Consumer Law & Policy Blog

CFPB proposes clarifications to mortgage data rule

The Consumer Financial Protection Bureau yesterday issued a proposal to facilitate compliance with the 2015 updates to the Home Mortgage Disclosure Act (HMDA) rule. The proposed changes would help financial institutions comply with the 2015 HMDA Final Rule by clarifying the information they are required to collect and report about their mortgage lending.

HMDA, which was originally enacted in 1975, requires many lenders to report information about the home loans for which they receive applications or that they originate or purchase. The public and regulators can use the information to monitor whether financial institutions are serving the housing needs of their communities, to assist in distributing public-sector investment so as to attract private investment to areas where it is needed, and to identify possible discriminatory lending patterns.

The CFPB's press release is here. The proposed rule is here.

Food safety and the new Administration

From a New York Times op-ed today:

When you bite into a piece of fruit, it should be a mindless pleasure. Sure, that steroidal-looking strawberry with a toothpaste-white interior doesn’t seem right to begin with. But you shouldn’t have to think about childhood brain development when layering it over your cereal.

The Trump administration, in putting chemical industry toadies between our food and public safety, has forced a fresh appraisal of breakfast and other routines that are not supposed to be frightful.

One of the first things this administration did was to rescind a government proposal to ban a pesticide used on much of the fresh food we eat — a chemical compound, chlorpyrifos, found to be harmful to the brain and nervous system of children. This move didn’t get a lot of attention. But when you’re throwing out a half-dozen major lies and missteps a day, it’s tough to compete for airtime.

The full piece is here.

"DeVos dials back consumer protections for student loan borrowers"

The Washington Post reports that Education Secretary Betsy DeVos on Tuesday withdrew a series of policy memos issued by the Obama administration to strengthen consumer protections for student loan borrowers.

The Education Department is in the middle of issuing new contracts to student loan servicing companies that collect payments on behalf of the agency. These middlemen are responsible for placing borrowers in affordable repayment plans and keeping them from defaulting on their loans. But in the face of mounting consumer complaints over poor communication, mismanaged paperwork and delays in processing payments, the previous administration included contract requirements to shore up the quality of servicing. Companies complained that the demands would be expensive and unnecessarily time consuming.

The full article is here.

"Our economy is a hellscape for consumers"

An op-ed on the Washington Post's website today uses the United Airlines incident as a starting point to discuss lack of consumer choice in today's world.

We are told that this is the era of the empowered consumer: The savvy shopper has oodles of time to browse around, comparing prices among various retailers, perhaps consulting Yelp, Glassdoor or the Better Business Bureau. An almost unlimited menu of choices and information means that anything may be purchased, often at a discount from a warehouse on the other side of the world. Service is king, and business-school professors complain of the “tyranny of the consumer.” Better information means more competition, which means lower prices — all features, of course, of an open marketplace ostensibly presided over by a regulatory authority that, while distant, exists to protect our safety.

This vision is a lie.

The full op-ed it here.

"Plenty More Villains at Wells Fargo"

A New York Times editorial today argues that revoking bonuses from two former Wells Fargo executives "is not enough to punish their misconduct, deter wrongdoing by others and restore trust in the bank — or in the rule of law when it comes to investigating and prosecuting bank executives."

The editorial is here.

Trademark Bullying by Louis Vuitton

by Paul Alan Levy

Last year I discussed an attorney fee application that I prepared on behalf of a small company making canvas totes that poke fun of such high-fashion royalty as Louis Vuitton by scrawling the words “My Other Bag” on one side of the totes and placing parody versions of various luxury brands on the other side of the totes.  After District Judge Jesse Furman granted summary judgment dismissing infringement and dilution claims by Louis Vuitton, we argued that the Supreme Court’s decision abrogating the Federal Circuit’s “bad faith” standard for finding patent cases to be “exceptional” hence warranting awards of attorney should apply equally to the Lanham Act’s provision for fee awards in “exceptional cases,” and we pointed to Louis Vuitton’s long history of trademark bullying, well exemplified by its conduct of the litigation against My Other Bag, as justifying an award of attorney fees in this case.

