Consumer Law & Policy Blog

Transcript of Oral Argument in Riegel v. Medtronic

The Supreme Court heard oral argument today in Riegel v. Medtronic, Inc., concerning whether federal medical device law preempts certain kinds of state-law damages suits.  Here's the oral argument transcript.

The Loans are Subprime, Not the Borrowers

By Alan White

The Wall Street Journal has a story today confirming that nearly half of homeowners with subprime mortgages could have qualified for prime-rate loans. While many of us have pointed this out before, the WSJ analysis, based on the best loan database available, shows how much the steering problem has worsened in the last three years. One industry response is that a 620 credit score is a bit low as a definition of a prime borrower. But even if you set the bar higher, 40% of subprime borrowers were over 640 FICO, and 30% were over 660. There is no getting around the fact that the mostly unregulated subprime market is neither efficient nor fair, and is costing homeowners billions in excess interest costs, quite apart from the devasting cost of foreclosures.

The dramatic contraction in the subprime mortgage market undoubtedly has a human toll, for the workers in the housing and mortgage industries who are losing income and jobs. On the other hand, the rapid expansion to the point where $600 billion in subprime loans were made in 2006 has done many consumers (and lately, investors) more harm than good. Hopefully this debacle can lead to the emergence of a smaller subprime market offering regulated, tailored products to the small group of homeowners with marginal credit who can benefit from buying or refinancing a home.

Washington Post Articles on Proposed Legislation to Curb Credit Card Fees and a Possible Deal to Address Subprime Lending Mess

Today's Washington Post has two articles that are worth a look.

Here's one on planned legislative and regulatory efforts regarding credit card fees.  The first couple sentences of the article provides a flavor: "Senior Democrats on Capitol Hill want to ban excessive credit card fees. Bank regulators are on the verge of forcing companies to give more notice before raising interest rates. And New York's attorney general, whose investigations transformed the student loan industry, now has his eye on conflicts of interest in the credit card sector."  On the latter, the NY AG is looking into "arrangements in which companies that supply electronic cards used to pay for purchases at bookstores and cafeterias are granted exclusive access to market their card products to students."

And here's an article describing an almost-consummated agreement "between top Bush administration officials and a broad alliance of Wall Street's biggest banks, mortgage investors, nonprofits and consumer groups," under which "mortgage rates for homeowners with spotty credit histories would be temporarily frozen . . .."

Riegel v. Medtronic To Be Argued To The Supremes On Tuesday

Riegel v. Medtronic, Inc. -- which presents the question whether federal pre-market approval of a medical device preempts state-law damages suits premised on defects in the design and labeling of that device - - will be argued this coming Tuesday, December 4, before the U.S. Supreme Court. This post provides links to all of CL&P's information on this important case. Friday's Law.Com has this article about the case. Here are the plaintiffs' Supreme Court briefs. Here is the defendant's brief. Check back here after the argument for a link to the oral argument transcript.