Consumer Law & Policy Blog

More Trump CFPB Transition/Landing Team Members Named, Including AEI Manager

by Jeff Sovern

As earlier reported by the CFPB Monitor and elsewhere, President-Elect Trump has named three new members to the CFPB "Landing Team."  One of the members, Kyle Hauptman, is a Senior Development Manager at the American Enterprise Institute. The AEI has on its website some articles that may give clues as to Mr. Hauptman's views, though the pieces are not authored by Mr. Hauptman. Among the pieces are Founding fathers would have wanted to keep CFPB in check (referring to the Dodd-Frank Act, which created the CFPB, as the “Faith in Bureaucracy Act”) and Consumer Financial Protection Bureau proves its critics right. The other new appointees are Consuala “CJ” Jordan, and Julie B. Lindsay.  The Trump team had previously announced the appointment of Paul Atkins.

Adam Levitin: Calls to Fire Cordray are About Shilling for the Financial Industry and to Block Arbitration, Payday Lending Regs

by Jeff Sovern

In a characteristically terrific post at Credit Slips, Georgetown's Adam Levitin explains the real reasons for calls to fire CFPB Director Cordray.  A worthy companion to Adam's recent op-ed at American Banker (free content), What the CFPB 'Commission' Debate Is Really About.   Both worth a read. 

Times Article on a Consumer Movement to Injure Breitbart, Fake News

Here (behind paywall).  Excerpt:

In mid-November, a Twitter group called Sleeping Giants became the hub of the new movement. The Giants and their followers have communicated with more than 1,000 companies and nonprofit groups whose ads appeared on Breitbart, and about 400 of those organizations have promised to remove the site from future ad buys.

* * *

[A] a new consumer movement is rising, and activists believe that where votes failed, wallets may prevail. This struggle is about much more than ads on Breitbart News — it’s about using corporations as shields to protect vulnerable people from bullying and hate crimes.

Pamela Foohey Article on Complaints to the CFPB

Pamela Foohey of Indiana has written Calling on the CFPB for Help: Telling Stories and Consumer Protection, 80 Law & Contemporary Problems (Forthcoming). Here is the abstract:

Since it began operating in 2011, the Consumer Financial Protection Bureau (CFPB) has handled more than a million complaints regarding consumer financial product and services. Beginning in June 2015, the CFPB began publishing consumers’ narratives submitted with their complaints. This Article analyses a random sample of 5,000 of these narratives to assess how people engage with the complaint mechanism in light of the CFPB’s role in processing complaints. I find that people predominately use the complaint function for two distinct purposes: to express their anger and frustration about companies’ practices, or to express sadness and fear about how companies’ practices have impacted their lives. When people write with anger and frustration, they typically direct their comments to the subject company, which aligns with the CFPB’s role in processing complaints. In contrast, when people write with sadness and fear, they often plead with the CFPB for individualized help in solving their broader problems. But the CFPB is not equipped to help people on an individual basis and such is not the goal of its complaint mechanism. Identifying that some consumers seem to expect the CFPB to provide this type of assistance presents an opportunity for the CFPB to address the serious problems that these consumers are voicing and to enhance how it utilizes the complaint data to further its goal of consumer protection. However, the CFPB is but one government agency that allows people to write narratives describing their problems. This Article thus provides suggestions for how agencies generally may mine their narrative databases to help people in need and to advance their missions.

Internet providers push to repeal FCC privacy rules

The Washington Post reports:

Some of the nation's biggest Internet providers are asking the government to roll back a landmark set of privacy regulations it approved last fall — kicking off an effort by the industry and its allies to dismantle key Internet policies of the Obama years.

In a petition filed to federal regulators Monday, a top Washington trade group whose members include Comcast, Charter and Cox argued that the rules should be thrown out.

....

The rules, which passed by a 3-to-2 partisan vote favoring Democrats at the Federal Communications Commission in October, are meant to keep Internet providers such as Comcast, Verizon and others from abusing the behavioral data they collect on customers as they regularly use the Internet.

Information such as your Web browsing history, your geolocation logs and even the content of your emails offer service providers a rich source of potential advertising revenue. That data, along with your health and financial information, can also be sold to marketers and data brokers interested in building a profile of you as a consumer. The FCC's rules restricted Internet providers' ability to use and share this information, in what privacy advocates hailed as a historic victory.

The full article is here.

Ninth Circuit holds that a showing of "administratve feasibility" is not a prerequisite to class certification

In an opinion issued yesterday, the Ninth Circuit held that a named plaintiff need not demonstrate, to support a motion for class certification, an "administratively feasible" way of identifying individual class members.

In Briseno v. ConAgra, the plaintiffs argued that Wesson Oil's “100% Natural” label was false or misleading because Wesson oils are made from bioengineered ingredients. The district court granted class certification, and ConAgra, which manufactures Wesson Oil, appealed. ConAgra that the court erred in certifying the class because the court did not require the named plaintiffs to proffer an administratively feasible way to identify members of the class. The Ninth Circuit held that the language of Federal Rule of Civil Procedure 23 neither provides nor implies that demonstrating an administratively feasible way to identify class members is a prerequisite to class certification. The Ninth Circuit joined the Sixth, Seventh, and Eighth Circuits in declining to adopt an administrative feasibility requirement.

The opinion also emphasizes that the Ninth Circuit has not adopted an “ascertainability” requirement. "Instead, we have addressed the types of alleged definitional deficiencies other courts have referred to as “ascertainability” issues through analysis of Rule  23’s  enumerated  requirements."

The opinion is here.

CFPB Orders TransUnion and Equifax to Pay for Deceiving Consumers in Marketing Credit Scores and Credit Products

The Consumer Financial Protection Bureau has taken enforcement action against Equifax, Inc., TransUnion, and their subsidiaries for deceiving consumers about the usefulness and actual cost of credit scores they sold to consumers. The CFPB found that the companies also lured consumers into costly recurring payments for credit-related products with false promises. The CFPB ordered TransUnion and Equifax to truthfully represent the value of the credit scores they provide and the cost of obtaining those credit scores and other services. Between them, TransUnion and Equifax must pay a total of more than $17.6 million in restitution to consumers, and fines totaling $5.5 million to the CFPB.

The CFPB's press release, with links to the consent orders, is here.

In a related blog post, here, the CFPB explains why offers for your credit score are not all the same.