanke made the following statements about the long-awaited mortgage lending regulations: Next week, the Federal Reserve Board will issue new rules on mortgage lending, using its authorities under the Home Ownership and...
Obama on Bankruptcy
Posted on July 09, 2008Yesterday, at Credit Slips, Elizabeth Warren posted this interesting piece on Obama's views on bankruptcy policy and his view that the law needs to be substantially revised. She explains why she thinks Obama has taken on the bankruptcy issue even...
NHTSA Vehicle Safety Recalls for June 2008
Posted on July 09, 2008Go here to view the vehicle and related equipment recalls announced by the National Highway Traffic Safety Administration in June 2008.
Mark D. Shroder Study of RESPA
Posted on July 08, 2008Mark D. Shroder evaluates RESPA in "The Value of the Sunshine Cure: The Efficacy of the Real Estate Settlement Procedures Act Disclosure Strategy," 9 Cityscape No. 1 (2007). Here's the abstract: This article examines the efficacy of the disclosure strategy...
CL&P Roundup
Posted on July 08, 2008by Deepak Gupta Michigan Supreme Court Holds Foreclosure Unconstitutional: I've written here before about the issue of foreclosure notice procedures -- whether homeowners are getting constitutionally sufficient notice of tax or mortgage foreclosures. In March, I argued a case raising...
Elizabeth Warren on NPR's "Fresh Air" Discussing the Credit Reporting Industry
Posted on July 08, 2008Go here to listen to Professor Elizabeth Warren on Terry Gross's "Fresh Air" last Tuesday discussing the error-prone credit reporting industry.
Consumer Product Safety Commission Recalls for June 2008
Posted on July 08, 2008Check out the Consumer Product Safety Commission product safety recalls for June 2008.
Times Articles on Credit Card Law Reform, Online Privacy, and New York's Foreclosure Legislation
Posted on July 07, 2008The weekend's consumer law harvest from the Times: The Times reported on Saturday that Credit Card Overhauls Seem Likely. The entire article is worth reading, but here's an excerpt: Working with the Office of Thrift Supervision and the National Credit...
The Other Foreclosure Crisis
Posted on July 03, 2008If you think the foreclosure crisis is about greedy home buyers stretching to buy a fancy house in California, you should read this article in the current issue of the Nation. It is one of the best accounts I have...
Breach of implied warranty of merchantability or fitness may be a tort
Posted on July 03, 2008In JCW Electronics v. Garza, the Texas Supreme Court consider whether to apply the state?s proportionate responsibility statute to a claim based on a UCC implied warranty. Despite the fact that a prior version of the state expressly included UCC...
Times Articles on Foreclosure Issues, Mortgage Fees, and College Loans
Posted on July 03, 2008Here are links to a few articles from the Times on consumer law issues from June that I've been stockpiling: From June 22, Bob Tedeschi's Mortgages Column, "A Close Look at All Those Fees," is about how little consumers know...
Florencia Marotta-Wurgler Study of EULAs
Posted on July 02, 2008Florencia Marotta-Wurgler of NYU has written "'Unfair' Dispute Resolution Clauses: Much Ado About Nothing?" in Boilerplate: Foundations of Market Contracts (Omri Ben-Shahar, ed., Cambridge University Press, 2007), analyzing dispute resolution clauses in end user license agreements...
Times Editorial on the Need for Congressional Action in the Foreclosure Crisis
Posted on July 01, 2008The Times editorializes here in today's paper about the importance of Congressional action on the foreclosure crisis. Some excerpts: By the time the Senate returns next Monday from its July 4 recess, some 55,000 more homes will have entered foreclosure...
Prima Paint applies to confidentially agreement.
Posted on July 01, 2008In an interesting case, ITT Educ. Serv. Inc. v. Arce, the 5th Circuit has held that parties to an arbitration may not disclose a copy of the arbitrator?s findings in an independent proceeding involving the same defendant. The Appellants (consumers)...
Oren Bar-Gill & Richard A. Epstein Debate Behavioral Economics vs. Neoclassical Economics in the Context of Consumer Contracts
Posted on June 30, 2008Oren Bar-Gill of NYU and Richard A. Epstein of Chicago and Stanford's Hoover Institute have each contributed a piece to "Consumer Contracts: Behavioral Economics vs. Neoclassical Economics," 92 Minnesota Law Review (2007-2008). Here's the abstract: In the past decade behavioral...
New Mexico Supreme Court strikes down class-action ban
Posted on June 30, 2008by Deepak Gupta On Friday, New Mexico's highest court unanimously handed consumers an important victory, holding that, "in the context of small consumer claims that would be prohibitively costly to bring on an individual basis, contractual prohibitions on class relief...
Times Reports that New Housing Bill Will Help Only a Fraction of Borrowers in Distress
Posted on June 29, 2008Today's Times reports in "As Housing Bill Evolves, Crisis Grows Deeper," that the bill making its way through Congress will help only about 400,000 of the millions of borrowers in distress. Some excerpts: ?It?s not enough, even in the best...
Obama on Consumer Debt
Posted on June 29, 2008Barack Obama discusses his legislative agenda regarding consumer debt with Michelle Singletary of the Washington Post. Obama notes that until he cashed in on his best-selling books, he and his wife were carrying significant student loan debt. "We were making...
House of Representatives Holds Hearing on Credit Card Marketing to Students
Posted on June 29, 2008Check out this post over at U.S. PIRG's Consumer Blog discussing the hearing last Thursday held by the House Financial Service Committee's Financial Institutions and Consumer Credit subcommittee regarding marketing of credit cards to college students...
Legendary Plaintiffs' Lawyer Dickie Scruggs Sentenced to Five Years in Prison for Bribing a Judge
Posted on June 29, 2008The headline of this post gives you the gist. For the sordid details, see this article from the New York Times.
Times Articles on the Tort War, Illinois' Suit Against Countrywide, and Google's Marketing
Posted on June 28, 2008Recent articles from the Times of interest: Yesterday''s edition contains "Google Tries Tighter Aim for Web Ads" about how Google uses what a consumer searched for a few minutes ago to target ads for that user. Another article, "Post-Spitzer, A...
States going after Countrywide
Posted on June 27, 2008By Alan White Illinois, California and Washington all filed actions against Countrywide this week alleging a variety of deceptive practices and fair lending violations. The California complaint attacks a variety of origination practices, especially involving negative amortizing mortgages (so-called pay...
Study Finds that Firms That Use Arbitration Clauses in Consumer Contracts Often Do Not Use Such Clauses in Nonconsumer Contracts
Posted on June 26, 2008In "Arbitration's Summer Soldiers: An Empirical Study of Arbitration Clauses in Consumer and Nonconsumer Contracts," Theodore Eisenberg of Cornell, Geoffrey P. Miller of NYU, and Emily L. Sherwin of Cornell report that firms that use arbitration clauses in consumer contracts...
Mynutritionstore?s not-so-ingenious theory to evade the CDA?s protection for consumer complaint sites
Posted on June 26, 2008by Paul Alan Levy In a recent series of demands, a purveyor of ?nutraceuticals? called mynutritionstore.com threatened to sue Julia Forte over consumer criticisms appearing on her web site 800notes.com, a forum for identification and discussion of telemarketers based on...
Mortgage Relief Bill Stalls in U.S. Senate
Posted on June 26, 2008A bill to provide mortgage relief to hundreds of thousands of Americans has stalled in the Senate because Senator John Ensign (R-Nev.) says that he won't allow the bill to go forward until the Senate tacks on tax breaks to...
