Consumer Law & Policy Blog

Feds issue emergency no-drive recommendation for some cars with defective Takata airbags

This National Highway Safety Administration (NHTSA) just said that some Hondas and Acuras equipped with defective Takata airbags are so dangerous that they shouldn't be driven until they are fixed. As this article explains:

Federal regulators on Thursday issued an urgent warning to owners of more than 300,000 Hondas and Acuras, saying they should not drive their vehicles until the Takata air bags are replaced. The National Highway Traffic Safety Administration said a new round of tests on the Takata air bags installed in some model-year 2001-2003 Hondas and Acuras posed a much higher threat to drivers and passengers than first thought. The agency said the air bags needed immediate replacement. In collisions, the faulty Takata air bags can rupture and spray drivers and passengers with metal shrapnel. “With as high as a 50 percent chance of a dangerous air-bag inflater rupture in a crash, these vehicles are unsafe and need to be repaired immediately,” Transportation Secretary Anthony Foxx said in a statement. “Folks should not drive these vehicles unless they are going straight to a dealer to have them repaired immediately, free of charge.”

Get more details on NHTSA's website.

Coincidentally, we posted earlier today on the progress of the Takata airbag recall.

 

Can Law Students Make a Difference in Consumer Law?

by Jeff Sovern

In his new book, Federal Trade Commission Privacy Law and Policy, Chris Hoofnagle writes (at page 137) about a 1971 petition by five GW law students to the FTC. The students urged the Commission to bar companies from making unsubstantiated claims and to require that chemically identical products be labeled to indicate that all products of that class are identical.  Hoofnagle then reports on an FTC Bayer aspirin case requiring Bayer to disclose its ingredients and forbidding claims that Bayer is more effective than other aspirin.  The implication is that the law students contributed to, if not caused, a change in the FTC's doctrines.

Pew Animation on Class Action Waivers and CFPB Proposed Rule

Here. 

Progress but not perfection in the Takata air bag recall

There's been a lot of publicity about the recalled defective Takata air bags, and the National Highway Traffic Safety Administration (NHTSA) has been encouraging consumers to get their air bags fixed. (Under the law, recall repairs are free.)

According to NHTSA, 8,867,284 Takata air bags have been fixed. That's a lot of air bags. And it's fair to assume that these repairs have prevented deaths and injuries.

But that number comprises only about half of all defective Takata driver-side air bags and fewer of the defective passenger-side air bags. It's hard to know why more have not been fixed. In some cases, I'd guess, consumers don't follow through after getting the recall notice. But that doesn't seem to be the only problem. I got a recall notice and was told to call a dealer to get the repair done. But the dealer did not have enough of the replacement parts in stock. So, I'm on a wait list.

Go here. and then click on the bubbles for details about the recall's progress.  

107 Nobel prize winners slam Greenpeace for its opposition to genetically modified organisms (GMOs)

Why? Because the Nobel laureates believe that GMOs can advance human health and nutrition, and, they say, there's no evidence that GMOs hurt people. Read this article on the development by Joel Achenbach. Here are excerpts:

More than 100 Nobel laureates have signed a letter urging Greenpeace to end its opposition to genetically modified organismss. The letter asks Greenpeace to cease its efforts to block introduction of a genetically engineered strain of rice that supporters say could reduce Vitamin-A deficiencies causing blindness and death in children in the developing world. * * * The letter campaign was organized by Richard Roberts, chief scientific officer of New England Biolabs and, with Phillip Sharp, the winner of the 1993 Nobel Prize in physiology or medicine for the discovery of genetic sequences known as introns. The campaign has a website, supportprecisionagriculture.org, that includes a running list of the signatories. . . . “We’re scientists. We understand the logic of science. It's easy to see what Greenpeace is doing is damaging and is anti-science," Roberts told The Washington Post. “Greenpeace initially, and then some of their allies, deliberately went out of their way to scare people. It was a way for them to raise money for their cause." Roberts said he endorses many other activities of Greenpeace, and said he hopes the group, after reading the letter, would "admit that this is an issue that they got wrong and focus on the stuff that they do well." * * * Nobel laureate Randy Schekman, a cell biologist at the University of California at Berkeley, told The Post, “I find it surprising that groups that are very supportive of science when it comes to global climate change, or even, for the most part, in the appreciation of the value of vaccination in preventing human disease, yet can be so dismissive of the general views of scientists when it comes to something as important as the world’s agricultural future.”

Ware Article on The Politics of Arbitration and Centrist Proposals

Stephen J. Ware of Kansas has written The Politics of Arbitration Law and Centrist Proposals for Reform, 53 Harvard Journal on Legislation (2016).  Here is the abstract:

Arbitration law in the United States is far more controversial when applied to individuals than to businesses. While enforcement of arbitration agreements between businesses sometimes raises legal issues that divide courts, those issues tend to interest only scholars, lawyers, and other specialists in the field of arbitration. In contrast, enforcement of arbitration agreements between a business and an individual (such as a consumer or employee) raises legal issues that interest many members of Congress and various interest groups, all of whom have taken positions on significant proposals for law reform. The Consumer Financial Protection Bureau has extensively researched and reported on consumer arbitration agreements and is expected to issue a rule regulating, or even prohibiting, such agreements.

