Consumer Law & Policy Blog

More on the FTC: Politics and History

The WSJ recently published Companies Seek to Sway Trump Administration on FTC Choice (behind pay wall) about who the next FTC chair will be.  Google's rivals want Utah AG Sean Reyes, while acting chair Maureen Ohlhausen remains a possibility. Commissioner Ohlhausen is seen as more accommodating to Google  because of an earlier antitrust decision in which she participated. Meanwhile, for more on the FTC's functioning and the lessons to draw from it, see Mark Budnitz The FTC’s Consumer Protection Program During the Miller Years: Lessons for Administrative Agency Structure and Operation, 46 Catholic U Law Rev, 371 (1997).

Leaked "Governors only" report presented to the National Governors Association shows that millions would lose health coverage under republican proposal to replace the Affordable Care Act

Read the leaked report. According to this article by Sarah Kliff, the report, produced by the health research firm Avalere Health and the consulting firm McKinsey and Company

includes graphs on what the Republican plan to overhaul Obamacare’s tax credits, generally making them less generous, would do. [The report's projections] are based on the recent 19-page proposal that Republican leadership released about their plan to repeal and replace Obamacare. In particular, [the report] look[s] at the effect of switching from income-based tax credits (which give poor people more help) to age-based tax credits, where everyone would get the same amount.

When driverless cars crash, who gets the blame and pays the damages?

That's the name of this Washington Post article by Ashley Halsey III. Among other things, Halsey discusses the research of law professor Bryant Smith, who has written Automated Driving and Product Liability, which Halsey calls "the most definitive public legal research to date on autonomous cars." Halsey identifies seven basic insights from Smith's research:

●There will be a shift from driver liability to product liability, making the automotive industry the primary liability stakeholders.

●When manufacturers imply their automated systems are at least as safe as a human driver, they may face a misrepresentation suit in cases that contradict that expectation.

●The argument that an automated system performed unreliably will be central to personal-injury claims.

●A key question in litigation will be whether a human driver or a comparable automated system would have performed better than the automated system in question.

●Another key question: Could a reasonable change in a vehicle’s automated system have prevented the crash?

●There could be a higher standard for automated vehicles. Smith cites a hypothetical case in which two cars collide at an intersection. One of the cars ran a stop sign, but it might be argued that systems in the other car should have recognized that the first car was going so fast that it would not stop at the sign. So, should that car share blame for the crash?

●In the shift from driver liability to product liability, plaintiffs would pursue significant injury claims and usually recover less, but if they prevail, they would receive higher damages. That’s largely because an unprecedented level of data on the cause of the crash will be stored in the vehicles’ computers, virtually replacing the post-crash investigation by a police officer who didn’t witness the incident.

Another Trump executive order on regulations

It was issued on Friday, February 24, and you can read it here. The order requires most federal agencies to appoint a "Regulatory Reform Officer" and create a "Regulatory Reform Task Force" to review and possibly ditch or modify existing regulations. For press on the new order, go here, here, and here.

Bloomberg BNA: Chastened FTC May Foretell Future of CFPB

Here. 

AmBanker: CFPB faces Catch-22 on pending arbitration rule

Here (behind paywall). Excerpt:

"* * * Director Cordray has been reluctant to issue a final arbitration rule, is because I think he realizes that there is a very high likelihood of it being overridden," said Alan Kaplinsky, a partner at the law firm Ballard Spahr. * * *

It's also not a guarantee that the arbitration rule would be rolled back if it is released. * * *

Lawmakers have also targeted other CFPB rules. Sen. David Perdue, R-Ga., is attempting to use the review act strategy to repeal a CFPB rule regulating prepaid cards. So far, however, Perdue has found little support for his efforts.