Mortgage Delinquency Rates Way Up
Posted on June 26, 2008This morning's Washington Post: "In a sign of continuing trouble in the housing market, mortgage delinquency rates doubled over a 12-month period at Fannie Mae and Freddie Mac, the two industry giants reported yesterday." Read the whole story here.
Kurt Eggert Paper: What Prevents Loan Modifications?
Posted on June 25, 2008Kurt Eggert has written What Prevents Loan Modifications? 18 Housing Policy Debate No. 2. Here's the abstract: This comment describes the barriers to preventive servicing for securitized residential loans and assesses the importance of loan modifications, given the recent increases...
eBay to Offer Consumer Protections
Posted on June 25, 2008One of the problems of shopping online and paying for items with PayPal is that the consumer does not get the same legal protections as when he or she uses a credit card to directly pay the merchant. According to...
One Reason No One Reads Privacy Policies and How Changing the Incentives Might Make Privacy Policies More Readable
Posted on June 24, 2008At the Privacy Law Scholars Conference at GWU, hosted jointly by GWU and Berkeley Law Schools, on June 12 and 13, I served as a discussion leader for a session titled "Death to Privacy Policies" about how few people read...
New Study on Elderly Abuse by Banks
Posted on June 20, 2008Banks charged over $1 billion in overdraft fees to elderly consumers dependent on Social Security for most of their income. This is one of the many findings in a report issued this week by the Center for Responsible Lending, relying...
Bounce loans, the Fed rule and the unbanked
Posted on June 20, 2008By Alan White The Federal Reserve has proposed a rule to allow consumers to opt out of their bank's discretionary overdraft payment and fee harvesting programs, better known as bounce protection or bounce loans. In the past four or five...
Soaring Mortgage Foreclosure Rate in Washington, D.C. Region Among Highest in Country
Posted on June 19, 2008This front-page story in today's Washington Post explains that the mortgage foreclosure rate in the Washington, D.C. area has exploded in the last year and is now among the highest in the country. An excerpt: The Washington region now has...
AARP Report: Bankruptcy Filings By Older Americans Have More Than Doubled
Posted on June 18, 2008The AARP's Public Policy Institute has just released Generations of Struggle, the first research report using data collected from the 2007 Consumer Bankruptcy Project. The authors are Deborah Thorne of Ohio University, Elizabeth Warren of Harvard Law School, and Teresa...
Interesting Empirical Work on Consumer Privacy and EULAs
Posted on June 16, 2008I spent part of last week at the splendid Privacy Law Scholars Conference at GWU, hosted jointly by GWU and Berkeley Law Schools, and organized by Dan Solove and Chris Hoofnagle. One of the great things about the conference is...
How High Can Tuition Go?
Posted on June 14, 2008Each year, colleges and universities hike tuition, typically by more than the rate of inflation. Competition among schools undoubtedly constrains the hikes to some extent, but are there any other limits? An economist might say that it makes sense to....
May 2008 Safety Recalls
Posted on June 13, 2008Check out the May 2008 safety recalls for vehicles from the National Highway Traffic Safety Administration and for other consumer products from the Consumer Product Safety Commission.
Elizabeth Warren on Business Week's NAF expose
Posted on June 11, 2008Over the weekend, Brian posted about Business Week's new must-read investigative report on how the National Arbitration Forum stacks the deck against consumers. Elizabeth Warren has just posted her thoughts on the article over at Talking Points Memo: Whether you...
ACORN Names State Attorneys Generals Doing the Most to Battle the Foreclosure Crisis
Posted on June 11, 2008by Brian Wolfman The grassroots organization ACORN has just released a report that I think our readers will find interesting. The report looks at the reaction of the attorneys general of the 50 states and D.C. to the current foreclosure...
The Philadelphia Plan
Posted on June 11, 2008Philadelphia's county court has combined a 3-month moratorium on selected foreclosures with an intensive counseling and mediation program, in order to prevent unnecessary foreclosure sales. Owner-occupants with pending sheriff's sales must first go to free counseling...
President Signs FACTA Truncation Bill
Posted on June 10, 2008Recently we reported here that Congress had passed a bill that would block credit card slip truncation suits--that is, the many suits that have been filed for violation of the FCRA provision, § 1681c(g), added by FACTA, barring retailers from...
Supreme Court Patent Decision Should Give Some Comfort to Consumers
Posted on June 10, 2008by Greg Beck Cross-posted from Citizen Vox The Supreme Court yesterday issued an important decision involving patents that, although technical in nature, may end up becoming an important victory for consumers. In recent years, companies have increasingly attempted to use...
Should Arbitrators Have to be Licensed?
Posted on June 09, 2008Jeffrey W. Stempel argues that sometimes they should be in "Keeping Arbitrations from Becoming Kangaroo Courts," 8 Nevada L. Rev. 251 (2007). Here's the abstract: Arbitration has grown rapidly during the past 20 years. Particularly notable and problematic is the...
Chicago Court System a "Frenetic Debt Collections Machine"
Posted on June 09, 2008The Chicago Tribune has this interesting article on the state of debt collections in Chicago, noting that Cook County courts are clogged with more than 119,000 civil lawsuits against alleged debtors. Many of these cases involve mistaken identities or debts...
AP Poll on Relationship Between Crushing Debt, Stress, and Poor Health
Posted on June 09, 2008This blog has covered issues relating to consumer debt intensely. But we have often ignored the personal toll unmanageable debt imposes on people's lives. This long story in today's Washington Post discusses an AP-AOL poll of consumers regarding the relationship...
Home Equity Loans Squeezed
Posted on June 08, 2008Not surprisingly in light of recent events, obtaining loans and maintaining lines of credit against one's home equity are getting more difficult. This New York Times article explains.
2.5% of Home Mortgages in Forecslosure; More than 6% delinquent
Posted on June 07, 2008Check out this post from Credit Slips discussing a survey done by the Mortgage Bankers Association showing that 2.47% of home mortgages are in bankruptcy and 6.35% are delinquent.
More on the National Arbitration Forum
Posted on June 07, 2008We have blogged frequently about binding pre-dispute arbitration in consumer contracts, including here, here, and here about the alleged bias of the National Arbitration Forum, one of the major private arbitration companies. Now, Business Week has weighed in with this...
It's Bad Out There
Posted on June 06, 2008Highlights of the First Quarter National Delinquency Survey By Alan White For the third quarter in a row, foreclosures and mortgage defaults are rocketing upwards, according to the Mortgage Bankers Association report on foreclosures and delinquent mortgages as of March...
An Interesting Take on the Subprime Crisis
Posted on June 06, 2008A stick figure explanation for the subprime crisis. (HT to Brian Leiter).
The Hazards of Suing a Consumer Review Website
Posted on June 06, 2008by Paul Alan Levy After Lifestyle Lift sued Justin Leonard for allowing putting its name in the ?path? for pages on his infomercialscams.com web site where consumers commented on the merits of Lifestyle?s product, claiming trademark infringement and dilution, Leonard...
New York City Consumer Debt Working Conference
Posted on June 05, 2008The Feerick Center for Social Justice and the New York County Lawyers Association Justice Center are sponsoring a free conference on Consumer Debt in New York City on Thursday, June 19, 2008 from 8:30 AM to 5:00 PM at the...
The Content of Consumer Law Classes
Posted on June 05, 2008Want to know what is taught in consumer protection classes? I've now posted to SSRN "The Content of Consumer Law Classes," which will appear in 12 Journal of Consumer and Commercial Law, No. 1. The piece reports on the survey...
