Consumer Law & Policy Blog

Live Webcast of Sotomayor Senate Confirmation Hearing

In 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 of witnesses.

NCLC Issues Report on Loan Modification Scams

by 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 seeking to profit from desperate homeowners who are trying to save their homes. For-profit loan modification services claim to help homeowners obtain changes in the terms of their mortgage loans that will make the loan more affordable and, thereby, help the homeowner save their home from foreclosure. Unlike older foreclosure rescue scams that seek to bilk homeowners of their equity, loan modification scams are more interested in homeowners’ spare cash. They make extravagant and unverifiable claims regarding their ability to help but too often the homeowner gets nothing after paying thousands in fees they can ill afford to spare.

The report proposes a number of legislative and regulatory solutions including a proposal that the Federal Trade Commission prohibit the industry from charging any up-front fees and instead requiring that the fees be tied to benefits actually provided to the homeowners -- that is, "prohibiting fees until the homeowner obtains an affordable, sustainable loan modification."

Check out NCLC's press release as well.

Bloggers and Product Endorsement

by 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 like the products. As the article explains, the Federal Trade Commission is considering whether to regulate these practices. Those proposed amendments to the "FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising" can be found here (note in particular the material at pages 69-70 and 84-85 of the proposal).

InfomercialScams.com is no more — a sad end for a useful consumer web site

I 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.com. Said one such correspondent, Antoine Simmons (quoted here with permission):

Is it under a different name or have the deep pockets of the INDUSTRY finally won? I truly hope the latter is not the case. It would be a shame if the masses will not have a venue to warn and encourage (depending on the product) each other before sinking their hard earned cash into an unknown and largely unsupported product.

The answer is that the sites are down for now, and the reason has its roots in both the deep pockets of an infomercial purveyor and, apparently, the efforts of the new owners of the web site to exploit the site for extra profits. But as discussed at the end of the post, there remains some hope that a new version of the site may be restored to the web soon.

Medical Bankruptcy and Health Care Reform

by 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 they pointed to the low rate of medical bankruptcy in Canada, which has universal, single-payer health coverage. The Fraser Institute has recently issued a study claiming  that comparisons with Canada do not make the case for single-payer national health insurance because bankruptcy rates are, the study claims, higher in Canada than in the U.S. The study is getting some play in the press. Putting aside the question whether a comparison between overall bankruptcy rates in the U.S. and Canada is relevant, Bob Lawless over at Credit Slips has just responded to the Fraser Institute's study, seriously questioning its statistical validity. Here's a couple sentences to give you a flavor: "Before anyone takes this study seriously, a few important facts are needed to place the Fraser Institute findings in context. To be as charitable as possible, the study's use of the bankruptcy data is extremely selective." Worth reading.

Lots of Stuff Posted Online Regarding Judge Sotomayor

by 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 be interested. Take a look at a ton of stuff posted by the Clinton Library and smaller releases from the National Archives and the Bush I Presidential Library.

Barney Frank Introduces CFPA Bill

by 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 preserves the current federal banking regulators' role to enforce the Community Reinvestment Act (CRA). In addition, the Administration's proposal presupposes the creation of the National Bank Supervisor (NBS), a new prudential regulator that would merge the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS). The introduced bill takes no position on that issue, making references to the OCC and OTS instead of the NBS.

You can read the full text of the bill here. An excerpt from Rep. Frank's press release is below the jump.

Today's House Hearing on the CFPA

You 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 well as complete video of the hearing.

FTC Testifies on Proposed Consumer Financial Protection Agency

The 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 the creation of a Consumer Financial Protection Agency (CFPA).

The testimony presented by FTC Chairman Jon Leibowitz briefly described the Commission’s authority and activities regarding financial services, its priorities in this time of economic distress, and some preliminary comments on the impact of the Administration’s proposal on the FTC. The News Release follows after the jump.

Public Citizen Releases Statistical Survey of Public Interest Cases in the Latest Supreme Court Term

  The 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 to conduct a statistical survey of the Court's treatment of public interest cases.

Our survey--prepared by Public Citizen's current Supreme Court Fellow Leah Nicholls--measures how often the Court and each of the Justices decided in favor of expanding individual and environmental rights versus contracting those rights. Via both text and graphs, it examines cases in four categories:

• Access to Courts and Remedies
• Civil Rights
• Constitutional Rights, and
• Environmental Claims.

The report concludes with a brief discussion of the opinion-drafting assignments in the Term's most important public-interest cases. We hope you find the survey interesting and useful.