Consumer Law & Policy Blog

Republicans Wanted CFPB to Have a Single Director! Who Knew?

by Jeff Sovern

We have blogged many times about the Republican call for the CFPB to have a commission-structure, rather than a director (see, for example, here).  That call has been spearheaded by Senator Shelby.  So that makes it all the more surprising to note that during the Senate's consideration of what became the Dodd-Frank Act, Senator Shelby, along with other Republican senators, proposed that the Bureau be headed by--you guessed it--a single director!  Senator Shelby's proposed amendment appears in the Congressional Record of May 5, 2010, at page S3217 and following.  In fairness to the Senator, the amendment, which would have housed the Bureau (called a division in the amendment) in the FDIC, would have given the FDIC the power to vote down Bureau rulemakings (the Dodd-Frank Act provides that Bureau rules can be vetoed by a two-thirds vote of the Financial Stability Oversight Council).  I guess Senator Shelby was for a director before he was against it.

Myriam Gilles on Arbitration Clauses After Concepcion

Myriam E. Gilles of Cardozo has written Killing Them with Kindness: 'Consumer-Friendly' Arbitration Clauses after AT&T Mobility v. Concepcion, forthcoming in Notre Dame Law Review.  Herer's the abstract: 

In AT&T v. Concepcion, the Supreme Court struck California’s so-called “Discover Bank rule” – a judge-made rule providing that arbitration agreements attended by class action waivers are unenforceable, if those agreements are contained in standard form consumer contracts. But, arguably, Concepcion leaves open and unresolved the viability of a state law challenge to a bilateral arbitration clause which is shown, in a particular case, to impose a forfeiture of the claimant’s ability to vindicate his state law rights. Meanwhile, in the context of federal claims, the Second Circuit in American Express III reaffirmed in light of Concepcion its earlier holdings that a class action waiver contained in an arbitration agreement is unenforceable if it is proven in the individual case that the arbitration clause at issue would force the claimant to shoulder such costs as would prevent the claimant from effectively vindicating its federal statutory rights. On both the state and federal levels, then, cost-based vindication of rights challenges remain a significant concern to corporate defendants looking to exculpate themselves from exposure to aggregate litigation.

All of this begs a question this paper seeks to answer: will the robust recognition of cost-based, evidence-backed vindication of rights challenges swallow up the basic ruling of Concepcion, rendering unenforceable arbitration agreements and class action waivers that the Supreme Court has held are otherwise to be enforced?

Articles in Today's Times on Dischargeability of Student Loan Debt.

Here is a report on the pain involved in satisfying the "undue hardship" standard for discharging student loans in bankruptcy and here is a story about the case Scott Michelman blogged about earlier this week addressing debt collector liability for misleading borrowers about the dischargeability of student loans.