Los Angeles to Sue Time Warner Cable for Poor Service
Posted on June 05, 2008The Los Angeles City Attorney is suing Time-Warner Cable today for making false and misleading statements to subscribers and violating the terms of its franchise agreement with the city. The complaint alleges that, despite promises to "fix . . ....
Fed staff reads behavioral economics literature
Posted on June 04, 2008For you law (or economics) professors out there writing about behavioral economics, take heart. Sometimes people who write regulations are listening (and reading.) The new credit card unfair practices rule proposed jointly by the Federal Reserve, OTS, and NCUA makes...
Jean Sternlight on Governmental Imposition of Arbitration on Companies in Consumer Disputes
Posted on June 04, 2008Jean R. Sternlight of UNLV, a frequent critic of binding arbitration clauses, discusses whether it would be acceptable and constitutional for the government to impose arbitration on companies in consumer disputes in "In Defense of Mandatory Arbitration (If Imposed on...
Technical Difficulties
Posted on June 04, 2008We appear to be experiencing a problem due to Typepad's recent software upgrade, leading to the disappearance of our sidebars and headlines. We are currently working to resolve the issue and apologize for any inconvenience. Thank you for your patience...
The Dangers of "Standard" Terms
Posted on June 04, 2008An interesting post by David Giacalone explains how used car dealers use "standard" sales contracts to avoid competition on the terms of their warranties. The use of standard terms is one reason why some things, like lawyer contingency fees, seem...
CSPI Seeks FDA Ban on 8 Food Dyes
Posted on June 04, 2008The Center for Science in the Public Interest (CSPI) has petitioned the Food and Drug Administration to ban eight food dyes that the group claims cause behavioral problems in some children and serve to enhance the appeal of unhealthy foods....
Minnesota Foreclosure Freeze Vetoed
Posted on June 03, 2008Minnesota governor Tim Pawlenty vetoed a bill that would have delayed residential foreclosures on subprime and negative amortization loans. The bill would have allowed owner-occupants to delay foreclosure by up to one year, by paying at least 65% of their...
Tokyo Drift
Posted on June 02, 2008By Alan White From 1992 to 1998, Japan?s economy drifted in what became known as the Heisei depression, as banks and regulators stubbornly refused to recognize losses on overvalued loan and real estate assets. The prolonged crisis in Japan had...
Attack on Behavioral Law and Economics
Posted on June 02, 2008I just finished listening to the audio version of economist Tim Harford's book The Logic of Life during my commutes. The thesis of the book is that people are rational and so respond to incentives. This clashes to some extent...
HOPE NOW April numbers and spin
Posted on June 01, 2008By Alan White On Friday HOPE NOW, the mortgage servicer coalition, released its April numbers for foreclosures and loan workouts. Unlike its prior reports, the April tally does not include new foreclosures started in April. Instead of showing both the...
BK Court: Lender Can't Rely on Liar Loan App
Posted on May 30, 2008A California couple with income of about $65,000 recently lost their home to foreclosure after having refinanced their mortgage debt up to about $680,000. How did they manage to borrow that much? Stated income (no-doc) mortgages, of course. After they...
Loan Modifications and PSA contract limits
Posted on May 29, 2008One of the obstacles to preventing foreclosures through loan modifications has been the restrictions in securitization contracts. The pooling and servicing agreements ("PSAs") that create securitization trusts usually limit the servicer's authority to rewrite mortgage terms on behalf of the...
House and Senate Vote to Amend FCRA to Block Credit Card Truncation Suits
Posted on May 29, 2008Congressional Quarterly's Weekly Report reports that the Senate has passed a bill, H.R. 4008, that would block credit card slip truncation suits--that is, the many suits that have been filed for violation of the FCRA provision added by FACTA barring....
Justice Department Forces Traditional Realtors To Give Up Stranglehold on Internet Home Listings
Posted on May 29, 2008This article in yesterday's Washington Post discusses the National Association of Realtors' agreement with the U.S. Justice Department that will facilitation the listing of home sales by Internet-based realtors - - properties that were sometimes listed only by traditional brokers...
Upcoming Journal of Consumer Affairs Issue on Financial Literacy
Posted on May 28, 2008Here is the table of contents for the upcoming Summer 2008 issue of the Journal of Consumer Affairs, Volume 42, Number 2 : Special Issue on Financial Literacy: Public Policy and Consumers? Self-Protection Editorial Prelude: Financial Literacy, Public Policy, and...
April 2008 Auto Safety Recalls
Posted on May 28, 2008Go here to view the National Highway Traffic Safety Administrations recalls for April 2008.
A Lowest Common Denominator Approach to Insurance Regulation?
Posted on May 28, 2008Check out this interesting and scary post by Elizabeth Warren over at Credit Slips. Here are two key paragraphs to whet your appetite: The effective repeal of usury laws in the US was accomplished in the quietest possible way: In...
Supreme Court Rules in Favor of Plaintiffs in Two Key Employment Discrimination Cases
Posted on May 28, 2008Although a bit off this blog's beaten path, I thought readers might want access here to the Supreme Court's important decisions issued yesterday in CBOCS West, Inc. v. Humphries, No. 06-1431, and Gomez-Perez v. Potter, No. 06-1321. CBOCS held by...
Consumer Banktruptcies Soar Despite Restrictions Enacted by Congress in 2005
Posted on May 28, 2008Check out this front page article in today's Washington Post discussing the significant increase in consumer bankruptcies, despite Congress's enactment in 2005 of legislation intended to tighten eligibility for bankruptcy. As the article puts it: "Despite the 2005 passage of...
Consumer advocate fights off trademark arbitration claim
Posted on May 27, 2008by Greg Beck Robert Arkow runs a website at the domain names metrolinkrider.com and metrolinksucks.com (no longer active) where riders and employees of Metrolink, the Southern California commuter rail system, share their gripes about services and fares...
Settlement opens access to multiple listings service
Posted on May 27, 2008For years, the National Association of Realtors (NAR) blocked access to its multiple listing service, preventing online real estate agents from access to home listings. No longer. The Department of Justice's Antitrust Division settled today a 2005 lawsuit claiming that...
Why the NAF Wants Courts to Lower the Burden of Proof on Debt Collectors
Posted on May 27, 2008by Paul Bland Several of the principals of the for-profit National Arbitration Forum, a Minnesota-based company that aggressively advertises offers a more corporate-friendly system of private judging than other private arbitration firms, have been writing and publishing articles arguing in...
Supreme Court Refuses to Hear Class-Action Ban Issue
Posted on May 27, 2008by Deepak Gupta A cutting-edge issue in the world of consumer law--and one that this blog has discussed many times before (see, e.g., here, here, and here)--is the extent to which corporations can enforce class-action bans placed in consumer adhesion...
Survey on Content of Consumer Law Classes
Posted on May 27, 2008Last Friday, at Richard Alderman's excellent Teaching Consumer Law Conference, under the auspices of the University of Houston Law Center--the conference where, two years ago, this Blog was born--I distributed a survey inquiring about what topics professors teach in their...
Customer Disservice
Posted on May 26, 2008Sick of having to push 10 phone buttons to get to the customer service representative -- you know, the person who can't really help you anyway? Check out this article from Saturday's New York Times about the decline in customer...
Countrywide weary of homeowner pleas for help
Posted on May 25, 2008Angelo Mozilo, CEO of Countrywide, inadvertently replied to a homeowner's email requesting foreclosure prevention help by saying he found these requests disgusting and unbelievable (because the homeowner used a template from a website to write his hardship letter...
50% for Housing?
