Consumer Law & Policy Blog

Bloomberg BusinessWeek Report on Upcoming CFPB Mortgage Disclosure Forms

Here.  An excerpt:

In previewing its proposal, which must be released by July 21, the bureau has also said that over the last few months it is considering modifying core mortgage disclosure requirements, such as how the annual percentage rate is calculated. The plan is drawing fire from banks and consumer advocates alike.

* * *

The consumer bureau announced in a Feb. 21 advisory posted on its website that it is considering major changes to the use of the annual percentage rate, the key metric laid down in the Truth in Lending Act for calculating the cost of a mortgage.

The APR takes the interest rate, incorporates other fees associated with a mortgage, and is designed to give the consumer a single metric to assess the cost of a loan. However, the Truth in Lending law excludes some potentially costly fees from the APR calculation, such as charges for title searches and insurance.

The consumer bureau may propose incorporating other fees, including title costs, into the APR calculation, it said in the Feb. 21 advisory. * * *

DC Program Writes Prescriptions for Fruits & Vegetables

This month, as the Washington Post reports here, the clinic at We Can, a DC program aimed at helping low-income families struggling with obesity and chronic disease, started writing prescriptions for fresh fruits and vegetables in the form of vouchers that the recipients can use at local farmers markets. The idea is that the vouchers solve the problem of fresh healthy foods being too expensive and/or unavailable in urban food deserts. The doctors involved see it as a form of preventative care that can be cheaper and more effective than the traditional route of prescribing medications. The program is modeled after similar programs in other Northeastern cities that have been deemed successful: 38% of participants improved their body mass indexes.

This seems like a good idea, but I wonder whether folks could get more for their vouchers if the prescriptions could also be redeemed at regular grocery stores, where the fresh produce is generally less expensive---at least one of the participating farmers markets is located literally across the street from a large grocery store with an excellent produce department. Supporting farmers markets is laudable, but is that an appropriate goal in this context? Or is there something about shopping at a farmers market rather than Giant that promotes a healthy lifestyle?

 

Pizza Chains Opposing FDA Calorie Labeling

The Affordable Care Act includes requirements that chain restaurants disclose the calories for the foods they serve. Read this article about how the big national pizza chains are lobbying against FDA's implementing rules.

If you are interested in FDA's efforts in this area generally, read its calorie content labeling homepage.

More on a Constitutional Amendment to Authorize Campaign Finance Regulation

Leah posted earlier on Larry Tribe's proposed constitutional amendment allowing Congress and the states to regulate campaign funding:

Nothing in this Constitution shall be construed to forbid Congress or the states from imposing content-neutral limitations on private campaign contributions or independent political campaign expenditures. Nor shall this Constitution prevent Congress or the states from enacting systems of public campaign financing, including those designed to restrict the influence of private wealth by offsetting campaign spending or independent expenditures with increased public funding.

Ruth Marcus has penned this essay reacting to Tribe's amendment, showing sympathy with its aims but not its method. "The notion of fiddling with the First Amendment should make anyone nervous — especially anyone who has spent a career benefiting from it," she says, referring to her personal beneift from the speech and press freedom she enjoys as a journalist. She concludes that "the fault with the current arrangement [of unlimited "independent" expenditures] lies not in the First Amendment but in the Supreme Court’s interpretation thereof." That's true in one sense, of course, if you believe that the Supreme Court misintrepreted the First Amendment in its campaign finance rulings. In another sense, the Constitution is what the Supreme Court says it is. In any event, Marcus doesn't respond to Tribe's view, as related by Marcus, that “'there’s no serious prospect' that a majority of the Supreme Court 'will see the light in our lifetimes' while “'distortive effects of Citizens United and its aftermath are becoming clearer every week.'”

CFPB names new general counsel

Meredith Fuchs has been named general counsel of the Consumer Financial Protection Bureau, replacing Len Kennedy, who will serve as senior adviser and counselor to Director Richard Cordray. Among her other qualifications, Meredith worked at Public Citizen Litigation Group her first year out of law school. Other changes to CFPB senior staff are detailed in the CFPB press release.

More on the CFPB Credit Card Complaint Database

by Jeff Sovern

Brian posted earlier today about the CFPB's Credit Card Database and included links to reports on the Database.  MSNBC's Bob Sullivan has another piece at The Red Tape Chronicles on the Database that includes some complaints by the industry:

"Bureau publication of complaint data alone implies an official endorsement of inferences drawn out of context and suggests reliability about overall issuer customer experience and satisfaction that is not well-founded and that invites untrustworthy analysis that will mislead consumers, said the American Bankers Association in its public comments on the consumer bureau's proposal to publish the data.

