Consumer Law & Policy Blog

Michael Hiltzik on why he thinks Trump's day-one ACA executive order will "cripple" the health insurance market

Here.

Ben-Shahar & Strakilvitz on Contracting Over Privacy: A Symposium Introduction

Omri Ben-Shahar and Lior Strahilevitz, both of Chicago, have written an introduction to a symposium, Contracting Over Privacy: Introduction, 43 Journal of Legal Studies, No. S2, 2016. Here's the abstract:

This short essay introduces papers presented at the symposium Contracting over Privacy, which took place at the Coase-Sandor Institute for Law and Economics at the University of Chicago in fall 2015. The essay highlights a quiet legal transformation whereby the entire area of data privacy law has been subsumed by consumer contract law. It offers a research agenda for privacy law based on the contracting-over-privacy paradigm.

Cooper & Wright on Economics in FTC Privacy Policy

James C. Cooper and Joshua D. Wright, both of George Mason have written The Missing Role of Economics in FTC Privacy Policy, Cambridge Handbook of Consumer Privacy, Jules Polonetsky, Evan Selinger & Omer Tene, eds., Cambridge University Press (2017), Forthcoming.  Here's the abstract:

The FTC has been in the privacy game for almost twenty years. In that time span, the digital economy has exploded, dramatically increasing the importance of privacy regulation to the economy. Unfortunately, the sophistication of the FTC’s privacy policy has yet to keep pace with its stature. Privacy stands today where antitrust stood in the 1970s. Antitrust’s embrace of economics helped transform it into a coherent body of law that almost all agree has been a boon for consumers. Privacy regulation at the FTC is ripe for a similar revolution. We examine the history of FTC privacy enforcement and policy making, with special attention paid to the lack of economic analysis, and we show the unique ability of economic analysis to ferret out conduct that is likely to threaten consumer welfare, and provide a framework for FTC privacy analysis going forward. Specifically, the FTC needs to be more precise in identifying privacy harms and to develop an empirical footing for both its enforcement posture and prophylactic measures that it urges firms to adopt, such as “privacy by design” and “data minimization.” The sooner that the FTC begins to incorporate serious economic analysis and rigorous empirical evidence into its privacy policy, the sooner consumers will begin to reap the rewards. 
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Richard Cordray, Bob Dylan, and the future of the CFPB

Read this note from Consumer Financial Protection Bureau head Richard Cordray to his staff in the wake of the PHH decision.

 

My Times Dealbook Op-Ed: Trump Faces Stark Choice: Protect Consumers or Banks

Here.  Here's the beginning and the end:

 

President-elect Donald J. Trump will soon face a stark choice: whether to protect consumers, the ordinary Americans he pledged to defend against a system he criticized as rigged — or to side with that system.

* * *

If Mr. Trump chooses not to preserve a strong, independent bureau that protects consumers, he will have enabled his opponents in four years to attack him not only for failing to live up to his rhetoric, but for having become the leader of what he once condemned.

Ronald Mann on the SCOTUS Oral Argument in Midland Funding v. Johnson Dealing with the FDCPA Act and Bankruptcy

At SCOTUS blog. The headline: Justices appear divided over treatment of stale claims in consumer bankruptcies

"Student debt now affects a staggering number of elderly Americans"

The Washington Post reports:

The number of older Americans taking on student debt on behalf of their children and grandchildren has quadrupled in the past decade, with consumers over 60 now holding $66.7 billion in student loan debt, according to a new report by the Consumer Financial Protection Bureau.

The skyrocketing cost of college has placed a particular burden on older Americans, many of whom are struggling to pay back growing debts in their retirement years, according to the report. Nearly 40 percent of federal student loan borrowers over age 65 are in default, the highest rate for any age group, the data show.

The full article is here.

The Hill: Dem senators to Trump: Don't tell consumer bureau chief 'you're fired'

Here. Excerpt:

Schumer said Trump’s decision to “govern as a hard-right Republican” and possibly replace Cordray breaks his campaign promise to “drain the swamp” by fighting corporate interests on behalf of middle-class Americans.

