Consumer Law & Policy Blog

Is Trump succeeding on his terms so far?

Read this piece by James Hohmann, which argues that the importance of Trump's loss on health care is being overblown and that, in fact, Trump is largely succeeding so far. It includes this passage:

Despite the chaos and the growing credibility gap, Trump is systematically succeeding in his quest to “deconstruct the administrative state” [quoting Steve Bannon] He’s pursued the most aggressive regulatory rollback since Ronald Reagan, especially on environmental issues, with a series of bills and executive orders. He’s placed devoted ideologues into perches from which they can stop aggressively enforcing laws that conservatives don’t like. By not filling certain posts, he’s ensuring that certain government functions will simply not be performed. His budget proposal spotlighted his desire to make as much of the federal bureaucracy as possible wither on the vine.

 

Legal clash with FTC on marketing of used cars

FairWarning reports:

Can a used car be marketed as “safe” or “certified” even if it has defective air bags, a faulty ignition switch or other potentially lethal problems?

Yes, so long as the used car dealer discloses that the vehicle may be subject to a pending safety recall.

That stance, taken by the Federal Trade Commission, is at the heart of a recent legal settlement with General Motors and two used car dealers over deceptive advertising practices. But it is now being put to the test in a federal court in Washington, DC, by auto safety activists.

The safety groups contended in legal papers filed Friday that the settlement places unaware car buyers, their passengers and others at “the risk of injury or death caused by the defective vehicles.” In essence, the concern is that buyers will have a false sense of security if a car is described as safe and won’t take care of the defect that prompted the recall.

The full article is here.

What's going on with national climate policy?

This article by Alan Rappeport provides details on the Trump Administration's plans to move on to tax legislation and climate policy, after Trump's spectacular failure to repeal and replace the Affordable Care Act. Rappeport says that this week "the administration will issue an executive order that will begin to dismantle a rule issued by former president Obama that sought to slash carbon dioxide emissions and discouraged coal-fired power plants."

We posted a number of weeks ago that the Environmental Protection Agency's website, particularly as to climate change, generally appeared to reflect Obama Administration positions. And, this morning, EPA's website still proclaims that "it is extremely likely that human activities have been the dominant cause of [global] warming." But expect the agency's climate change webpage to change fairly soon. The agency's home page trumpets a joint EPA-Department of Transportation plan to reconsider the Obama Administration's rule to tighten emission standards for cars and light trucks (which was a part of the EPA's effort to address climate change).

 

"I wrote about being a child on Medicaid. A reader called me the N-word."

About I week ago, I posted an opinion piece by consumer reporter Michelle Singletary explaining why Trump's plan to cut medicaid was "disastrous." She's now written an article about readers' vicious reactions to that piece.

A Question I Would Like to Ask PHH's Lawyer, Ted Olson

by Jeff Sovern

We've blogged several times about the House Financial Service Subcommittee hearing on the constitutionality of the CFPB, at which PHH's lawyer Ted Olson, among others, testified.  Now that I have listened to the hearing, I have a few reactions. Personally, I found the questioning by the Democratic members disappointing. For the most part, they did not engage on the constitutional issues.  Instead, they largely focused on the good work of the CFPB, and argued that Mr. Olson, as counsel for a party in the PHH case, had a conflict of interest in testifying on the matter before Congress.  I agree that the representatives should have spent some time pointing out that the CFPB does important work because members of the public who might have been listening might not be aware of that work.  Indeed, one of the witnesses seemed not to know of at least some of it.  But I don't share the view that Mr. Olson's testifying at the hearing was a problem. His representation was disclosed.  Not surprisingly, the views that he expressed (which he said were his own and I believe him) were consistent with his client's views, but so what?  That doesn't mean they aren't worth hearing. I did not find them persuasive, but I wanted to hear what they were and I don't see anything improper about his expressing them at the hearing.  Mr. Olson was an effective advocate for the argument that the Bureau is unconstitutional and surely Congress should hear from effective advocates.

I was disappointed by the failure of the Democrats to push the witnesses more on the constitutional questions. By failing to do so, they might have created the impression that they are unable to defend the Bureau as a constitutional matter, and that is simply wrong. Yes, the Democrats had one witness who made the case that the Bureau is constitutional, Brianne Gorod, Chief Counsel, Constitution Accountability Center, but in my view, the Democrats could have questioned the other witnesses more forcefully on their constitutional arguments. In particular, I wish someone had asked Mr. Olson if the Bureau would pass constitutional muster if it consisted of a commission.  If he said no, then I would follow up by asking why Humphrey's Exec. doesn't resolve that question.  If he said yes, then I would ask Mr. Olson also to explain why a single director structure doesn't enable the president to take care that the laws shall be executed but a commission does, as Humphrey's ruled.  Maybe we will see how he answers those questions during the D.C. Circuit rehearing.