Posted on May 24, 2008By Alan M. White One question posed in the Federal Reserve's pending mortgage regulation is what percentage of income Americans should devote to housing. The question isn't posed in quite those terms, but those are the terms in which I...
Checkmate
Posted on May 23, 2008Checkmate is a new web video about the realities of check cashing stores and banks in poor neighborhoods. [HT Consumerist]
A court gets one right, holds truthful use of a competitor's trademarks is not infringement
Posted on May 22, 2008by Greg Beck Trademark law was designed to protect consumers from being fooled by products that are passed off as something they are not. Too often, however, it is invoked by companies not to protect consumers, but to interfere with...
Foreclosure Crisis Update
Posted on May 22, 2008By Alan M. White Six months ago I reported that mortgage servicers were much more likely to foreclose than to offer loan modifications, based on data from monthly remittance reports to investors. Since then far more data have become available,...
Public Citizen wins against anti-consumer copyright claim
Posted on May 22, 2008by Greg Beck Cross-posted from Citizen Vox When Seattle resident Tim Vernor put a used copy of software for sale on eBay, the software's maker, Autodesk, demanded that eBay cancel the listing. Although Vernor was selling an authentic, original copy...
New Poll: Americans Say "No Thanks" To Binding Arbitration
Posted on May 21, 2008A new national opinion poll shows widespread disapproval of binding arbitration provisions in consumer contracts and overwhelming support for the Arbitration Fairness Act now pending in Congress. By five to three, Americans said they disapprove rather than approve of consumer...
Senate Negotiators and Banking Committee Agree on Aid for Those Facing Foreclosure
Posted on May 20, 2008Today's Times has an article headlined "Senate Leaders Reach Deal on Housing Assistance." Here's an excerpt: Senate negotiators on Monday said they had reached a deal on legislation aimed at helping hundreds of thousands of homeowners in danger of foreclosure...
Booming Business in Boat Repos
Posted on May 20, 2008The New York Times is reporting a rising tide (note the ironic pun) in boat repossessions. --Just one more example of the America's problematic debt culture. Here's the lead: So many people have so many things they can no longer...
New CAFA Decision From Second Circuit
Posted on May 20, 2008by Brian Wolfman In Estate of Pew v. Cardarelli, No. 06-5703-mv (May 13, 2008), the Second Circuit resolved a couple issues under the Class Action Fairness Act (CAFA), which greatly expanded federal diversity jurisdiction over class actions. In Pew, an...
FTC Workshop on Consumer Information and the Mortgage Market
Posted on May 19, 2008On May 29, the FTC will host what sounds like an important conference on the role of consumer information in the mortgage marketplace. Here's an excerpt from the FTC's announcement: * * * The purpose of this conference is to...
Update on Adam Levitin Paper
Posted on May 19, 2008On Friday, we blogged about Adam Levitin's paper here. Professor Levitin has posted to SSRN a significantly revised version of the piece, titled "A Critique of the American Bankers Association's Study on Credit Card Regulation."
Adam Levitin Responds to ABA Study on Regulation of Credit Cards
Posted on May 16, 2008Adam Levitin of Georgetown has written "All But Accurate: A Critique of the American Bankers Association's Study on Credit Card Regulation." Here's the abstract: This review article takes issue with three of the main assertions of the American Bankers Association's...
Hoofnagle and King on What Californians Understand About Privacy Offline
Posted on May 15, 2008Chris Jay Hoofnagle, who has made important contributions on identity theft, has teamed with Jennifer King, both of Berkeley, to produce "Research Report: What Californians Understand About Privacy Offline." The Report raises disturbing questions about the extent to which consumers...
Reckless lenders
Posted on May 15, 2008Today's New York Times reports on a court ruling (Order and Opinion here) allowing a shareholder suit against Countrywide to proceed. The court cited specific allegations in the complaint that company directors ignored numerous red flags alerting them to widespread...
U.S. House Committee on Oversight and Government Reform Holds Hearing on Federal Preemption of State Tort Claims Involving Drugs and Medical Devices
Posted on May 14, 2008The Committee on Oversight and Government Reform of the U.S. House of Representatives held a hearing today entitled ?Should FDA Drug and Medical Device Regulation Bar State Liability Claims?? The Committee described the hearing as follows: FDA approval of drugs...
Melissa Jacoby on Mortgage Delinquency Management
Posted on May 14, 2008Melissa B. Jacoby of North Carolina has written "Home Ownership Risk Beyond a Subprime Crisis: The Role of Delinquency Management," 76 Fordham L. Rev. (2008). Here's the abstract: Public investment in and promotion of homeownership and the home mortgage market...
Times Pieces on Foreclosure Crisis, Predatory Lending, and Wachovia Telemarketing Case
Posted on May 13, 2008Yesterday the Times published an editorial on the Bush administration response to the foreclosure crisis, with the noteworthy headline, "Saying No to Everything." An excerpt: Even before the House passed a new plan last week to prevent foreclosures, President Bush...
Credit Card Profits Safe, for Now
Posted on May 13, 2008Fitch Ratings, the people who were so wrong about subprime mortgages, remain guardedly optimistic about credit card profits, and the performance of securitized credit card receivables, expecting credit card yield spread to remain ?robust.? Prime credit card issuers are paying...
U.S. District Court Holds That Rape and Assault Claims Against Haliburton Are Not Subject to Arbitration, but Court Case Stayed While Other Claims Are Arbitrated
Posted on May 13, 2008by Brian Wolfman Last December, we blogged here about Haliburton's efforts to force into arbitration a suit brought by a former employee who maintains that she was gang-raped by her Haliburton co-workers in Baghdad. The plaintiff also filed a Title...
Deborah Thorne and Katherine Porter Paper on Financial Education for Bankrupt Families
Posted on May 12, 2008Deborah Thorne of Ohio University's Department of Sociology and Katherine Porter of Iowa have co-authored Financial Education for Bankrupt Families: Attitudes and Needs, 24 Journal of Consumer Education 15 (2007). Here's the abstract: This paper examines bankrupt families' attitudes toward,...
Times Reports on Prospects for the Housing Bailout Bill, Jingle Mail, and Cell Phone Spam
Posted on May 11, 2008Yesterday's Times had several articles on consumer law. First, "Housing Bailout Bill Seems on Shaky Ground" reports on the prospects for the bill the House passed on Thursday. An excerpt: The Bush administration on Friday said it would only support...
Ninth Circuit Allows Claims of Deceptive Food Marketing to Go Forward
Posted on May 08, 2008by Brian Wolfman In Williams v. Gerber Products Company, No. 06-55921 (Apr. 21, 2008), the plaintiff class pleaded common-law misrepresentation and breach of warranty claims, as well as claims under California?s Unfair Competition Law, Cal. Bus. & Prof...
Did Lenders Anticipate a Bailout if Loans Soured?
Posted on May 07, 2008Before policymakers undertake more bailouts arising out the subprime mortgage crisis, policymakers should ask the classic question: what did subprime lenders know and when did they know it? While much remains unclear about the crisis, considerable evidence suggests that at...
NPR: Countrywide Loan Officer Coaching Loan Applicants to Lie
Posted on May 06, 2008by Christopher Peterson National Public Radio ran a story this morning reporting on a Washington, D.C. family's experiences applying for a loan with Countrywide. The customer says that Countrywide's loan officer aggressively coached her to lie about her and her...
Product Safety Recalls for April 2008
Posted on May 03, 2008Consumer Product Safety Commission recalls for April 2008 are here. As usual, the monthly recall report from the National Highway Traffic Safety Administration is delayed. We'll post NHTSA's April 2008 report when it becomes available.
