Consumer Law & Policy Blog

PHH Oral Argument Next Wednesday, the 24th, Could Decide CFPB's Fate

Here is a Reuters story to bring you up to date. And here is California-Irvine professor Leah Litman's take on the case.

Experian ID Theft Survey Reveals Troubling Information

Here.  According to Experian, in "2016, over 15 million Americans were victims of identity theft, up 16 percent from the previous year."  Some upsetting findings:

• Only half (49 percent) of respondents feel they are likely to become a victim of identity theft * * *

• A significant majority of respondents (72 percent) think thieves are only interested in “wealthy people’s identities.”

* * *

• Identity theft victims acknowledged negative impacts to short- and long-term financial goals (37 percent and 27 percent, respectively).

• Of those victimized by identity theft while traveling, 55 percent stated it took from weeks to more than a year to resolve issues related to identity fraud.

 

 

"Making prepaid cards better for everyone"

The Tennessean has this op-ed.

House Expected to Vote On Financial Choice Act to Cripple CFPB (Gulp) in June

Here.

150+ Consumer Protection Academics Join Letter Opposing Financial Choice Act CFPB Provisions

Here.

CBS News: Only 18 AT&T Customers Brought Arbitration Claims Despite Thousands of Overcharging Complaints

Here.  The story reports that AT&T has nearly 150 million customers and that the eighteen claims were filed in the last two years.

UPDATE: See comment by Gregory Gauthier below.

Two Columns Make Strong Case For Preserving Strong CFPB and Against Financial Choice Act

One is by my co-author, Chris Peterson, in the Salt Lake Tribune. Here's an excerpt:

[The Financial Choice Act] imposes the absurd requirement of an exhaustive economic study every time the agency opens a law enforcement case. The bill even creates a special exception prohibiting any law enforcement cases against payday lenders. Most astonishing, the bill actually eliminates the federal prohibition of "deceptive acts or practices" that the CFPB has used in court to provide over 90 percent of its restitution to the public — because, apparently, we need more deception in the consumer finance industry?

The other piece is by LA Times columnist David Lazarus, and headlined Banks, making record piles of cash, plead for 'much-needed regulatory relief'. It responds to claims that the Dodd-Frank Act has created a regulatory burden which has crippled banks.  Excerpts:

• U.S. banks reported record annual profit of $171.3 billion last year, up 5% from a year before, according to the Federal Deposit Insurance Corp. Only 4.2% of the nation’s almost 6,000 banks lost money in 2016 — the lowest percentage since 1995.
• FDIC-insured institutions reported total profit of $43.7 billion in the fourth quarter alone, up nearly 8% from a year earlier. Almost 60% reported year-over-year growth in quarterly earnings.

* * *

• Wells Fargo, which went out of its way to alienate customers with its bogus-accounts scandal, nevertheless saw its first-quarter profit hold steady at $5.5 billion.

“Banks need regulatory relief like a bald man needs a comb,” said Linda Sherry, a spokeswoman for the advocacy group Consumer Action.

Republican members of the House Financial Services Committee who voted to approve Hensarling’s bill received almost 80% more money during the 2016 election cycle from commercial banks and holding companies than Democrats who voted against it, according to the nonpartisan research organization MapLight.

Report finds that 9 in 10 of the highest-risk student loan borrowers were not enrolled in affordable repayment plans

The Consumer Financial Protection Bureau issued a report yesterday analyzing student loan industry data. The report shows that 9 in 10 of the highest-risk borrowers were not enrolled in federal affordable repayment plans. The analysis looks at hundreds of thousands of the highest-risk borrowers who are exiting default and may be eligible for federal programs that allow them to pay based on how much money they make. Student loan companies are responsible for informing borrowers about affordable repayment options that can help them stay on track. The CFPB also found that nearly half of the highest-risk borrowers not enrolled in an affordable repayment plan redefault, compared to less than 10 percent of those who are enrolled.

The CFPB’s report is here.

Disturbing Article from ProPublica: Trump’s New Bank Regulator: Lawyer Who Helped Banks Charge More Fees

Here.  As we have noted before, the OCC plays a role in consumer protection, such as joining with the CFPB and LA City Attorney in the investigation into the Wells Fargo phony accounts.  The whole article is worth a read, but here is an excerpt:

In the early 2000s, banks successfully sued to stop Iowa from limiting their ability to charge ATM fees to non-customers. They also fought off states’ attempts to stop them from charging non-customers to cash checks drawn on the banks’ accounts. In another case, they stopped California from forcing two banks to conduct audits of their own residential mortgages.

What do all these cases have in common? The winning argument in each was that states had no right to impose their laws on federally regulated national banks. And the man who helped make that powerful argument was Keith Noreika — President Trump’s pick to head the federal agency that oversees national banks.

* * *

Noreika is following in the footsteps of his mentor, John Dugan, who worked with Noreika at the corporate law firm Covington & Burling — before himself leaving to head the OCC from 2005 to 2010.

Under Dugan, the OCC was criticized as being too friendly to banks in the face of widespread lending abuses that fueled the financial crisis. While Noreika now heads up the OCC, Dugan is back at Covington, where his bio says he “advises clients on a range of legal matters affected by significantly increased regulatory requirements resulting from the financial crisis.”

CNN Money: LA City Attorney Who Brought First Government Case Against Wells for Phony Accounts "angry about Republican attack on CFPB"

Here. Excerpt:

[LA City Attorney Mike] Feuer said one of the key lessons of the Wells Fargo (WFC) scandal is the need to have a "very viable and muscular CFPB."

* * *

"It's true we brought the case in the first place, but our collaboration with the CFPB enabled there to be nationwide relief for Wells customers," Feuer said.