* * *

The CFPB is currently finalizing rules on arbitration clauses, payday lending and debt collecting. Warren said the push to remove Cordray is spearheaded by industries affected by those rules with the goal of eliminating the pending regulations.

* * *

Democrats say the push for a commission would make the agency effectively powerless. They point to other federal regulatory commissions that lack members because Senate Republicans refuse to approve many of President Obama’s nominees.

Guest Post by Norman I. Silber: Consumer Protection in a Trump Administration: The CPSC and the FCC

Earlier today, in an American Bar Association Antitrust Section webinar chaired by Harvey Saferstein, and with panelists Deborah Goldstein, Center for Responsible Lending, and Daniel D. Sokol, Professor of Law, University of Florida Levin College of Law, Hofstra's Norman I. Silber delivered the remarks that appear below about the Consumer Product Safety Commission and the Federal Communications Commission.  Norm has graciously consented to allow posting of his notes for his talk to the blog. He cautions that this was designed for verbal presentation and that he did not record his sources and therefore can’t footnote but indicated by quotations lines that are taken from others. He is grateful for conversations with many individuals who helped provide him information which he has privately acknowledged.

Weakening the Consumer Product Safety Commission.

As consumer affairs professionals know, the CPSC regulates the sale and manufacture of more than 15,000 different consumer product lines, from cribs to all-terrain vehicles. It fulfills its mission by banning dangerous consumer products, establishing safety requirements for other consumer products, issuing recalls of products already on the market, and researching potential hazards associated with consumer products.  Showcase recalls in the last few years, among hundreds of recalls, include the dangerous flaming Samsung Galaxy smartphones, exploding hover-boards, and IKEA bookcases that tip over. A number of consumer affairs professionals believe that the recall approach is a poor substitute for pre-market clearance and better inspection. The chief problem the Agency has faced is the glacial pace of rule-making, which has stalled rules that by most experts estimation can save many lives without imposing undue expense on consumers and businesses.

In 2008, in a show of strong consumer bipartisanship, connected to tragedies in connection with lead residues, the CPSC was granted extensive new regulatory authorities and mandates to improve consumer product safety through the Consumer Product Safety Improvement Act (CPSIA); new tools and building new capabilities, such as a new public information database and a world-class testing laboratory. Then Senator Obama took a leading role, but it was an accomplishment President Bush took pride in.

Among other things, the 2008 Safety Improvement Act upped the agency’s penalties for failing to comply with recall rules and for permitting unsafe products to enter the market rose to an aggregate limit of $15 million, with adjustments for inflation. Over the past two years, the CPSC has reached multimillion-dollar settlements under its elevated penalty authority.

Now comes the election. There is currently a Democratic majority but President Trump can remove Elliot F. Kaye as chair. But if he does he can’t turn around and appoint another chair because CPSC chairs must be confirmed by Senate and so the chair will remain vacant for some time; likely the commissioners will on their own vote one of two Republicans to be vice chair, and when Kaye is removed, a Republican vice chair will be acting chair. But there will be 3 Democrats until Oct 2017, when a Democratic majority is lost. At that point one can anticipate a de-emphasis on collecting all of the penalties already assessed, and perhaps more permissive attitude about consumer risk-taking.

DC United Withdraws Repressive Season Ticket Holder Contract

Responding to widespread complaints from its consuming public, including some articles on this blog as well as a consumer gripe site, DC United has withdrawn a demand that its season ticket holders sign away the right to talk about the team or post photos of video clips.  Its newly revised proposed contact for season ticketholders is a model of simplicity with no objectionable provisions. 

Credit to the team for responding in this way, but credit also to the many fans who contacted the team to let it know that they were reason to drop their season tickets if need be.

One of the arguments DC United originally made was that its language with respect to posting on social media was standard language borrowed from other sports teams.  I argued in a recent blog post that, to the extent that other teams are maintaining such language in their standard ticket agreements, they risk violating the new federal statute barring agreements in form contracts that forbid consumers from providing "a written, oral, or pictorial review, performance assessment of, or other similar analysis of . . . the goods, services, or conduct of a person by an individual who is party to a form contract.”  Section 2(a)(2).   It won't be DC United that will have to litigate that issue in an appropriate case.