Consumer Law & Policy Blog

Is the CFPB Contemplating a Rule To Immunize Banks From Litigation Defenses in Some Foreclosures?

Here.

Student Loan Report From the CFPB Ombudsman

The Consumer Financial Protection Bureau student loan ombudsman, Rohit Chopra, has issued his first annual report required by the Dodd-Frank financial reform law. Michelle Singletary of the Washington Post says that the report may portend a finanical crisis.

The report's executive summary appears after the jump.

HufPo Report: Suit Charges Debt Collector Told Disabled Vet He Should Have Died

Here.  An excerpt from what the collector supposedly said:

"F--- you! Pay us your money! You can't afford an attorney. You owe us. I hope your wife divorces your a--. If you would have served our country better you would not be a disabled veteran living off social security while the rest of us honest Americans work our a-- off. Too bad; you should have died."

Credit Counseling and Student Loans

by Jeff Sovern

I've been studying up on student loans because we intend to include some materials on them in the next edition of our casebook.  One thing I've learned is that the federal Higher Education Act and its implementing regulations require students obtaining federal student loans to have counseling before they take the loans.  See 34 CFR § 682.604(f). But the word "counseling" is a little misleading in this context; schools may provide the necessary information in person, online, or in written form.  How effective is the in-person variety of counseling (you could argue that one-on-one counseling is the only kind of counseling that really is counseling, but never mind)?  Well, when Elgin Community College started requiring students to meet one-on-one with a counselor, students borrowed 13% less, on average.  The report is here. 

Obama vs. Romney on Consumer Protection Issues

Here.

Industry, Unions Sue to Stop NYC Mayor Bloomberg's Ban on the Sale of Large Sugary Drinks

A coalition of business groups and labor unions sued in New York state court on Friday to stop New York City Mayor Michael Bloomberg's ban on the sale of sugary drinks larger than 16 ounces. Read the complaint and this press account. The complaint claims, among other things, that the regulations are arbitrary and irrational under New York administrative law principles and violate the New York Constitution's separation of powers.

We have previously covered Mayor Bloomberg's ban here, here,  here, here.

Steven Pearlstein opinion piece: The judicial jihad against the regulatory state

That's Steven Pearlstein's characterization of the judiciary's attitude toward federal health and safety regulation in a column published today. Here's an excerpt discussing what Pearlstein views as a recent example:

Their latest salvo came just before Labor Day, when a divided three-judge panel threw out rules requiring states to control the air pollution that wafts over their borders into other states. These rules were first ordered up by Congress back in 1970, have been more than 20 years in the making and had already been the subject of two challenges before the D.C. Circuit. According to estimates by the Environmental Protection Agency, these regulations would prevent between 13,000 and 34,000 premature deaths, 15,000 non-fatal heart attacks, 19,000 hospital and emergency room visits and 1.8 million days of missed work or school for each year. The projected annual compliance cost is $2.4 billion, compared with the annual health benefits of anywhere from $120 billion to $280 billion.

Simplified Food Labels

by Jeff Sovern

Mark Bittman has an interesting column in today's Times, My Dream Food Label, describing how his ideal food label would use traffic lights--green, yellow, or red-- to signal qualities such as the healthfulness of the food.  Though Bittman doesn't mention the health department restaurant grading system, which uses letter grades, it's a similar system. If Bittman's system were to go into effect and enough consumers were to pay attention to the grades, food manufacturers would probably want to attract their business and so could be expected to take steps to earn green lights, which should improve the heatlthfulness of food.  Thus, all would benefit, even those who don't pay attention to the grades.

Oren Bar-Gill: Seduction by Contract

Oren Bar-Gill has written Seduction by Contract: Law, Economics and Psychology in Consumer Markets (Oxford University Press 2012).  The Introduction is available here. Here's the abstract:

Consumers routinely enter into contracts with providers of goods and services. These contracts are designed by sophisticated sellers to exploit the psychological biases of consumers. They provide short-term benefits, while imposing long-term costs – because consumers are myopic and optimistic. They are excessively complex – because complexity allows sellers to hide the true cost of the product or service from the imperfectly rational consumer. Using both general theory and detailed case studies, this book explains the costs – to consumers and society at large – imposed by seductive contracts, and outlines a promising legal policy solution: Disclosure mandates. Simple, aggregate disclosures can help consumers make better choice. Comprehensive disclosures can facilitate the work of intermediaries, enabling them to better advise consumers. Effective disclosure would expose the seductive nature of consumer contracts and, as a result, reduce sellers’ incentives to write inefficient contracts.

Netflix Agrees to Closed Captioning on Its Streaming Content as a Result of ADA Lawsuit

As this article by Sheri Qualters explains, "Netflix Inc. has agreed to put closed captions on 100 percent of its streaming content within two years to settle a lawsuit filed by the National Association of the Deaf last year" under the Americans With Disabilities Act. This settlement could encourage other on-line video providers to follow Netflix's example.

UPDATE: Read the settlement.