Consumer Law & Policy Blog

House "Freedom Caucus" Asks Trump to Kill CFPB Proposed Arbitration Rule; Is Freedom Just Another Word for Tricking/Trapping Consumers?

WSJ report here (behind paywall). The Caucus consists of 40 members.  The article reports that they seek rollback of 200 rules, but they anticipate that the number will rise. 

Klonoff: A Respite from the Decline in Class Actions

Robert H. Klonoff of Lewis & Clark has written Class Actions Part II: A Respite from the Decline.  Here is the abstract:

In a 2013 article, I explained that the Supreme Court and federal circuits had cut back significantly on plaintiffs' ability to bring class actions. As I explain in the present article, that trend has subsided. First, the Supreme Court has denied certiorari in several high profile cases. Second, the Court's most recent class action rulings have been narrow and fact specific. Third, the federal circuits have likewise adopted narrow and fact specific approaches to class actions. One explanation for this new trend is that defendants have been overly aggressive in their arguments, losing credibility and causing courts to push back.

Federal Statute Barring Non-disparagement Clauses Is Enacted

by Paul Alan Levy

An announcement from the White House today listed the Consumer Review Fairness Act as one of several bills that President Obama signed into law yesterday.   Here is my public statement on the development.

And today I learned of a significant development: DC United is breaking with the forces at the headquarters of Major League Soccer which, I have been hearing, was the reason why the team put out language in a new form contract for season ticket holders. That document, read literally, would have forced fans to agree not to describe games or post photos or short video clips of games. As I explained last week, although the Consumer Review bill was designed to get at non-disparagement clauses, the language is broader and forbids any form contractual limits on consumers posting a “written . . . or pictorial review, performance assessment of, or other similar analysis of. . .  the goods, services, or conduct of a person . . ..” I have yet to see DC United's new language, but from what I have been told by the team there is reason to be optimistic.  It will be now up to soccer fans in other cities to press for changes — and fans of other sports, because language like this has been cropping up in teams in the National Football League, National Basketball Association and elsewhere.  It was on the way to becoming industry standard, but can no longer be.

It’s been a long haul for us at Public Citizen, litigating these cases one by one.  Many thanks to Robert Lee for standing up to Stacy Makhnevich, to John and Jen Palmer for taking on Kleargear, and to Robert and Michelle Duchouquette for staring down a lawsuit by Prestigious Pets seeking the deliberately intimidating amount of up to a million dollars in damages.  Eric Goldman and Jason Schultz deserve credit for their web site Doctored Reviews calling attention to a sleazy company whose business model involved charging medical professionals for form contracts barring criticism by patients.  And thanks as well to Yelp which was one of the main forces lobbying for this bill to protect its users -- so active on this subject that many people were calling it the "Yelp bill."  Thanks to Eric Swalwell, the original House sponsor (whose tweet this morning provided my original notice of yesterday's signing).

We should no longer have to go state-by-state to litigate these cases.  Attention to Claude and Violane Galland!

What's in store for the Consumer Product Safety Commission?

FairWarning has an article today about the Consumer Product Safety Commission:

For decades, the federal agency largely was seen as a doormat with few resources and a toothless enforcement record. But over the past few years, under its chairman, Elliot Kaye, the CPSC has dramatically increased the penalties imposed on wayward companies, including multi-million dollar settlements with firms accused of failing to make timely disclosures of product hazards. ... But with the November 8 election of Donald Trump, who has vowed to cut business regulations, the amped up penalties could come under tough scrutiny.

Read the full article here.

"Big Banks Fight to Block Crisis-Era Lawsuits From Continuing"

The New York Times reports:

Big banks are fighting tens of billions of dollars of potential legal costs linked to at least a dozen pending lawsuits arising from the financial crisis. Now they want the Supreme Court to weigh in, arguing that regulators took too long to file their claims.

A handful of banks, including Wells Fargo, Credit Suisse and Deutsche Bank, have asked the Supreme Court to review a lower court decision that said the regulators filed their claims on time despite a Depression-era securities law that gave them only a three-year window.