"We are not convinced anybody is really going to try and move that prepaid card CRA," [Lauren] Saunders at the National Consumer Law Center said. "Most of the prepaid card industry is just fine with the rule and getting ready to comply with it, and only one fringe issuer wants to save $80 million in overdraft fees. So I am not sure it is even going to come up for a vote, and we think we can get the votes to defeat it." * * *

"If the CFPB were to finalize an arbitration rule I would think we will witness a huge amount of industry pressure" to use the Congressional Review Act to repeal it, Kaplinsky said. "It is going to be nothing like whatever forces are being brought to bear to override the prepaid rule."

Regulations targeted by big business

The Business Roundtable, an association of CEOs, sent President Trump yesterday a list of rules it wants delayed, altered or repealed. Prominent among the rules listed are protections for workers and the environment, along with the net neutrality rule and some Affordable Care Act rules.

The list is available here. USA Today has the story.

"FTC, Maine Attorney General Shut Down Web of Deceptive Supplement Sellers"

The Federal Trade Commission and the Maine Office of the Attorney General announced three settlements with dietary supplement marketers who allegedly used radio infomercials deceptively formatted as talk shows and print ads featuring fictitious endorsers to advertise supplements purporting to improve memory and to reduce back and joint pain.

The three court orders resolving charges against six of the nine defendants named in the complaint bar them from making similar deceptive claims, and prohibit them from engaging in a wide range of marketing practices that have caused serious financial injury to consumers.

The FTC and Maine AG allege that defendants XXL Impressions LLC, Jeffrey R. Powlowsky, J2 Response LLP, Justin Bumann, Justin Steinle, Synergixx, LLC, Charlie Fusco, Ronald Jahner, and Brazos Minshew made false and misleading claims that CogniPrin: 1) reverses mental decline by 12 years; 2) improves memory by 44 percent; and 3)  improves memory in as little as three weeks and is clinically proven to improve memory; and that FlexiPrin: 1) reduces joint and back pain, inflammation, and stiffness in as little as two hours; 2) rebuilds damaged joints and cartilage and; 3) has been clinically proven to reduce the need for medication in 80 percent of users and to reduce morning joint stiffness in all users.

The FTC's full release is here.

CFPB Critics Make Unpersuasive Arguments that Business as Usual at the CFPB Is Not Good for Consumers

by Jeff Sovern

At Real Clear Politics, by George Masonites Hester Pierce and Vera Soliman.  The arguments (with my editorializing on some points) are that the Bureau's payday lending rule would put some such lenders out of business (would those be the lenders that ensnare consumers in a never-ending debt trap?), that the Bureau collects too much information about consumers (would that be the information that the companies that deal with consumers have?), that the Bureau is trying to stop lenders who finance car loans from buying car loans (would those be discriminatory loans?), that the Bureau is exceeding its powers by trying to collect information about for-profit colleges engaging in unlawful acts, that the Bureau violated due process by retroactively changing its interpretation of the law and applying its view to PHH's conduct, that the Bureau politicized consumer protection, that the Bureau was too slow to stop Wells Fargo (perhaps the Bureau should have acted faster but if it had, and if it had made a mistake, wouldn't we now be hearing about that mistake?).  I look forward to hearing Bureau critics saying whether the millions of consumers who have been paid billions of dollars in redress because of the Bureau should give that money back and what will happen to such consumers in the future if the Bureau is abolished or neutered.  Not to mention the other consumers who won't need redress because financial institutions behave better because of the Bureau's past interventions. 

The future of the Affordable Care Act

There's a lot out there that you've no doubt read about the difficulties for Republicans in actually repealing the Affordable Care Act. Surprise, surprise: It's not as easy as saying "Public Law 111-148, as amended, is hereby repealed." (Gotta have that "hereby.") One problem (among many): People may not like "Obamacare" in the abstract -- and that view may not be as widely held as it used to be -- but a lot of them like its key provisions.

And when former Speaker of the House John Boehner says that a quick repeal and replacement of Obamacare is just "happy talk" and "most of the framework of the Affordable Care Act … [is] going to be there" after all is said and done, that may tell you something.