Consumer Law & Policy Blog

eSupplement for Our Consumer Law Casebook Available

by Jeff Sovern

My co-author, Dee Pridgen, has created a supplement for our casebook to bring it up to date since it is now nearly four years old (we plan to produce a new edition in 2019).  If you want a copy, please email her directly at Pridgen@uwyo.edu.

 

Fix sought for heat deaths of children left in cars

Each year, roughly three dozen children die of heatstroke in unattended vehicles. Yesterday, three congressmen and a coalition of safety groups announced proposed legislation to require alerts in cars as a reminder that there may still be a child in the back.

FairWarning has the story.

The Alliance of Automobile Manufacturers said it would review the legislation and “provide guidance.”

CFPB Alters Plan for Debt Collection Regs

by Jeff Sovern

Last summer, the CFPB issued a document indicating its tentative plan for third-party debt collector regulation, and saying that it was going to move forward on first-party debt collectors separately. Today, CFPB Director Richard Cordray gave a speech saying that in light of feedback the Bureau had received, it has:

now decided to consolidate all the issues of “right consumer, right amount” into the separate rule we will be developing for first-party creditors, which will now cover these intertwined issues for third-party collectors and debt buyers as well. That way, we can address this entire set of considerations, market-wide.

In the meantime, we will be able to move forward more quickly with a proposed rule focused on the remaining issues. These issues, again, are information third-party collectors must disclose to people about the debt collection process and their rights as consumers, and ensuring that third-party collectors treat people with the dignity and respect they deserve. Once we proceed with a proposed rule on these issues, we will return to the subject of collecting the right amount from the right consumer, which is a key objective regardless of who is collecting the debt. * * *

House Financial Services Committee Democrats Reply to Staff Report About Cordray

Yesterday, Allison wrote about the House Financial Services Committee staff report threatening CFPB Director Richard Cordray with contempt charges.  Democrats on the Committee replied here.  Excerpt:

Debunking Republicans’ Alternative Facts:

• Fiction: “Wells Fargo has cooperated in full with the Committee’s investigation to date.” 
• Fact: Wells Fargo has not responded to Democrats’ multiple requests to provide Democratic staff the same meetings with Wells Fargo executives that it provided to Republican staff.
  * * *
• Fiction: The report faults the Consumer Bureau for not including “internal CFPB records…such as internal emails or memoranda relating to its investigation.” 
• Fact: Committee Republicans fail to note that their September 16, 2016 document request did not ask for internal records nor communications. This report is the first time that Committee Republicans have stated that they are seeking these internal Consumer Bureau records.
  
  
• Fiction: “…the Committee asked the Director to brief the Committee about the CFPB’s investigation. … Director Cordray replied that he would not brief the Committee.” 
• Fact: Director Cordray has repeatedly made himself and Consumer Bureau staff available to speak with, brief, and offer hearing testimony to the Committee. In addition, Committee Republicans rejected Director Cordray’s offer to testify at the Committee’s Wells Fargo hearing. 
  
  
• Fiction: Majority Committee staff “…conclude[s] that Director Cordray is in default of the Committee’s Subpoena.” 
• Fact: The Consumer Bureau provided over 57,000 pages of documents in response to the subpoena. Additionally, the Consumer Bureau has repeatedly requested additional guidance from the Committee to ensure that the Committee has received all records that it requested. 

House Passes Bill to Rescue Banks at Expense of Consumers

by Jeff Sovern

The House passed the Financial Choice Act, H.R. 10, which would cripple the CFPB. According to Law360's Evan Weinberger, the vote was 233-186, and as expected followed party lines.

Trump (and Trump's hotel) want to move unfair competition suit to federal court

For our readers who are following the many suits against Trump and are civil procedure buffs:

We've previously posted (here and here) about an unfair competition suit by a D.C. wine bar against Trump in his personal capacity and his new D.C. hotel. The suit was filed in local court in D.C. (the D.C. Superior Court). The complaint raises a single claim -- unfair competition -- under D.C. law. Trump and the hotel have removed the case from D.C. Superior Court to federal court in D.C. Trump says because he's president he is entitled to remove the suit under the federal officer removal statute, 28 U.S.C. 1442. The hotel says that although the suit arises solely under D.C. local law, it may remove the suit because (1) the wine bar's local-law claim raises disputed and substantial federal-law issues, and (2) removal would not disturb the balance between state and federal judicial responsibilities. The wine bar says all this is wrong and has moved to remand the case back to D.C. Superior Court.

To read the briefs on whether the case should go back to D.C. Superior Court, go here, here, here, and here.

Kathleen Engel Op-Ed: Your consumer protections, on the brink of destruction in Congress

Here.  The whole piece is worth a read, but here's an excerpt:

The bill would take away the CFPB’s ability to inspect banks, mortgage brokers, foreclosure relief firms, student and payday lenders, debt collectors, credit reporting agencies and auto financing companies to ensure they accurately disclose credit terms to borrowers and that they comply with laws that protect consumers from fraud and other wrongdoing.

It would transfer oversight of national banks to the Office of the Comptroller of the Currency, which 10 years ago was (supposedly) minding the hen house when lenders were luring home mortgage borrowers into unaffordable loans with deceptive terms.

Instead of restricting unlawful loans, the OCC and other bank regulators turned a blind eye to the disastrous rise in deceptive and unaffordable home loans that ultimately led to the financial crisis.

Nominee to Lead OCC Joseph Otting Criticized by Consumer Advocates

In The New York Times:

Mr. Otting worked closely with Treasury Secretary Steven Mnuchin when the two men ran OneWest. Formerly known as IndyMac, the lender had to be taken over by the federal government in the financial crisis of 2008 and was sold to a group of investors that included Mr. Mnuchin the next year. Mr. Otting was chief executive of the bank from 2010 to 2015, when it was acquired by the CIT Group for $3.4 billion. * * *

Critics have repeatedly raised concerns about OneWest’s foreclosures and use of illegal tactics like “robo-signing” in the wake of the financial crisis. The bank has also faced attacks over the practices of its reverse mortgage subsidiary Financial Freedom, which announced an $89 million settlement with the Justice Department last month.

 

Senate Democrats pressed Mr. Mnuchin to account for the bank’s behavior under his tenure at a heated confirmation hearing in January, and Mr. Otting is likely to face similar scrutiny.

“The president’s choice for watchdog of America’s largest banks is someone who signed a consent order — over shady foreclosure practices — with the very agency he’s been selected to run,” said Senator Sherrod Brown, Democrat of Ohio, referring to a 2011 consent decree between OneWest and the Office of Thrift Supervision, which was later folded into the comptroller’s office.

“If Mr. Otting didn’t deal fairly with the customers at his own bank, it’s difficult to see why he’s the best choice to look out for the interests of customers at more than 1,400 banks and thrifts across the country,” said the senator * * *

CFPB's Cordray threatened with contempt charges by House panel

American Banker reports:

The House Financial Services Committee is threatening to file contempt charges against Consumer Financial Protection Bureau Director Richard Cordray for allegedly lying about the bureau's investigation into the Wells Fargo scandal.

In a 15-page report released Tuesday by Republican staff, the committee claimed that the CFPB has not produced records showing that it conducted a full investigation of Wells’ branch sales practices or that it was aware of problems with phony accounts before the L.A. city attorney took action against the bank.

The full article is here.

 

"The IRS is using private debt collectors. Here’s what you should know."

The Consumer Financial Protection Bureau explains in this blog post.