The full article is here.

Whither the Community Reinvestment Act?

BuckleySandler's Warren W. Traiger has some thoughts in the American Banker here (free content).

"Education secretary ousts one of the nation’s largest college accreditors from its oversight role"

The Washington Post reports:

Education Secretary John B. King Jr. on Monday rejected an appeal from the Accrediting Council for Independent Colleges and Schools, one of the largest national accreditation agencies, to remain the gatekeeper between colleges and billions of dollars in federal financial aid.

King is siding with his staff and an independent advisory board that deemed the council incapable of rectifying years of lax oversight of troubled for-profit colleges. Advocacy groups, lawmakers and state attorneys general have accused the accrediting agency of letting schools accused of fraud or with abysmal graduation rates receive millions of dollars in federal loans and grants, despite the risks to students and taxpayers.

The council has responded to the criticism by increasing the frequency of its on-site evaluations, removing board members with conflicts of interest, bringing in new leadership and stepping up enforcement actions. Its threat to revoke the accreditation of ITT Technical Institute set in motion a chain of events that ultimately led the for-profit schools to shut down. Still, the council’s efforts have not quelled objections to its participation in the federal student aid program.

The full article is here.

Latest FDA information on drug safety and drug labeling changes

The Food and Drug Administration has announced that it "is now making it easier and faster for health care professionals and patients to get the most up-to-date drug safety information on the more than 18,000 drugs available on our website. Our improved Drug Safety Labeling Changes Program enables FDA to post the latest safety information about a medicine almost at the same time we approve a change, as opposed to once a month." Also available at that web address is other basic information about the drug -- generic equivalents (if any), FDA reviews during the approval process, etc.

In addition, the FDA is reminding patients that "[s]afety information can change multiple times over the lifetime of a drug as FDA learns about new risks, interactions with other medications and side effects. After we become aware of new safety information, changes to the drug product labeling may be required. The public can [now] access this information  ... in a searchable database."

FTC issues FY 2016 National Do Not Call Registry Data Book

The Federal Trade Commission has issued the National Do Not Call Registry Data Book for Fiscal Year 2016. Consumers can use the National Do Not Call Registry to choose not to receive telemarketing calls.

Now in its eighth year of publication, the Data Book contains a wealth of information about the Registry for FY 2016 (from October 1, 2015 to September 30, 2016), including:

• The number of active registrations and consumer complaints since the Registry began in 2003;
• FY 2016 complaint figures by month and type;
• FY 2016 registration and complaint figures for all 50 states and the District of Columbia, by population;
• Rankings of the number of Do Not Call registrations, by state population;
• The number of entities accessing the Registry by fiscal year; and
• An appendix with registration and complaint figures organized by consumer state and area code.

CFPB enters into consent orders with 3 reverse mortgage companies accused of deceptive advertising

The Consumer Financial Protection Bureau has entered into consent orders with three reverse mortgage companies for deceptive advertisements, including claiming that consumers could not lose their homes. The CFPB is ordering American Advisors Group, Reverse Mortgage Solutions, and Aegean Financial to cease deceptive advertising practices, implement systems to ensure they are complying with all laws, and pay penalties totalling $780,000.

A reverse mortgage is a type of home loan that allows homeowners who are 62 or older to access the equity they have built up in their homes and defer payment of the loan until they pass away, sell, or move out. The loan proceeds are generally provided to the borrowers as lump-sum payments, monthly payments, or as lines of credit. Homeowners remain responsible for payment of taxes, insurance and home maintenance, among other obligations. 

The Mortgage Acts and Practices Advertising Rule prohibits misleading claims in mortgage advertising. In addition, the Dodd-Frank Wall Street Reform and Consumer Protection Act prohibits institutions from engaging in deceptive acts or practices, including with regard to advertising of consumer financial products or services.

The CFPB statement, with links to the three consent orders, is here.