And here's a quote from one of the article Brian linked to, in the Washington Post:

“It’s an unlevel playing field,” said Richard Hunt, president of the Consumer Bankers Association, a trade group. “It appears to be a gotcha mentality when it didn’t have to be that way.”

Now think about credit reports.  True, credit reports are regulated by the federal Fair Credit Reporting Act.  But it appears that those reports nevertheless contain many significant errors.  And yes, consumers have the right to insert a statement about credit disputes in their credit reports--but in practice, those statements seem to be widely ignored by lenders.  Lenders surely assume that reports of late payments in credit reports, for example, are reliable and well-founded--and so the lenders will be misled when they are not.  Does that bother the American Bankers Association as much as the Database?  Hunt may be right that this database by itself is an unlevel playing field, but then, so are credit reports.  Maybe this helps level the playing field overall.  But in truth, I'm not sure how significant this database will be to consumers.  Will consumers check the Database before applying for a credit card to see how many complaints have been filed against, say, Citibank and what the resolution of those complaints was?  I'm not sure.  Maybe a third party will collect the complaints and publish information about them.  If so, will consumers use that information?  I guess time will tell. This is only the beta version; perhaps later versions will be more useful to consumers.

 

More on the Very Bad Job Market for New Lawyers

We told you earlier about bad job data for new law graduates. Now, the ABA has released data that's even worse. According to this story by Karen Sloan:

Slightly more than half of the class of 2011 — 55 percent — found full-time, long-term jobs that require bar passage nine months after they graduated, according to employment figures released on June 18 by the American Bar Association. The statistic was perhaps the most sobering in a season of bad news about new lawyer employment.

And these employment figures are inflated by law schools' recent and unprecedent programs to fund jobs for graduates who cannot find work:

Slightly more than 4 percent of the class of 2011 were in jobs funded by the law schools themselves, according to the ABA data, and the trend appeared to be on the rise. Twenty-seven law schools had 10 percent or more of their 2011 graduates on their payroll. In 2010, the City University of New York School of Law had hired the highest percentage of graduates, at 19 percent. But it was eclipsed by 14 other law schools in 2011. The University of Miami School of Law and the University of Notre Dame Law School both reported hiring 23 percent of their graduates, followed closely by Boston University School of Law at 22 percent and the University of California at Los Angeles School of Law at 19 percent. Several of the country's most prestigious law schools, including the University of Chicago Law School, New York University School of Law, the University of Virginia School of Law and Yale Law School, hired 10 percent or more of their class of 2011.

As we reported earlier, some law schools have responded to the market by admitting fewer applicants.

 

Romneycare Compliance

This informative story by Sarah Kliff explains how the Massachusetts health reform law has been working. What's most interesting is how the Romney-supported insurance mandate has operated. Even though the cost of the penalty for not buying insurance has been far lower than the cost of buying "mandated" insurance, people have overwhelmingly opted for insurance. In other words, compliance with the mandate has been very high, and the number of uninsured people in Massachusetts has fallen fairly dramatically. Two thirds of the population support the law, though health care cost control remains a problem. Worth reading.

CFPB Credit Card Complaint Database Goes Public Today

Reporter Ylan Mui explains here that

The Consumer Financial Protection Bureau [today] will begin releasing detailed information on Americans’ complaints about their credit cards, part of a public database that the agency hopes will be both comprehensive and granular. Complaints are the primary way that most consumers interact with the new agency. The CFPB said it has received more than 45,000 in the year since the bureau was launched. How it handles those complaints — and how much it makes public — has been a source of tension between the agency and financial industry groups. ... The CFPB said it will only publish complaints after it has verified the consumer’s relationship with the company. The new database will include not only the name of the company involved, but also the nature of the complaint and the consumer’s Zip code. It will also report whether the firm responded in a timely manner, how the matter was resolved and any disputes. CFPB Director Richard Cordray said that the information represents the first time such detailed data would be available publicly.

Read another article on the new CFPB database. (The article also notes CFPB's claim that the agency has resolved to the consumer's satisfaction around 80% of the 45,000 complaints it has received to date).

According to the AMA, 10% of Major Health Insurance Claims Are Processed Inaccurately

That sounds pretty bad, but it's a big improvement. According to this article in the Chicago Tribune, "[i]nsurance companies incorrectly processed about one in 10 claims in the early part of 2012, a vast improvement over the same period last year," according to the American Medical Association. "In its fifth annual National Health Insurer Report Card, the AMA said the nation's seven largest health insurers paid doctors and other providers the wrong amount 9.5 percent of the time this year, compared with 19.3 percent in 2011." Go here to read all the AMA data.