In response to our motion, Louis Vuitton was able to persuade Judge Furman to exercise his Rule 54 discretion to postpone the fee issue until after the Second Circuit heard its appeal from the summary judgment ruling.  At the time, I am sure that seeking a postponement seemed a good idea to the plaintiff, but if anything the record and the legal scene have become even worse for Louis Vuitton: not only did the Second Circuit summarily affirm barely two weeks after oral argument, but during the argument the Second Circuit panel made clear its view that Louis Vuitton’s claims were risible and that this case was plain trademark bullying: “of course you just want to bully them into having to spend the money on a trial . . . if this were a real trial and you tried [your argument] out on a mock jury and you tried that out with some jury consultants, you would be laughed out of the room."  And at this point, five separate circuits have held that the Supreme Court's Octane Fitness decision provides the standard for Lanham Act fee applications.

We refiled our brief seeking an award of attorney fees at the end of last week.

"Wells Fargo to Claw Back $75 Million From 2 Former Executives"

The New York Times reports:

Wells Fargo’s board said on Monday that it would claw back an additional $75 million in compensation from the two executives on whom it pinned most of the blame for the company’s sales scandal: the bank’s former chief executive, John G. Stumpf, and its former head of community banking, Carrie L. Tolstedt.

In a scathing 113-page report that made it clear that all the warning signs of the problem had been glaring, the board released the results of its six-month investigation into the conditions and culture that prompted thousands of Wells Fargo employees to create fraudulent accounts in an effort to meet aggressive sales goals.

The full article is here.

Times: Loans ‘Designed to Fail’: States Say Navient Preyed on Students

Here (behind paywall). Excerpt:

[T]wo state lawsuits filed by the attorneys general in Illinois and Washington, [allege] that Sallie Mae engaged in predatory lending, extending billions of dollars in private loans to students . . .that never should have been made in the first place.

* * *

New details unsealed last month in the state lawsuits against Navient shed light on how Sallie Mae used private subprime loans — some of which it expected to default at rates as high as 92 percent — as a tool to build its business relationships with colleges and universities across the country. From the outset, the lender knew that many borrowers would be unable to repay, government lawyers say, but it still made the loans, ensnaring students in debt traps that have dogged them for more than a decade.

 

Recent announcements of DOJ's Consumer Protection Branch

March 23, 2017 – New York Salesman Sentenced to Prison for Fraudulently Selling Vending Machine Businesses

March 22, 2017 – South Florida Man Pleads Guilty To Mail Fraud In Connection With Jamaican-Based Fraudulent Lottery Scheme

March 22, 2017 – Owner of New England Compounding Center Convicted of Racketeering Leading to Nationwide Fungal Meningitis Outbreak

March 22, 2017 – South Florida Resident Sentenced in Connection With Lottery Fraud Scheme Based in Jamaica

March 15, 2017 – District Court Enters Permanent Injunction Against Virginia Company and Employees to Prevent Distribution of Adulterated Milk Powder Products

March 15, 2017 – District Court Enters Permanent Injunction Against Colorado Companies to Stop Distribution of Adulterated And Misbranded Dietary Supplements and Unapproved and Misbranded Drugs

February 21, 2017 – Georgia Man Pleads Guilty in Odometer Fraud Scheme

February 17, 2017 – Dual Jamaican-U.S. Citizen Sentenced in Connection with Lottery Fraud Scheme Based in Jamaica

February 16, 2017 – United States Files Consent Decree of Permanent Injunction Against a Louisiana Drug and Dietary Supplement Manufacturer to Stop Distribution of Misbranded and Unapproved New Drugs and Misbranded and Adulterated Dietary Supplements

Elizabeth Burch & Myriam Gilles Bloomberg Op-Ed on Proposed Fairness in Class Action Act

Here.  Excerpt:

[T]his bill doesn’t fix what’s ailing the system. Instead, it seeks to eliminate group litigation altogether. If it becomes law, the bill could prevent consumers from litigating together the next time a company like Volkswagen masks its emissions and thwart General Motors’ victims from joining forces to recover if their car ignition turns off while they’re driving. It would deprive consumers of the right to sue when businesses rip them off little by little * * *