CL&P Blog

Mark Budnitz on the Development of Consumer Protection Law

Mark Budnitz has posted The Development of Consumer Protection Law, the Institutionalization of Consumerism, and Future Prospects and Perils, 26 Georgia State Law Review 1147 (2010) to the web.  Here is the abstract:

The article examines major developments in the statutes, regulations and Supreme Court cases that have regulated consumer financial services since 1969. Major victories and defeats in the battle for laws protecting consumers are described. Consumer protection law is analyzed within the context of consumerism and its role as a movement for social change and law reform. The article describes the development of a permanent organizational structure for engaging in consumer law reform. This development has resulted in the institutionalization of consumerism and its values have become embedded in society’s values, better ensuring its survival. Finally, the article explores the prospects of the continued development of strong consumer protection law and the perils it faces in the future.

Consumer Reports Exhibit/Annual Meeting

Guest Post from Norm Silber of Hosfstra:

Many of those who visit the CL&P blog may already know that Consumers Union was founded in 1936, and that this year marks its 75^th Anniversary.  If anyone is in the vicinity of Grand Central Station on Friday, Oct. 28, 2011  (8AM-6PM), or Saturday, October 29, 2011 (9AM-4PM), I’d like to recommend a visit to a special Anniversary exhibition about its past, present and future, mounted  in Vanderbilt Hall of Grand Central.  And in case anyone is interested, the Annual Members’ meeting is also being held that Saturday morning; instead of being held in the Yonkers Headquarters it will also be held  at Grand Central Station.  All those who subscribe to Consumer Reports publications are welcome and it is usually fun and educational to explore the organization’s advocacy and testing.  Further questions:  914 378-2000.

Moving on to the CFPB

Dear Consumer Law & Policy Blog readers,

In September 2006, Jeff Sovern and I decided to start this blog as co-coordinators -- an outgrowth of a discussion we had at Richard Alderman's consumer law conference at the University of Houston Law School.  As we explained in our first post, we had in mind a group blog, with diverse contributors from both practice and academia, covering everything from the latest Supreme Court cases and law review articles to legislative battles, news coverage of consumer law, and more.

For me, running the blog has been a great way to help myself stay on top of the issues, despite a busy litigation practice, and learn what's going on in the wide world of consumer law and policy.  We've covered the foreclosure crisis, the battle over class-action bans in the courts, the enactment of the Dodd-Frank Act, and much much more.  I'm always surprised and pleased when someone at a legal conference comes up to me and tells me that they read the blog every day.

Sadly, today is my last day at Public Citizen and therefore my last day as a co-coordinator of this blog.  Starting Monday, I will be joining the General Counsel's office at the new Consumer Financial Protection Bureau.  I'm looking forward to the challenge of helping to build a new consumer agency from scratch, but sorry that I'll have to leave extracurricular activities like blogging behind.

The blog, however, will go on. Jeff will stay on as coordinator and will be joined by Greg Beck and Brian Wolfman, who already posts up a storm.  I look foward to reading the blog from my post at the CFPB.

So long,

Deepak Gupta

Paper on the History of Credit Reporting

Kenneth Lipartito of Florida International University has written The Narrative and the Algorithm: Genres of Credit Reporting from the Nineteenth Century to Today.  Here's the abstract:

Credit reporting is a contested process whereby parties with distinct interests (borrowers, lenders, and intermediaries) jointly construct the form, method, and style of credit assessment. In contrast to theories that argue information should grow more secure and credit relationships more transparent over time, the conflicted struggle over representation produces different styles or “genres” of credit evaluation that are compromises between the interests of the different parties. Thus, in the United States, trade credit reporting in the nineteenth century evolved an enduring narrative reporting style, incorporating heterogeneous forms of information not easily reducible to a single quantitative score. Lack of institutions for sharing information between creditors, legal precedents, and strong resistance among borrowers to overly intrusive surveillance made the narrative report the best means to handle the diverse business credit market. By contrast, lenders in the consumer credit market established information sharing capabilities, which were enhanced after World War II when banks developed the credit card and card verification systems. Fair credit laws in the 1960s and 70s actually reinforced the move to quantitative scoring based on information shared among creditors, eventually institutionalizing the FICO score as the prime method of consumer credit evaluation.

