Consumer Law & Policy Blog

Consumer Law Conference is just one month away

Next 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 or Law School level, you should find this Conference of interest. The Conference runs from May 23rd to the 24th, and more than 30 experts from around the world will discuss issues of importance to any consumer law professor. “Teaching Consumer Law—The Who, What, Where, Why, When and How,” will look at issues such as: what materials should be used; alternative methods of teaching; new developments in consumer law; innovative ways to look at traditional consumer problems; global approaches to consumer regulation; and how consumers can collect attorneys’ fees. On Saturday, a special session will be held exclusively for those who are interested in getting that first teaching position, either full-time or as an adjunct. The Houston Astros will also be in town and all Conference participants are invited to see them play the Philadelphia Phillies. For more information and a registration form, visit  http://www.law.uh.edu/ccl/ or feel free to give me a call at 713-743-2165.

Fed Meeting on Mortgage Mega-Merger

By 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 its community lending, philanthropic activities and employee volunteerism, Rev. Jesse Jackson was the first public witness to take the microphone.

Rev. Jackson described Countrywide, the largest mortgage lender in the U.S., as a symbol of the foreclosure crisis, Wall Street greed and the steering of minority homeowners to high cost loans for profit, a lending model he characterized as thievery and thuggery. He spoke of the serious impact the crisis is having on cities and neighborhoods, causing property tax shortfalls and cuts in local government services like education. Neither supporting nor opposing the BofA-CW merger, Reverend Jackson urged the Fed to demand answers from BofA to specific questions regarding CW’s portfolio of foreclosures. He urged the Fed to insist on a halt to CW foreclosures and a serious commitment by BofA to convert unsafe subprime loan products to 30-year fixed-rate amortizing, affordable mortgages.

Australian Law School Seeks Consumer Law Professor

Here'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) is one of the leading law schools in Australia. It has a strong commitment to critical legal education and socio-legal research. It houses the Socio-Legal Research Centre (SLRC), Australia’s leading cluster of critical, theoretical and socio-legal scholars. The GLS has undergraduate campuses at Nathan and the Gold Coast and a postgraduate campus at South Bank in Brisbane. The successful candidate will be expected to play a leadership role in the Law School and the SLRC.

The CCCL is an independent, not for profit academic centre positioned within the GLS. Its purpose is to undertake research into credit and consumer related issues and to disseminate knowledge from that research to promote legislative and policy reforms and increase community, government and business awareness of credit and consumer issues. Applicants must have the leadership skills necessary to expand the CCCL’s activities and ensure a solid funding base; an international research reputation in the area of credit and consumer law or policy; and the ability to develop and teach undergraduate and/or postgraduate courses in credit and consumer law and allied areas of commercial law. The successful candidate will be ideally positioned to make a significant impact on credit and consumer law and policy in Australia. The position is continuing.

Further details are available on the Griffith website: http://www.griffith.edu.au/hrm/employment/.

Applications close on 14 May 2008.

Minnesotans rally for foreclosure moratorium

By 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. The governor has proposed voluntary actions by mortgage servicers instead.

Minnesota may join Philadelphia, Massachusetts, and other local and state courts and legislatures in the months to come, as homeowner frustration grows, preventable foreclosures continue to mount and voluntary efforts by the mortgage servicing industry continue to fall short of addressing the need.

Journal of Family and Economic Issues

The 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 Credit Card Losses?

David A. Evans and Jean M. Lown, Predictors of Chapter 13 Completion Rates: The Role of Socioeconomic Variables and Consumer Debt Type

Diann C. Moorman and Steven Garasky, Consumer Debt Repayment Behavior as a Precursor to Bankruptcy

Tim R.L. Fry, Sandra Mihajilo, Roslyn Russell and Robert Brooks, The Factors Influencing Saving in a Matched Savings Program: Goals, Knowledge of Payment Instruments, and Other Behavior

Marc Anthony Fusaro, Hidden Consumer Loans: An Analysis of Implicit Interest Rates on Bounced
Checks

Anna Paulson and Sherrie L. W. Rhine, The Financial Assimilation of an Immigrant Group: Evidence on the Use of Checking and Savings Accounts and Currency Exchanges

Douglas J. Lamdin, Does Consumer Sentiment Foretell Revolving Credit Use?