And just to be clear, I wouldn't mind discussing some other matters with Mr. Olson that have nothing to do with the PHH case. He has led an extraordinary life.

Horton Article: Arbitration About Arbitration

David Horton of California, Davis has written Arbitration About Arbitration Stanford Law Review, Vol. 70, (2017 Forthcoming).  Here is the abstract:

Recently, the U.S. Supreme Court’s interpretation of the Federal Arbitration Act (“FAA”) has nearly eliminated consumer and employment class actions, sparking vigorous debate. Yet another important development in federal arbitration law has received less attention. Traditionally, judges granted motions to compel arbitration only after confirming that the parties formed a valid agreement to arbitrate that applies to the underlying lawsuit. But now, through the use of “delegation clauses,” businesses are giving arbitrators the exclusive power to decide these matters. Increasingly, critical questions about the arbitration—including whether the process is fair—are being resolved in arbitration.

This Article demonstrates that judges are struggling with every major issue related to arbitration about arbitration. Indeed, they have splintered over how to determine whether a contract contains a delegation clause, how to gauge the validity of these provisions, and whether arbitrators can decide whether the FAA even applies to a lawsuit. The Article then contends that this doctrinal chaos stems from a single faulty premise.

The Court has opined that delegation provisions are their own freestanding miniature arbitration clauses:

(1) agreements to arbitrate disputes,

(2) over the broader agreement to arbitrate the underlying complaint.

Seen this way, delegation clauses are entitled to the same extraordinary deference enjoyed by conventional arbitration clauses. However, drawing on the FAA’s text, legislative record, and forgotten strands of federal common law, the Article contends that arbitration about arbitration is manifestly different from arbitration about the merits of a case. Finally, the Article explains how acknowledging the ways in which delegation clauses are unique can resolve the many of the questions that are currently dividing courts.

 

 

Congress moves to strike Internet privacy rules ...

... because who doesn't want their online history collected and sold by internet companies?

The New York Times has the story.

"Revised GOP health bill saves less money than original, number of uninsured stays the same"

Here.

New York Bank Ratings Index Created; Lets Consumers Rank Banks by Features They Care About

Ray Brescia of Albany, along with Albany alum Ralph Scunziano, the Empire Justice Center, and the Association for Neighborhood & Housing Development (ANHD) have created a New York Bank Ratings Index.  The web site is here; a report on the project here, and Ray also has a Medium op-ed titled Putting Consumer Protection in the Hands of the Consumer: New York’s New Bank Ratings Index. Here's the report's abstract:

New York State is one of the financial capitals of the world, and individual consumers of banking services have a wide range of commercial banks to choose from, all of which provide a dizzying array of products and services. With the details of many of these products and services buried in the fine print of consumer agreements or in the back pages of bank websites, the consumer is sometimes at a loss when choosing which bank to use as his or her primary bank when looking to open a checking account, use an ATM, send a remittance, or open a credit card account. The New York Bank Ranking Index (NYBRI) attempts to take some of the guesswork out of choosing a bank. It evaluates the nineteen largest banks in New York State by awarding points to each bank based on how well the banks meet consumer needs in twenty consumer-focused categories. In its current form, the NYBRI weighs each of these categories equally. The index then ranks the banks by giving a cumulative score under each category and lists them out highest to lowest. Consumers can also go to the accompanying website, to customize a ranking based on their own preferences in terms of the categories to use in scoring the banks and the relative weights to assign these categories. This report provides background information on the NYBRI, explains the process by which we completed the ranking and scoring for the nineteen largest banks serving individual bank customers in New York State, scores the banks and offers the final ranking, and then supplies the individualized data for each bank in an appendix. While we focus on New York State in this study, other jurisdictions can utilize the methodology used here for their own communities.

Ray adds: This initiative is totally transportable to other communities.  Happy to discuss with anyone the idea of doing that.

 

 

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CFPB fines Experian $3 million for deceiving consumers in marketing credit scores

Still at work, the Consumer Financial Protection Bureau announced today action against credit reporting agency Experian for deceiving consumers about the use of credit scores it sold to consumers. Experian claimed the credit scores it marketed and provided to consumers were used by lenders to make credit decisions. In fact, lenders did not use Experian’s scores to make those decisions. The CFPB ordered Experian to truthfully represent how its credit scores are used. Experian must also pay a civil penalty of $3 million.

The CFPB's press release is here.