This Article both explains how issues surrounding consumer and other adhesive arbitration agreements became divisive along predictable political lines and introduces a framework to understand and compare various positions on them. This new framework arrays on a continuum five positions on the level of consent the law should require before enforcing an arbitration agreement against an individual. Progressives generally would require higher levels of consent than arbitration law currently requires, while conservatives generally defend current arbitration law’s low standards of consent.

This Article proposes a centrist position. It joins progressives in rejecting overbroad enforcement of adhesive arbitration agreements due to conservative supported anomalies in arbitration law’s treatment of contract-law defenses, legally- erroneous decisions, and class actions. Once these anomalies are fixed, though, this Article joins conservatives in defending general enforcement of adhesive arbitration agreements under contract law’s standards of consent because adhesive arbitration agreements should — contrary to progressive opinions — be as generally enforceable as other adhesion contracts. This Article briefly concludes by proposing language for a rule the Consumer Financial Protection Bureau could adopt to enact the reforms advocated in this Article.

SCOTUS Takes FHA Cases: Do Cities Have Standing to Sue for Discrimination Under the FHA?

SCOTUSBLOG coverage here and here. Reuters reports here. The Reuters lead reads: "The U.S. Supreme Court on Tuesday agreed to decide whether Miami can pursue lawsuits accusing major banks of predatory mortgage lending to black and Hispanic home buyers resulting in loan defaults that drove down city tax revenues and property values." HousingWire has more here. Reverse redlining makes it to the Court.

Two articles on alternatives to payday loans

The Washington Post has two articles today about payday loans.

First, an opinion piece by Mike Calhoun, the director of the Center for Responsible Lending, is entitled "Think there’s no good alternative to payday loans? Think again." Mr. Calhoun begins:

The Consumer Financial Protection Bureau’s proposed rule requiring payday and car title lenders to assess borrowers’ ability to repay will, by all projections, reduce the number of these loans being made. The question often comes up: What will those consumers who might have taken out a payday or car title loan do instead?

A review of the credit market for households with lower credit scores and the experience of states that have addressed payday lending show that many alternatives are available. They are all far better than the long strings of repeated high-cost loans that trap payday borrowers in unmanageable and ultimately devastating debt.

The full piece is here.

Second, a piece by University of Georgia School of Law professor Mehrsa Baradaran, is entitled "Payday lending isn’t helping the poor. Here’s what might." Professor Mehrsa argues:

[Payday] loans do not make customers better off. Many stay indebted for months or even years and most pay interest rates of between 300 to 2,000 percent. By the time they’ve paid off the loan, they are further in the hole than when they started.

But are these loans an essential service for poor borrowers? Yes. Most people assume that with some education and better money management, the poor would not need such ruinous loans. Thus, the argument goes, it’s fine for a paternalistic state to forbid them to protect the borrowers from their own mistakes. But this view ignores the reality of poverty and all of its sharp edges.

These loans offer liquidity — a financial lifesaver — when those living on the financial edge bump against an unexpected problem. Most of us rely on loans to get by or to get ahead. The poor also need loans, but usually just to stay afloat. So if we are going to regulate them away, the next step has to be providing an alternative.

The full article, including a discussion of alternatives, is here.

CFPB releases monthly "complaint snapshot" about consumer loans

The Consumer Financial Protection Bureau today released a monthly "complaint snapshot" highlighting complaints about consumer loans, including vehicle loans and leases, installment loans, title loans, and pawn loans. The report shows that consumers continue to complain about issues managing their loans and problems they encounter when they are unable to pay off the loans. The report also highlights trends seen in complaints coming from Arkansas.

The CFPB's press release is here. The report is here.

Coverage of the VW emissions settlement

Confirming the reports last week of a settlement of the VW emissions lawsuit, the parties today announced that VW will pay $14.7 billion to settle allegations of cheating emissions tests and deceiving customers. Volkswagen will offer consumers a buyback and lease termination for nearly 500,000 model year 2009-2015 2.0 liter diesel vehicles sold or leased in the U.S., and spend up to $10.03 billion to compensate consumers under the program. In addition, the companies will spend $4.7 billion to mitigate the pollution from these cars and invest in green vehicle technology.

The settlement includes claims brought by the United States, the State of California, the Federal Trade Commission, and private plaintiffs. The FTC's press release, with a detailed description of the settlement and a link to it, is here. The U.S. Department of Justice's press release is here.

Volkswagen also announced that it has agreed with the attorneys general of 44 U.S. states, the District of Columbia, and Puerto Rico to resolve existing and potential state consumer protection claims related to the diesel matter for a total settlement amount of approximately $603 million. VW's press release is here.

Volkswagen has set up a settlement website with an explanation of the settlement and pertinent documents, here.

For owners of the VW and Audi vehicles involved, USA Today has a "Q&A: What you need to know about VW's diesel car deal," here. And CBS explains "How to claim your settlement," here.

The New York Times reports that "VW’s U.S. Diesel Settlement Clears Just One Financial Hurdle," here.

And Bloomberg reports, here, that the settlement includes billions of dollars to support technologies sold by rivals such as Tesla Motors Inc. and Toyota Motor Corp.