Georgia State University Law Review Articles on Consumer Law

Longtime consumer law professor Mark Budnitz's home law review, Georgia State University Law Review, has published a quintet of consumer law articles, including an article by Mark himself, The Development of Consumer Protection Law, the Institutionalization of Consumerism, and Future Prospects and Perils.  The others include Kathleen E. Keest, Consumer Financial Services Law and Policy: 1968-20?? In the Thick of the Battlefield for America's Economic Soul; Alvin C. Harrell, The Great Credit Contraction: Who, What, When, Where and Why; and Fred Miller, Prime Interest Rates for Subprime Borrowers?.   I could find only one on the web, a piece by Peter A. Alces of William & Mary and Michael M. Greenfield of Washington University, titled They Can Do What!? Limitations on the Use of Change-of-Terms Clauses, with the following abstract:

Almost every contract that calls for ongoing services to consumers contains a provision that authorizes the provider of those services to modify the contract at any time, without any constraint on the modification. With some exceptions, the courts have not been very responsive to arguments that seek to enforce constraints on the provider’s discretion. In the recently enacted Credit CARD Act, Congress has declared that there are indeed some limits on the changes that may be made to one kind of ongoing consumer contract, viz., a contract to provide open-end credit. In this article, to be published in a forthcoming symposium issue of the Georgia State Law Review, we review several statutory rules and common-law doctrines that suggest limits, applicable to all kinds of consumer contracts, on the freedom of service providers to change the terms of the contract  

The articles appear in volume 26, number 4.

"Did a Lack of Consumer Protection Cause the Financial Crisis?"

Tomorrow at noon, the Cato Institute's Policy Forum will host what promises to be an interesting and lively  debate over that question, featuring Janis Bowdler, National Council of La Raza; Thomas Durkin, Former Economist, Federal Reserve Board; Ed Mierzwinski, U.S. PIRG; and Todd Zywicki, George Mason University School of Law. Moderated by Mark A. Calabria, Director, Financial Regulation Studies, Cato Institute.

Here's Cato's official description, which uses the term "consumer protection" in scare quotes:

There is likely no issue more contentious in the debate over the causes of the recent financial crisis and the appropriate response other than "consumer protection." The question of whether credit was too cheap or too expensive (or predatory) is at the heart of the differing narratives of the crisis. Panelists will examine these opposing narratives and debate the merits and substance of proposed consumer protections in our financial markets, including the creation of a Consumer Finance Product Agency.

If you can't make it over to Cato's Dupont Circle headquarters, you can watch it live online.

Ralph Nader: The Movie

    The documentary on the life of Ralph Nader -- An Unreasonable Man -- is opening in cities around the country over the next couple months.  To see a schedule of openings and a raft of information on the movie, go the movie's website.

Father Robert Drinan and His Role in Consumer Justice

    by Willard Ogburn

    [Introductory note:  Will Ogburn, the Executive Director of the National Consumer Law Center, recently penned this inspirational memorial to Father Robert Drinan.  Jeff Sovern referred to the memorial in a recent post.  We asked Will if we could post the memorial on the blog, and Will graciously agreed.]

    NCLC founder and friend Father Robert Drinan died over the weekend at age 86.  Nationally, you may recall that during his tenure in Congress  he was one of the House's most principled congressmen, human rights activists, and Vietnam war protesters.

    NCLC valued him as a man of vision and courage who helped found and form the Center in the late 1960s and early 70s.  More recently he was pleased to serve as Honorary Chairman of our Partners Committee.

    When NCLC was created in the earliest days of the War on Poverty under President Lyndon Johnson, it was one of the first national support centers formed to help legal services attorneys, and it was formed at Boston College Law School while Father Drinan was its Dean. When I would talk with Father Drinan in later years, he would always point out with pride that he started NCLC. He was chagrined that NCLC left Boston College (a fact he blamed on BC's pressing demand for too large a share of our budget), but clearly took great pleasure in the fact that the Center had grown in stature and effectiveness over the years as a voice for low income consumers, and even thrived out from under the legal services umbrella. He treasured it as a significant part of his legacy.      

Founders of Consumer Law Institutions

The death of Father Robert F. Drinan has been widely reported (The New York Times obituary is here.) What is less well known (at least by me, until I read Willard Ogburn's moving tribute) is that while serving as dean of Boston College's law school, he founded the National Consumer Law Center.  He also played a part in creating the Legal Services Corporation.

In addition, a new documentary, "An Unreasonable Man," examines the legacy of Ralph Nader.  The Times review is here.