Consumer Law & Policy Blog

Interagency Proposal for Model Privacy Forms under the Gramm-Leach-Bliley Act

by Jeff Sovern

I have previously blogged here about the 2006 amendment to the Gramm-Leach-Bliley Act, which added a new subsection (e) to 15 U.S.C. § 6803, directing federal regulators to develop a model disclosure form for financial institutions to send customers explaining their privacy rights, including the right to opt out of the sharing of customer information.  Now eight government agencies have banded together to propose model forms and solicit comments on them.  The model forms, together with explanatory material, appear here.  The proposed model forms seem to be a substantial improvement over the disclosure forms I've seen up to now; it will be interesting to see the extent to which financial institutions use them and how consumers react to them.  One ironic commentary on the price of simplicity: the proposal, request for comments, and supporting materials (as distinct from the forms themselves) run 149 pages.

Fast Credit Getting Faster

by Chris Peterson

Finish consumers can now obtain high-interst rate loans through text messages on their cell phones. The entire loan application and approval takes only minutes. National Public Radio ran an interesting story on this type of lending earlier today. One can imagine the sort of heartache this will create for people (and families of people) with impulse control problems: gamblers, alcoholics, drug addicts, and compulsive shoppers beware.

Google Makes Privacy Improvements, But Is It Enough?

by Greg Beck

Google announced last week a new policy designed to help protect the privacy of its users.  Google will continue to store usage history, but it will "anonymize" its server logs after 18-24 months so that particular data can no longer be linked to individual users.

Google could have gone a lot further.  Keeping the data for 18-24 months seems like a long time when something like 30 days or less may be sufficient.  Moreover, Google has argued that keeping personally identifying information helps it provide services to its users, but those users who value privacy over the additional services should have a way to opt out of the data collection. 

Still, criticism of Google's decision conceals the fact that it has gone a lot further than other Internet companies.  Yahoo!'s privacy policy, for example, states that the company will save your IP address and the pages that you view without promising to delete or anonymize this information at any time in the future.  Amazon.com says it stores your IP address and other information, including which books you looked at on the site.  There is no reason why Amazon needs to keep databases with the books you looked at years ago.

Google's first step may be tentative, but hopefully it will spur other companies to examine their privacy policies as well and ask themselves whether they really need to keep all that private data.

Freezing of Exempt Funds

The Christian Science Monitor has an article here about the freezing of exempt funds in bank accounts, the problems the practice causes for consumers, and the resulting legal issues. (Disclosure: the article quotes my colleague, Professor Gina Calabrese).

Another Week, Another Ninth Circuit CAFA Ruling

Brian Wolfman

It appears that the Ninth Circuit has a rule requiring it to issue at least one decision about the Class Action Fairness Act every week.  I recently blogged here and here on new Ninth Circuit CAFA decisions, the latter of which (Progressive West v. Preciado) addressed when a post-CAFA amendment to a pre-CAFA state-court complaint “relates back” to that complaint.  In its most recent decision, McAtee v. Capital One, No. 07-55065 (9th Cir. Mar. 16, 2007), the Ninth Circuit expounded on Preciado and held that any amendment to an original class action complaint filed in California state court, whether to add new causes of action, to add or replace plaintiffs, or to add or replace defendants, does not change the commencement date of the action for CAFA purposes, which is the date the original complaint was filed.  That holding arguably goes beyond the ordinary scope of the relation-back doctrine.  Cf. Fed. R. Civ. P. 15(c)(2) and (3).  The Ninth Circuit’s relation-back holding was based on California procedural  law, which the Ninth Circuit said it was required to apply under Erie.  Cf. Fed. R. Civ. P. 15(c)(1).

Retailers Demanding Thumbprints: A New Trend?

BoingBoing has the story of a car dealership that refused to sell a car without first taking the buyer's thumbprint.  The story also links to a Consumerist post about banks with the same policy.  One of the banks apparently cited the Patriot Act for its requirement of demanding a customer's thumbprint before cashing a check.

Is this a new privacy problem in the making?

New Predatory Lending Legislation a Possibility

Yesterday's New York Times reports that Congressional Democrats are contemplating new predatory lending legislation.  Representative Barney Frank, chair of the House Financial Services Committee, plans to move a bill that "would give borrowers and others the ability to sue the Wall Street firms that package those mortgages and then sell them as mortgage-backed securities, as well as the purchasers of those securities in the secondary market" while Senate Democrats, including Senators Dodd and Schumer, are also looking into the matter.  I wonder if Congress will consider eliminating the authority of federal regulators to preempt state predatory lending statutes as to federally-chartered and regulated financial institutions.

Comparative Consumer Insolvency Conference Schedule Released

by Christopher Peterson

Earlier this week the Law and Society Association released the program for an upcoming conference entitled "Compartive Consumer Overindebtedness". (See: Download ls_berlin_conference_program.3-15-07.rtf ) The meeting, organized by the steady hand of Bill Whitford (U.of Wisconsin), along with Johanna Niemi-Kiesilainen (Umeå University) and Iain Ramsay (Osgood Hall), is part of the Law and Society Association’s annual meeting scheduled for Berlin later this summer. The meeting will include presentations by approximately forty different consumer law scholars from all around the world. A quick glance at the program suggests the meeting is likely to produce one of the more interesting intellectual discussions of consumer credit policy in several years.

The “Check Float” Is On Its Way Out

By Brian Wolfman

You probably take advantage of the “check float” from time to time; I know I do.  That’s the idea that you can write a check when there are insufficient funds in your checking account and then deposit money in the account in the next few days, before the check clears, without worrying about bouncing your check.

You may not want to do that anymore.  I was surprised to read in Michele Singletary’s article in today's Washington Post that the “check float”  is on its way out.  Beginning tomorrow, banks can  use new technology that will clear the check -- that is, take the funds out of your account and make them available to the payee -- almost immediately and definitely by the next day.  Singletary explains that this change will not occur on an industry-wide basis overnight because the necessary technological systems and legal protections are not fully in place.

This change will have some advantages to consumers, including when dealing with a payee who will not consummate a transaction until the consumer’s check has cleared.  It may reduce the need in some circumstances for certified checks or money orders.  And retailers will like the new regime, as they will have use of your money sooner.  In any event, beware: The “check float” will become a thing of the past.  Singletary’s article explains the technology that will make this happen.  Definitely worth reading.

Nightline To Tackle Debt and Credit Issues Tonight

The coalition Americans for Fairness in Lending has kicked off its campaign to increase public awareness about debt and credit issues and to set the stage for legislation that will protect consumers' rights.  During AFFIL's kick-off event in New York last week, ABC's NightLine asked to interview AFFIL for one of its shows. That afternoon, James Scurlock, the writer and producer of the movie Maxed Out, and Professor Elizabeth Warren of Harvard Law School were filmed. Our sources tell us that NightLine will run the show this evening. (Thanks to Charles Delbaum of NCLC for the tip.)