Nancy Ammon Jianakoplos and Alexandra Bernasek, Family Financial Risk Taking When the Wife Earns More

Tansel Yilmazer, Saving for Children's College Education: An Empirical Analysis of the
Trade-off between the Quality and Quantity of Children*

More information on the papers can be found at: http://www.springerlink.com/content/104904/

New HUD Secretary?

By 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 mortgage reform and revamped mortgage disclosure rules? Not clear.

When Steven Preston was appointed to run the Small Business Administration in 2006, small businesses were not impressed. This post at the Carpetbagger critiques Mr. Preston's credentials to run the SBA, and notes that his primary qualification seems to have been loyalty to, and fundraising for, the Republican party. He previously served as Exec VP of ServiceMaster, the company that owns Chemlawn and Terminix, and in that capacity was highly critical of EPA regulation. Both former Secretary Jackson and nominee Preston have been charged with steering government contracts to unqualified cronies. At a time when the nation's cities and home financing system are in crisis, this nomination reveals the present Administration's indifference (one might even say contempt) for HUD's mission.

Jackson's HUD, for example, has done little to rebuild New Orleans or house its homeless, while supporting the New Orleans housing authority's plan to demolish 5000 units of low-income housing formerly occupied by Katrina victims, with no plan for replacement housing.

New Consumer Caucus; Credit Card Hearing

Reps. 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.com about his testimony yesterday on credit card abuses before the House of Representatives. We previewed that hearing in a previous post. You can read Senator Levin's testimony and that of other witnesses at the hearing here.

Response to the Boston Globe on the Student Loan “Crisis”

by 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 Globe, “Credit Crisis Leaves Students Unable to Count on Loans” presents a distorted picture. This misleading article is a disservice to students and their parents who are trying to figure out what is really going on.

The article opens with Anthony Norton, a student at UMass whose funds were temporarily cut off after TERI’s bankruptcy. This was a temporary glitch, no question, but it involved private student loans only. The article fails to make this essential distinction. TERI’s bankruptcy will have no affect on the federal loan programs because TERI only guaranteed private loans. Federal loans, in contrast, are guaranteed by the government. Although private loan volume has grown in recent years, federal loans are still the primary lending resource for students and their families.

The article quotes Northeastern’s financial aid director Tony Erwin that the days of easy access to student credit are over. In fact, there has been no change in a borrower’s ability to access federal loans. And the loan terms, which are strictly regulated by federal law, haven’t changed either. Yes, some private lenders have left the federal loan business, including Massachusetts-based MEFA, but there are still plenty of private lenders taking up the slack as well as a government-based Direct loan program. Senator Kennedy has taken a leadership role in monitoring the federal loan situation and pushing the Department of Education to develop contingency plans if access is truly threatened.

Your Identity Is Worth $2

Apparently 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

The 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.  The hearing is on HR 5244, described as a bill to amend the Truth in Lending Act to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes.  The witnesses scheduled to appear include: Sen. Ron Wyden, D-Ore.; Sen. Carl Levin, D-Mich; credit card abuse victims Steven Autrey, Susan Wones, Marvin Weatherspoon, Stephen M. Strachan; Sandra Braunstein, director of the Federal Reserve’s Consumer Affairs Division; Marty Gruenberg, the FDIC’s deputy director; Julie Williams, the OCC’s deputy director and general counsel; John Bowman, the OTS’s general counsel; John Carey, Citi Cards’s chief administrative officer and executive vice president, Larry Sharnak, American Express’s executive vice president and general manager; Carlos Minetti, Discover Financial Services’s executive vice president; Travis B. Plunkett Consumer Federation of America’s legislative director; Linda Sherry of Consumer Action; and Ed Mierzwinski of U.S. Public Interest Research Group.