Federal Reserve Proposing New Protections for Credit Card Consumers
Posted on May 02, 2008The top story in the Washington Post this morning is this story entitled "Fed to Pursue Aggressive Checks on Credit Cards." The Federal Reserve, along with the Office of Thrift Supervision and the National Credit Union Administration, will issue proposed...
Times Articles on Mortgage Plans
Posted on May 02, 2008Today's Times reports, in "House Panel Approves Bill to Assist Borrowers," that the House Financial Services Committee, "pushed forward on Thursday with an aggressive effort to help troubled homeowners, approving legislation that would make up to $300 billion in federally...
Much More on Proposed Federal Reserve Credit Card Rules
Posted on May 02, 2008Earlier today, we blogged about a new Federal Reserve proposal to protect credit card users from predatory bank practices. You can go to the Federal Reserve's webpage on the proposal to find a ton of information, including the agency's press...
Rent-a-Center reconsiders hunger aid
Posted on May 01, 2008Rent-a-Center, the publicly-traded rent to own chain, is having some second thoughts about its charitable donations to an Ohio food bank. Second Harvest signed on to the Ohio Coalition for Responsible Lending, which favors stricter regulation of credit, including payday...
Call for Papers on the Subprime Mortgage Crisis
Posted on April 30, 2008We've received a call for papers on the subprime mortgage meltdown: The Albany Government Law Review is planning an issue dedicated to the pressing topic of the Subprime Mortgage Crisis. The issue will offer a varied look into the subprime...
New Consumer Law Symposium from Competition Policy International
Posted on April 30, 2008by Chris Peterson Competition Policy International, a peer reviewed antitrust journal, has just come out with a new symposium on consumer protection. Among other highlights, you might check out Emory Law Professor Paul Rubin's argument that government should ignore advertising...
Fast-Food Calorie Law Goes Into Effect in New York City
Posted on April 30, 2008by Deepak Gupta Did you know that a smoked turkey sandwich (930 calories) at Chili's has more calories than a sirloin steak (540 calories)? Or that a large milk shake from Mc Donald's has over 1,000 calories, about half a...
Third Circuit Ruling On Permissive Class Certification Appeals Under Rule 23(f)
Posted on April 28, 2008by Brian Wolfman Federal Rule of Civil Procedure 23(f) says a court of appeals may permit an appeal from a district court order granting or denying class certification if a petition for permission to appeal is filed with the court...
Elizabeth Warren's Financial Services Product Safety Commission Proposal
Posted on April 27, 2008Last month Deepak mentioned Elizabeth Warren's proposal for a financial services product safety commission. You can find her Harvard Magazine article, Making Credit Safer: The Case for Regulation here. The entire article is worth reading, but here are some excerpts:...
Second Circuit: Plaintiffs Have Standing To Pursue Antitrust Case Alleging Collusion By Major Credit Card Companies To Require Arbitation And Ban Consumer Class Actions
Posted on April 25, 2008by Brian Wolfman The Second Circuit today issued Ross v. Bank of America, No. 06-04755 (Apr. 25 2008). In this case, the plaintiff credit card holders claimed that the defendant banks conspired in violation of section 1 of the Sherman...
Call for Papers - International Association of Consumer Law (IACL) International Conference, Hyderabad 25-27 February 2009
Posted on April 25, 2008The 12th International Conference on Consumer Law, organised under the auspices of the International Association of Consumer Law (www.iaclaw.org) will be organised by the NALSAR University of Law (www.nalsarlawuniv.ac.in) in Hyderabad, India on February 25-27, 2009...
The "Snowballing Futility" of Arbitration for Employees
Posted on April 25, 2008Here's some more recent news on arbitration. A study by Professor Michael LeRoy of the University of Illinois shows that, while employers are frequently successful in getting arbitration awards overturned in state court, employees are not. LeRoy examines a "snowballing...
WSJ on Arbitration Bias
Posted on April 25, 2008Last month, San Francisco sued the National Arbitration Forum, accusing the arbitrator of unfairly favoring credit card companies in disputes with their customers. Nathan Koppel of the Wall Street Journal this week delved deeper into the allegations of bias (the...
6.5 million
Posted on April 24, 2008That's the new number for total projected foreclosures in the U.S. through 2012, according to a Credit Suisse report released Tuesday. In other words, one of every eight mortgages will be foreclosed. Not one of eight subprime mortgages, one of...
Consumer Law Conference is just one month away
Posted on April 23, 2008Next month, the Center for Consumer Law at the University of Houston Law Center will present the only conference dedicated to the teaching of consumer law. If you are currently teaching or want to teach consumer law, at the College...
Fed Meeting on Mortgage Mega-Merger
Posted on April 22, 2008By Alan White A long list of community development and housing activists gathered at the Chicago Fed?s meeting room this morning to testify about the impact of Countrywide Mortgage Company on their communities. After Bank of America?s customary recitation of...
Minnesotans rally for foreclosure moratorium
Posted on April 21, 2008By Alan White Homeowners and activists demonstrated at the Minnesota governor's mansion Saturday to support a statewide 12-month foreclosure moratorium. Governor Pawlenty has threatened to veto the Minnesota Subprime Foreclosure Deferment Act, now pending in the state legislature...
Australian Law School Seeks Consumer Law Professor
Posted on April 21, 2008Here's the announcement: The Griffith Law School is seeking to appoint a leading scholar for a joint position of Professor in the Law School and Director of the Centre for Credit and Consumer Law (CCCL). The Griffith Law School (GLS)...
New HUD Secretary?
Posted on April 18, 2008By Alan White President Bush has announced his nominee to replace Alfonso Jackson as Secretary of the Department of Housing and Urban Development. The nominee's qualifications to run HUD and set the nation's housing policy, including vital issues of FHA...
New Consumer Caucus; Credit Card Hearing
Posted on April 18, 2008Reps. Carolyn Maloney (D-NY) and Keith Ellison (D-MN) launched a new Consumer Justice Caucus on Wednesday. [Weak economy may add appeal to fledgling consumer caucus, The Hill] Senator Carl Levin (D-MI) has an interesting blog post at Talkingpointsmemo...
Response to the Boston Globe on the Student Loan ?Crisis?
Posted on April 18, 2008by Deanne Loonin (Director of the Student Loan Borrower Assistance Project) There are many changes going on in the credit world generally and in the student loan industry more specifically, but the April 17 front page article in The Boston...
Journal of Family and Economic Issues
Posted on April 18, 2008The following papers appear in 29 Journal of Family and Economic Issues Number 2 (June 2008), a thematic issue on consumer financial issues: Lucia Dunn, Guest Editor's Introduction Sumit Agarwal, Souphala Chomsisengphet, and Lawrence Mielnicki, Do Forbearance Plans Help Mitigate...
Your Identity Is Worth $2
Posted on April 17, 2008Apparently there's so much private data on the black market that it's no longer worth much to data thieves. [source: Techdirt]
Hearing on Credit Card Consumer Protections
Posted on April 16, 2008The Financial Institutions and Consumer Credit Subcommittee (Chairman Maloney, D-N.Y.) of the House Financial Services Committee is scheduled to hold a hearing tomorrow titled "The Credit Cardholders' Bill of Rights: Providing New Protections for Consumers...
Marsha Courchane Paper on Explaining the Pricing of Home Mortgage Loans to Minority Borrowers
Posted on April 15, 2008Marsha Courchane's paper The Pricing of Home Mortgage Loans to Minority Borrowers: How Much of the APR Differential Can We Explain? can be found in 29 Journal of Real Estate Research No. 4 (2007). Here's the abstract: The public releases...
