Consumer Law & Policy Blog

Movement in the States to Increase the Minimum Wage

The federal minimum wage is $7.25 per hour and hasn't gone up in nearly 3 years. But there's a movement in some states to increase the minimum wage for in-state workers above the federal level. It's already $9 per hour in Washington state, and legislation is pending in Massachusetts that would push the minimum wage to $10 per hour. The efforts in the states have encouraged some members of Congress to push for for an increase in the national minimum wage. Read about it here.

Hearing Loss, Consumer Protection, and Advances in Medical Technology

The sale of devices claimed to improve a consumer's hearing was so much the province of charlatans that shortly after Congress enacted the federal medical device laws in 1976 hearing aids became one of the few medical devices subject to device-specific FDA marketing and labeling regulations. (Go here to view FDA's hearing aid home page.) Moreover, the need for consumer regulation was deemed so great that, nearly alone among medical devices, the federal government allowed the states to regulate hearing aids alongside the FDA. See 21 C.F.R. 808.53-.101.

But hearing loss is a serious health problem. Recent research shows that by age 70 almost 2 of 3 Americans will have significant hearing loss. The numbers soar to 4 out of 5 by age 85. Today's Washington Post has a series of interesting articles about what appear to be significant (but costly) advances in hearing aid technology. Go here, here, and here.

More on the Slippery Slope From Health Insurance to Broccoli

We blogged earlier on slippery slope arguments and the Supreme Court's health care case. Here's another thought from the Economist.

New Federal Housing Administration Rule Tightens Home Purchase Eligibility

As Kenneth Harney at the LA Time explains:

A little-noticed mortgage rule change that took effect April 1 could create hassles for significant numbers of home buyers who plan to use low-down-payment FHA financing this spring. The change affects anyone with one or more "collection" accounts buried away in national credit bureau files. These include medical, student loan, retail and other debts reported as unpaid — correctly or incorrectly — by creditors and subsequently sent to collection agencies. In a reversal of its previous policy, the Federal Housing Administration says it will no longer approve applications when the borrowers have outstanding collections or disputed accounts with an aggregate of $1,000 or more of unpaid bills. Previously the agency took a more lenient approach, allowing lenders to review borrowers' overall credit situation and approve applications despite the presence of such accounts.

Tax Refund Anticipation Loans Are Dying

Tax refund anticipation loans are very short-term, high-interest loans provided by tax preparers to taxpayers in anticipation of their tax refunds. When taxpayers are provided with accurate information, generally they will conclude that these loans are a bad idea because the IRS can provide refunds very promptly (and at no charge!). We have blogged about tax refund anticipation loans -- here, here, here, here, and here -- including about why, because of the advocacy of public interest organizations and resulting federal regulatory policy, the refund loan industry was dying an appropriate death. Sunday's Washington Post confirms the trend.

Times Article on Spam Texts and Smishing

by Jeff Sovern

Here.  This is a problem where the law did what it could before the issue became common; spam text is outlawed both under regulations adopted under the federal CAN-SPAM Act (as long as the cell phone has a unique electronic address, which I gather they all do) and the federal TCPA (if the texts are sent via autodialer, which they likely are as it would be too time-consuming to send text spam from phones manually by entering in the number and text).  Yet the federal laws have not prevented bad actors from sending spam texts.  This seems like an area, like conventional email spam, where a technical solution is going to be more effective than one crafted by law-makers.  Smishing, by the way, is the text equivalent of phishing emails.

New Banking SuperPac

by Jeff Sovern

The American Bankers Association already has its BankPac, which ranks ninth in spending in the current election cycle, and there's also the Credit Union National Association, which has spent even more than BankPac, but that's apparently not enough for some bankers.  They have created a SuperPac, Friends of Traditional Banking.  Its website explains:

Everyone knows that traditional banks didn't cause the economic crisis, but that didn't stop Congress from heaping massive new regulations on them and their customers.

The American Banker has more:

"Congress isn't afraid of bankers," adds Roger Beverage, the president and CEO of the Oklahoma Bankers Association. "They don't think we'll do anything to kick them out of office. We are trying to change that perception."

* * *

[Independent Community Bankers of America] President and CEO Cam Fine is enthusiastic about the effort.

"I am for any PAC that is going to defeat our enemies," Fine says. "I agree with Howard [Headlee, president and chief executive officer of the Utah Bankers Association] on this. More power to him. I hope he raises a lot of money and hammers these guys."

* * *

"Clearly there are Members of Congress who have absolutely no reservations about kicking traditional banks in the teeth, and we are tired of it," says Headlee. "We've got to be able to defend the folks who have the courage to stand up for us as well."

Where are the SuperPacs--or ordinary Pacs, for that matter--for consumers?

Who Owns Data About You?

David Lazarus at the LA Times makes the claim that you do, and that businesses like Facebook don't (or, at least, shouldn't). As he puts it:

The FTC also wants Congress to enact laws giving consumers the right to know what sort of information private-sector data brokers are amassing about them. Such companies create files on millions of people based on information from public databases and other sources, and then sell those files to marketers and other business interests. Consumers should indeed be able to find out what's being bought and sold in connection with their names, so lawmakers should act on the FTC's proposal. But I'd take this whole thing a big step further. I propose a law explicitly declaring that a person's personal information belongs to that person, not to the companies it's shared with. Aside from whatever uses are required for routine order fulfillment, no use of anyone's information would be authorized without that person's upfront consent. Businesses of course would be gob-smacked by the very thought of losing control over customers' data, and would no doubt fight aggressively to maintain the status quo. The depth of Facebook's pockets would become clear very quickly. (emphasis added)

Michael Helfand Paper Reads Concepcion Narrowly

Michael A. Helfand 

of Pepperdine has written Purpose, Precedent, and Politics: Why Concepcion Covers Less than You Think, 4 Yearbook on Arbitration & Mediation (2012).  Here's the abstract:

This article sketches some possible limitations on the impact AT&T Mobility v. Concepcion will have going forward. While many have seen the Supreme Court’s decision as simultaneously signaling an end to the viability of class action lawsuits and undermining principles of federalism, there may be reasons to believe that it will not have implications quite so far reaching. Specifically, this article proposes three reasons why Concepcion’s impact may be limited. First, the decision lends itself to a more narrow reading, which simply demands that courts take the entire of an arbitration agreement into account before deploying common law defenses to render them invalid. Second, Justice Thomas’s concurrence may limit the precedential value of Concepcion by narrowing the Court’s holding to cases where the defense speaks to the revocation of an otherwise valid agreement as opposed to where the defense speaks to a failure of the agreement’s formation. Third, state courts may demonstrate increasing willingness to chip away at Concepcion by narrowly construing its holding. Such a willingness may flow from a recognition that Concepcion’s five-justice majority is deeply divided on the applicability of the Federal Arbitration Act to state courts, making it unlikely that the Court would ever reverse state court decisions that employed aggressive use of state laws to invalidate an arbitration agreement.

Jeff Gelles on the Affordable Care Act

Here.  I also like Paul Krugman's analogy to Medicare; if the ACA is unconstitutional, how can Medicare be constitutional?  It's not like people can opt out of paying into Medicare.