Consumer Law & Policy Blog

More on the CFPB's On-Line College Cost Comparison Tool

We posted recently about the Consumer Financial Protection Bureau's on-line college cost comparison tool. Jay Gould has posted this critique of the tool.

House Financial Services Republicans Oppose Subjecting Bank Regulators to Congressional Appropriations Process--Except CFPB

by Jeff Sovern

Yesterday, Democrats on the House Financial Services Committee suggested that in response to the Republican proposal to subject the CFPB to the congressional appropriations process, other bank regulators, including the Fed and the Office of the Comptroller of the Currency, be subjected to that process (all three are currently funded independently).  House Republicans defeated the proposal for the Fed and the OCC while advancing the proposal to subject the CFPB to that process.  The Hill's On the Money Blog has more.  It is difficult to see why sauce for the goose is not also sauce for the gander.  As The Hill wrote:

Democrats contend that moving control of the bureau’s budget to Congress was less about oversight and more about GOP attempts to stifle it.

"This is the most blatant attempt to really defang and destroy the agency," Maloney said.

As Fewer Take the LSAT, Its Price Jumps

We've blogged about the large drop in the number of law school applicants. Not surprisingly, in the most recent cycle, the number of people taking the Law School Admission Test also dropped dramatically -- by 16%. So, hoping that demand to take the test is inelastic (among those otherwise inclined to take the test), the Law School Admisssion Council is raising the price of the test by 15%. Prior increases generally have been in line with inflation (that is, 2 to 5%). As Daniel Berstine, the Council's president puts it, "[i]t is now time for us to correct our fees in light of new volume realities, and to align them more closely with the true value of those services to law schools and their applicants." 

Troubling Reports on College Students and Debt

One, from Fox Business, is headed Survey: Students Fail the Credit Card Test, An excerpt:

American college students are laden with credit cards, use them frequently, and have no idea what they are doing. Consequently, they are swamped with debt -- and the problem is growing worse by the year.

* * *

The primary takeaways: 70% of American college students have credit cards, five of every six of those students do not know their cards' interest rates, 75% of them do not know their late payment charges and 70% of them do not know what their over-balance-limit fees might be.

The result is predictable -- more than 90% of college students who hold credit cards are carrying monthly credit card debt.

So should college students reduce their credit card debt by increasing student loans?  Maybe not.  The Wall Street Journal reports To Pay Off Loans, Grads Put Off Marriage, Children.  Here's a paragraph from that report:

Most students get little help from colleges in choosing loans or calculating payments. Most pre-loan counseling for government loans is done online, and many students pay only fleeting attention to documents from private lenders. Many borrowers "are very confused, and don't have a good sense of what they've taken on," says Deanne Loonin, an attorney for the National Consumer Law Center in Boston and head of its Student Loan Borrower Assistance Project.

SEC Stall Leaves Key Dodd-Frank Rules More Than A Year Overdue

As the Huffington Post reports, "[a] full year after the official deadline came and went, key regulations necessary to enforce the Dodd-Frank financial reform law remain unwritten, leaving vast areas of the financial market still vulnerable to self-destruction and failing to discourage corrupt practices overseas." The full article is here.

Amy Schmitz on the Squeaky Wheel System for Complaining Consumers

Amy Schmitz

 of Colorado has written Access to Consumer Remedies in the Squeaky Wheel System, 39 Pepperdine Law Review 279 (2012).  Here's the abstract:

This article explores the “Squeaky Wheel System” (“SWS”) in business-to-consumer (“B2C”) contexts, referring to merchants’ reservation of purchase remedies and other contract benefits for only the relatively few “squeaky wheel” consumers who have the requisite information and resources to persistently seek assistance. The article uncovers how this system fosters contractual discrimination and hinders consumers’ awareness and access with respect to contract remedies. It also adds empirical insights from my recent e-survey, and offers suggestions for using the internet to empower consumers of all economic and status levels with efficient and accessible means for learning about their purchase rights and asserting their legitimate contract complaints.

Cardozo Concepcion Conference . . .

. . . on April 26.  More information here.  It looks like a terrific list of speakers, including CL&P blogger Paul Bland, once and future CL&P blogger Deepak Gupta, a representative from the CFPB, and an impressive list of law professors, including my colleague Adam Zimmerman.

How Environmentally Friendly Are Electric Cars?

It depends. If you live in a part of the country that derives most of its electricity from relatively clean sources, an electric car can be far friendlier to the environment than a gas-powered car. But not so much where electricity is produced from a dirtier source like coal. In all cases, though, electric cars are better for the environment than gas-powered cars, according to a just-released report from the Union of Concerned Scientists:

Electric vehicles burn no gasoline and have no tailpipe emissions, but producing the electricity used to charge them does generate global warming emissions. The amount of these emissions, however, varies significantly based on the mix of energy sources used to power a region's electricity grid. For example, coal-fired power plants produce nearly twice the global warming emissions of natural gas-fired power plants, while renewable sources like wind and solar power produce virtually no emissions at all.

Read the executive summary and the full report.

Judith Fox Study of Debt Collection Practices

Judith L. Fox

 of Notre Dame has written Do We Have a Debt Collection Crisis? Some Cautionary Tales of Debt Collection in Indiana, 24 Loyola Consumer Law Review (2012).  Here's  the abstract:

The Federal Trade Commission, in 2009, raised issues about debt collection practices and called on jurisdictions to investigate local practices that may be abusive to consumers. This article is the beginning of a larger study of debt collection practices in Indiana. It examines debt collection cases filed in Indiana courts in a three month period of 2009 and 2011 While most research on this issues has been in small claims court systems, this article suggests that the same, if not greater, consumer abuses exist in other courts. The research shows a pattern of large, national debt collection firms moving away from small claims courts, despite the size of the debt being collected. The procedural hurdles in these courts make it easier to obtain judgments and may result in greater abuse to consumers.

 

House Financial Services Committee Republicans Propose to Cut CFPB's Budget by More Than Half.

The Hill's On the Money Blog has the story here.  The Committee is scheduled to vote on the proposal Wednesday.  The bill would also subject the Bureau to the Congressional appropriation process--a proposal which this blog has previously criticized--and which would depart from the arrangement other financial institution regulators have.  The Republicans would also eliminate the Home Affordable Modification Program (HAMP).  At least they're not proposing to get rid of the Bureau in this bill, just disable it.