McCoy Paper on HMDA's Legislative History
Posted on April 13, 2008Patricia A. McCoy, who has been an important scholar on predatory lending, has authored The Home Mortgage Disclosure Act: A Synopsis and Recent Legislative History, 29 Journal of Real Estate Research No. 4 (2007). Here's the abstract: This article describes...
Credit Card Marketing to College Students
Posted on April 13, 2008Check out this article in today's Washington Post entitled "Majoring in Plastic -- With Easy Access to Credit Cards, Students Pick Up the Debt Habit Early." We blogged last year on U.S. PIRG's counteroffensive to the credit card companies intense...
Product Recall Information for March 2008
Posted on April 11, 2008The Consumer Product Safety Commission's product safety recalls for March 2008 are available here. The National Highway Traffic Safety Administration's auto defect recalls for March 2008 are available here.
Senate bill and moral hazard
Posted on April 10, 2008by Alan White The Senate today passed its version of a housing crisis bill, stripped of most provisions that could help homeowners facing foreclosure. The provision that would have permitted bankruptcy judges to modify interest rates and reduce mortgage balances...
Fed's Mortgage Regulations
Posted on April 10, 2008By Alan White Greetings from ORD! Yes, I'm on American, trying to get to Dallas. TV cameras are everywhere, and I have a bit of time on my hands. HT to the Trib for the photo of our rebooking line....
Mystery Shopping Test on RALs; IRS Comments
Posted on April 09, 2008A new report analyzes the results of a mystery shopping test relating to Refund Anticipation Loans (RALs), entitled "Tax Preparers Take a Bite out of Refunds: Mystery Shopper Test Exposes Refund Anticipation Loan Abuses in Durham and Philadelphia." The mystery...
Times Articles on Mortgage Crisis and Preemption of Drug Product Liability Suits
Posted on April 07, 2008Consumer law issues have frequently appeared on the front pages of the Times in recent weeks, and today's edition has two such articles. In "Drug Makers Near Old Goal: A New Legal Shield," the Times reports on the Supreme Court...
Elizabeth Schiltz Paper on the Supreme Court's Watters Decision
Posted on April 07, 2008Elizabeth Rose Schiltz's paper Damming Watters: Channeling the Power of Federal Preemption of State Consumer Banking Laws, 35 Florida State University Law Review, is available at http://ssrn.com/abstract=1028886. Here's the abstract: In Watters v. Wachovia, 127 S...
The New Century saga
Posted on April 06, 2008The WSJ Law Blog recently reported the release of the Bankruptcy Court Examiner's Report on New Century Mortgage, the subprime lender that once led the market and is now in Chapter 11. The post includes a link to download the...
Second Circuit Rejects Class Certification in "Light" Tobacco Litigation
Posted on April 05, 2008Last Thursday, the Second Circuit issued McLaughlin v. American Tobacco Company, No. 06-4666 (2d Cir. Apr. 3, 2008), reversing Judge Jack Weinstein's certification of a class including virtually all Americans who had purchased cigarettes labeled as "light" or "lights...
The Ninth Circuit Decides Roommates.com -- Is It the Right Decision for Consumers?
Posted on April 04, 2008by Greg Beck and Paul Alan Levy The en banc Ninth Circuit yesterday decided an issue of great importance to consumers on the Internet. The issue: In what circumstances can web site operators that pose discriminatory questions that violate anti-discrimination...
Consumer Lawyer on ABC News
Posted on April 04, 2008ABC News has put together a web page to accompany last night's story featuring Jessica Attie, a legal services lawyer fighting foreclosures in Brooklyn. The message to homeowners -- if you have legal claims, get a lawyer -- has been...
Nifty Subprime Data Maps
Posted on April 04, 2008For state and county-level data, derived from LPI's rich database, on easy-to-use maps, check out the New York Fed's interactive page. You can find information on the percentage of households with subprime mortgages (designated here by the industry-preferred term "nonprime"),...
Texas Supreme Court limits uninsured motorist coverage.
Posted on April 03, 2008In what I find to be a very interesting opinion, but not that surprising, the Texas Supreme Court has supported the insurance industry's position that uninsured motorist coverage doesn?t cover a collision with just part of a motor vehicle. In...
Mortgage broker compensation
Posted on April 01, 2008The incentives created by mortgage broker compensation structures, such as yield spread premiums, have been blamed for contributing to the reckless lending in the subprime mortgage market. The Treasury Department and Federal Reserve proposals, as well as various bills in...
Blueprint for Regulating Financial Services Released
Posted on March 31, 2008The Bush Administration's Blueprint for Modernized Financial Regulatory Structure, released today, includes a proposal to consolidate consumer protection into a single federal agency. The press release provides a link to the full 218-page Blueprint. Although I have not digested the...
Fed Hearings on Countrywide merger
Posted on March 30, 2008The Federal Reserve has announced public hearings in Chicago and Los Angeles on Bank of America's acquisition of Countrywide. The Fed will consider the public benefits and adverse effects of the merger as well as the Community Reinvestment Act performance...
PIRG Report on On-Campus Credit Card Marketing
Posted on March 29, 2008Over at U.S. PIRG's Consumer blog check out this comprehensive post about PIRG's new report on marketing of credit cards on college campuses. The post links to a number of useful items, including the report itself, which you can also...
Fitch Ratings: HOPE NOW not working
Posted on March 28, 2008In a report dated March 25, 2008 (login required), Fitch Ratings has again revised (upward) its estimates of foreclosures and losses for subprime mortgages made in 2006 and 2007. The news is not good. Fitch reports that fewer homeowners who...
Arnold S. Rosenberg Paper Comparing Regulation of Unfair Bank Fees in the US and EU
Posted on March 27, 2008Arnold S. Rosenberg has written Regulation of Unfair Bank Fees in the United States and the European Union: Current Trends and a Proposal for Reform, AN EVALUATION OF LEGISLATION REGARDING COMMERCIAL PRACTICES AND CONSUMER CREDIT IN THE EUROPEAN UNION, Bank...
ABA Antitrust Section Consumer Protection Roundup
Posted on March 27, 2008Rebecca Tushnet of 43(B)log has a detailed consumer protection roundup from the spring meeting of the ABA's Antitrust Section.
Obama on foreclosures
Posted on March 27, 2008Senator Obama gave a speech this morning in New York with his views and proposals on the foreclosure crisis. The advance text is available here (login may be required). It will probably be posted on the campaign web site soon....
Foreign Courts Wary of U.S. Punitive Damages
Posted on March 26, 2008The New York Times reports that Italy?s Supreme Court has refused to enforce a U.S. punitive damage award, finding that ?a peculiarity of American law ? punitive damages ? was so offensive to Italian notions of justice that it would...
Paper on Google and Privacy
Posted on March 26, 2008Omer Tene of the College of Management - School of Law, Israel, has written What Google Knows: Privacy and Internet Search Engines, available at http://ssrn.com/abstract=1021490. Here's the abstract: Search engines are the most important phenomenon on the Internet today and...
Elizabeth Renuart and Diane Thomspon Paper on APR Disclosure
Posted on March 25, 2008Elizabeth Renuart and Diane E. Thompson of NCLC have written The Truth, the Whole Truth, and Nothing But the Truth: Fulfilling the Promise of Truth in Lending, available at http://ssrn.com/abstract=1021318. Here's the abstract: Evaluating the cost of credit and comparison...
What Would Senators McCain, Clinton and Obama Do?
Posted on March 25, 2008In a speech delivered today in Orange County California (ground zero for many subprime lenders as well as foreclosed homes) Senator McCain offered some details of his plan to deal with the foreclosure crisis. Rather than spin the speech, I...
Paper on Enforcement of Consumer Law in the US and EU
Posted on March 24, 2008Fabrizio Cafaggi and Hans-W Micklitz, both of the European University Institute - Department of Law, have written Administrative and Judicial Collective Enforcement of Consumer Law in the US and the European Community, available at http://ssrn.com/abstract=1024103...
Law Firm Incentives to Avoid Foreclosure
Posted on March 24, 2008In an interesting story today, the Philadelphia Inquirer reports on an initiative by Fannie Mae & Freddie Mac to provide foreclosure firms with financial incentives to negotiate repayment plans and loan modifications, instead of foreclosing. Fannie Mae reportedly is willing...
Borrowing Upswing May Extend to Payday Loans
Posted on March 24, 2008Last week I blogged on Federal Reserve Board numbers showing a large upturn in credit card borrowing last January. This morning Reuters is reporting annecdotal evidence of equally troubling growth in payday lending. Here's the Reuters lead: "As hundreds of...
Something Special for Anyone Teaching or Interested in Teaching Consumer Law.
Posted on March 24, 2008If you are currently teaching or want to teach consumer law, full-time or as an adjunct, the Center for Consumer Law at the University of Houston Law Center has a Conference just for you. On May 23 and 24th, more...
Paper Comparing US and European E-Commerce Protections
Posted on March 23, 2008Michael L. Rustad of Suffolk has an article titled Circles of E-Consumer Trust: Old E-America v. New E-Europe in the Michigan State University College of Law Journal of International Law, available at http://ssrn.com/abstract=1023659. Here's the abstract: Robert Kagan's article in...
Journal of Consumer Affairs Call for Papers on Privacy
Posted on March 22, 2008The Journal of Consumer Affairs plans a special issue on Privacy Literacy -- How Consumers Understand and Protect Their Privacy. Here is the Call for Papers: Special Issue Guest Editors Jeff Langenderfer Anthony Miyazaki Meredith College Florida International University Consumers...
It's Time for Another National Commission on Consumer Finance
Posted on March 20, 2008Back in 1968, Congress created a bipartisan National Commission on Consumer Finance. See Pub. L. No. 90-321. The Commission reported and went out of business. It's probably fair to say that the Consumer Credit Protection Act would be a very...
Costs and Benefits of Subprime Lending
Posted on March 20, 2008By Alan White The new paper by Todd Zywicki and Joseph Adamson reasserts the received wisdom that subprime mortgage lending had significant consumer welfare benefits, specifically that it increased homeownership and provided access to credit to previously excluded groups...
Huge Upswing in Credit Card Borrowing
Posted on March 19, 2008New fed numbers are out showing Americans sucked down 6.9 billion dollars in new credit card debt, increasing outstanding consumer credit to $2.52 trillion during the month of January. This increase was double the $3.7 billion increase in the previous...
The Law and Economics of Subprime Lending
Posted on March 19, 2008Todd Zywicki and Joseph Adamson of George Mason have a new article at SSRN offering a conservative law-and-economics take on the subprime mortgage lending crisis. After a lot of back and forth, the paper's basic point is that policymakers shouldn't...
Alan Greenspan's The Age of Turbulence
Posted on March 19, 2008In my post of yesterday, drawn from the Pittsbugh Post-Gazette essay, I mentioned how Alan Greenspan's book, The Age of Turbulence, doesn't address predatory lending. In fact, readers searching for references to the many consumer law statutes the Fed interprets...
We Need a Single Agency to Regulate Consumer Credit Transactions
Posted on March 18, 2008Today's edition of the Pittsburgh Post-Gazette has an essay I wrote which they gave the headline "The Private Sector: U.S. Needs Agency to Watch Consumer Credit." It appears below. In the version below, I reinserted, in brackets, a sentence that...
Bushvilles springing up
Posted on March 18, 2008The Consumerist today features a BBC video making the rounds of the blogosphere. The video reports on tent cities springing up in Southern California, occupied by former homeowners, victims of the foreclosure crisis. Another video report on the phenomenon is...
From the Consumerist: "Credit Card Victims Muzzled"
Posted on March 17, 2008On Friday, Alan White posted here about Congress's unusual demand that four consumers waive their rights to privacy in their financial histories before being allowed to testify before the House Financial Services Committee on the abusive credit card practices that...
Supercapitalism
Posted on March 17, 2008I recently finished Robert B. Reich's fascinating book Supercapitalism. Reich, who served in the Clinton cabinet, pulls together a number of themes into a coherent, and depressing, whole. He argues that the marketplace is far more competitive than it once...
Due Diligence Disregarded
Posted on March 17, 2008Scott Reckard of the LA Times just wrote an excellent investigative report on due diligence, or the absence of it, in the securitization of subprime mortgages. He interviewed former employees of Clayton Holdings and Bohan Group, companies hired by securities...
What Happened to the Arbitration Clauses in the Subprime Litigation?
Posted on March 16, 2008Last week, Alan blogged here about the Navigant Consulting Report on suits by consumers, among others, against subprime lenders. The Times covered the report today in an article here. I'm wondering how borrowers have been able to file these suits....
Shmuel Becher Papers on Consumer Contracts
Posted on March 15, 2008Shmuel I. Becher has two papers on consumer contracts. One is Behavioral Science and Consumer Standard Form Contracts, 68 Louisiana Law Review, available at http://ssrn.com/abstract=1016002. Here's the abstract: Asymmetric information is a serious threat to the market of consumer standard...
Richard "Dickie" Scruggs Pleads Guilty To Federal Crime
Posted on March 14, 2008Well-known Mississippi plaintiffs' lawyer Richard "Dickie" Scruggs has pleaded guilty to a federal crime arising from a November 2007 indictment alleging that Scruggs bribed a state court judge. The Jackson, Mississippi Clarion-Ledger reports on the story here...
Frank proposes FHA short refi bill
Posted on March 14, 2008Congressman Barney Frank, Chair of the House Financial Services Committee, has announced a mortgage rescue plan: a bill to permit FHA to insure refinance mortgages. The discussion draft is available here. FHA would insure new mortgages for up to 90%....
New HUD Mortgage Disclosure Rule Out
Posted on March 14, 2008HUD published its long-awaited RESPA mortgage disclosure rule in today's Federal Register. The proposed rule includes new model forms to be provided to consumers buying or refinancing a home. This proposal, in the works for years, aims to provide mortgage...
Times Articles on Subprime Crisis, Debt Collection, the CPSC Bills, Reverse Mortgages, and Online Privacy
Posted on March 14, 2008I've accumulated a huge backlog of recent Times articles on consumer law issues, so here goes an attempt to reduce the backlog. Many of the articles involve the mortgage crisis and plans to do something about it. For example, the...
Congress abuses consumers' privacy
Posted on March 14, 2008Many CL&P readers no doubt read Credit Slips regularly, but those who don't should read this post by Professor Warren. At a House Subcommittee hearing on credit card abuses and the credit card holder's bill of rights legislation, four consumers...
Wright Paper on Behavioral Law and Economics and Consumer Contracts
Posted on March 13, 2008Joshua D. Wright of George Mason has an article in 2 NYU Journal of Law & Liberty, Behavioral Law and Economics, Paternalism, and Consumer Contracts: An Empirical Perspective, available at http://ssrn.com/abstract=1015899. Here's the abstract: Modern legal scholars frequently and increasingly...
Matt Edwards Paper on the FTC's Use of Behavioral Law and Economics
Posted on March 12, 2008Matt Edwards's article, The FTC and the New Paternalism, can be found at http://ssrn.com/abstract=1014652. Here's the abstract During the past decade, we have witnessed a renaissance of paternalism in legal scholarship fueled by the rise of behavioral law and economics...
Intellectual Property Bullies -- This Time It Is the Grinch
Posted on March 12, 2008Dr. Seuss ?- or, at least, the lawyers for his estate -- are at it again. The victim this time is Teamsters for a Democratic Union, which put articles on its web site and in its newspaper that portrayed Teamster...
Subprime: the Lawsuits
Posted on March 11, 2008By Alan White Borrower class actions comprised 43% of subprime mortgage litigation filed in federal courts in 2007 according to a new report from Navigant Consulting, based on a survey of 278 cases. Other categories included securities investor claims (22%),...
Angela Littwin Paper on How Low-Income Borrowers Respond to Restraints on Credit Card Use
Posted on March 10, 2008Angela K. Littwin of Harvard has written a paper, Testing the Substitution Hypothesis: Would Credit Card Regulation Force Low-Income Borrowers Into Less Desirable Lending Alternatives?, available at http://ssrn.com/abstract=1014460. Here's the abstract: One of the strongest arguments against regulating credit cards...
Engel & McCoy Paper on Improving Sustainability of Minority Homeownership
Posted on March 09, 2008Two leading writers on predatory lending, Kathleen C. Engel and Patricia McCoy have written a paper titled From Credit Denial to Predatory Lending: The Challenge of Sustaining Minority Homeownership, available at http://ssrn.com/abstract=1011489 Here's the abstract: Years of discriminatory behavior against...
David Adam Friedman Article on Free Offers
Posted on March 07, 2008David Adam Friedman's article, Free Offers: A New Look, to appear in the New Mexico Law Review, is available at http://ssrn.com/abstract=1010238. Here's the abstract: Free offers - the practice wherein firms market goods and services by claiming that they are...
Senate Passes Consumer Product Safety Bill
Posted on March 07, 2008This Washington Post article reports that S. 2663, The CPSC Reform Act, was passed by the U.S. Senate by an overwhelming 79 to 13 margin. The beginning of the Post article provides a synopsis: The Senate yesterday approved the most...
Fed Credit Card Rule update
Posted on March 05, 2008At today's Consumer Advisory Council meeting, Federal Reserve Board staff provided a bit more information on the news that the Fed will regulate abusive credit card practices. A proposed rulemaking will be published in the Federal Register, perhaps in April...
Mortgage standards improving?
Posted on March 05, 2008Has the mortgage market self-corrected by tightening up underwriting? Not according to blownmortgage.com. In this post, the author describes lender junk mail aimed at brokers, touting aggressive undewriting, no-doc loans and other questionable practices.
Consumer Product Safety Commission Legislation Moves Toward Senate Vote
Posted on March 05, 2008Over at U.S. PIRG's consumer blog, there's a running description of the progress of a consumer product safety bill pending before the Senate. That bill -- S. 2663, the CPSC Reform Act -- would, among many other things, provide more...
Important NCLC Report on Student Loans
Posted on March 04, 2008The National Consumer Law Center has just issued this comprehensive 48-page report on private student loans entitled ?Paying the Price: The High Cost of Private Student Loans and the Dangers for Student Borrowers.? The report finds "that private student loans...
Desparately Seeking Data
Posted on March 04, 2008By Alan White Unlike many other economic indicators, foreclosures are not surveyed or reported by the Federal Reserve, the Bureau of Labor Statistics, or any government agency. Trying to measure the extent of the problem requires Google skills and detective...
ISP's Standing Up for Their Customers -- or Not
Posted on March 03, 2008by Paul Alan Levy Last week I posted about the problem of an Internet Provider, Dynadot, that rolled over when the target of postings on the web site of one of its clients filed suit (in the now-notorious Wikileaks case)....
Victory in Wikileaks Case!
Posted on February 29, 2008On Wednesday, Paul Levy posted about some of the consumer law implications of the Wikileaks controversy, a case in which a California federal judge issued an order shutting down a website for leaked documents exposing corporate and governmental misconduct...
Industry and Republican Allies Gear up to Fight Moderate Consumer Health and Safety Bill
Posted on February 29, 2008by David Arkush and Graham Steele Republicans and Democrats in the Senate recently spent weeks negotiating a moderate, bipartisan consumer product safety bill, the ?CPSC [Consumer Product Safety Commission] Reform Act of 2007? (S. 2663). After these negotiations concluded, and...
Anheuser-Busch and Miller continue down their deadly path
Posted on February 28, 2008I?ve previously written about the reprehensible practice of Miller Brewing and Anheuser-Busch in spiking malt beverages with stimulants flavoring them in a way that attracts young drinkers. Today, CSPI announced that we have served formal notices of intent to sue...
Fed to Curb Credit Card Abuse
Posted on February 28, 2008Here are the last two sentences of Chairman Bernanke's testimony in Congress yesterday: "Separately, we are actively reviewing potentially unfair and deceptive practices by issuers of credit cards. Using the Board's authority under the Federal Trade Commission Act, we expect...
Of Bailouts and Rescues
Posted on February 28, 2008By Alan White Today's Wall Street Journal reports that Treasury Secretary Paulson, on behalf of the Bush Administration, categorically rejects any plan to "bail out" homeowners facing foreclosures with federal dollars, displaying a remarkable blind faith in the unregulated market...
New Hoofnagle Piece on Identity Theft
Posted on February 27, 2008Chris Hoofnagle of Berkeley has been an important theorist on identity theft. He has a new piece out attempting to implement his theories. Here's the abstract: There is no reliable way for consumers, regulators, and businesses to assess the relative....
Advocate's view on HOPE NOW hotline
Posted on February 27, 2008By Alan White Last week, the Wall Street Journal ran an article about the HOPE NOW foreclosure help hotline. HOPE NOW is an alliance of six large mortgage servicers, mortgage and securities industry trade groups, Neighborworks, the Homeownership Preservation Foundation...
Be Careful in Choosing Internet Providers -- Will They Defend Your Privacy?
Posted on February 27, 2008by Paul Alan Levy Public Citizen jumped into a case where a federal judge in San Francisco tried, albeit without success, to shut down the entire Wikileaks web site, based on a claim by a Swiss bank that among the...
Freeze on Fremont Foreclosures (in Massachusetts)
Posted on February 27, 2008by Alan White Massachusetts Attorney General Martha Coakley persuaded a judge to order a 90-day statewide halt to foreclosures by Fremont Investment and Loan, so that Fremont could work out some of the defaults with borrowers. The press release includes...
Consumer Protection and Law Students
Posted on February 26, 2008Here comes a self-serving post. In my view, legal education raises significant consumer issues for its chief consumers, students (you could argue that the clients that retain the services of law school graduates are also consumers of legal education, but...
Fitch projects 50% foreclosure rate
Posted on February 26, 2008By Alan White In a new presentation entitled Update on U.S. RMBS, Performance, Expectations, Criteria, Fitch Ratings now projects that 50% of the subprime mortgages from the fourth quarter of 2006 in rated securitizations will end in foreclosure. They also...
Table of Contents for the Forthcoming Issue of the Journal of Consumer Affairs
Posted on February 25, 2008Here is the table of contents for for the forthcoming Spring 2008 issue of Journal of Consumer Affairs (Volume 42, Number 1 ): 2008 Distinguished ACCI Fellows Editorial Prelude: Remembering Luminary Leaders Stewart M. Lee and E. Scott Maynes Brenda...
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