Consumer Law & Policy Blog

"Too Popular to Pick a Public Fight With"

Many have probably already seen yesterday's article in the New York Times about the Consumer Financial Protection Bureau's popularity getting in the way of Republicans' efforts to weaken it, but just in case...

Relying on emails and other documents obtained in public records requests, the article describes the CFPB's strategy to shield itself from the Trump administration. Part of that effort included "compil[ing] stories from ordinary Americans thanking [the agency] for resolving complaints." The agency knew that many of those stories would come from parts of the country that voted for President Trump.

This is not lost on the White House, which has taken an "uncharacteristically low-key public stance toward the agency." Apparently, the administration considered a "high-profile run on the agency," but after "examin[ing] polling data from political bellwether states," it concluded that the CFPB is "too popular to pick a public fight with."

It really shouldn't be a surprise that the CFPB is popular with the public at large. As the article notes, it's returned nearly $12 billion to 29 million consumers in refunds and cancelled debts. And it's helped individual consumers in numerous other ways, including helping remove a disputed property lien, warding off a debt collector pursuing a medical bill that had been paid, and helping resolve a contested credit card debt. Those are real solutions to real problems that people, no matter their political views, can appreciate.

Despite Claims that CFPB Regs Increase Lending Costs, MBA Reports Mortgage Origination Costs Close to Historic Lows

by Jeff Sovern

Housing Wire reports on mortgage origination costs in a report headlined MBA: The cost to produce a mortgage falls closer to historic lows, with a subhead reading "Independent mortgage bank production profitability improves." 

Reports like this make it difficult to justify claims that the CFPB is significantly adding to lending costs.

Arbitration, Concerted Action, and the Gig Economy

Those who follow the arbitration wars probably know that the upcoming Supreme Court term will kick off with an epic battle in those wars--literally. The first argument on the first Monday in October will be in the consolidated cases of Epic Systems Corp. v. Lewis, Ernst & Young LLP v. Morris, and NLRB v. Murphy Oil Corp.. The cases together pose the question whether the federal labor laws' protection of the right of workers to engage in concerted action can be overridden by an arbitration agreement that prohibits concerted action by barring workers from joining together in any way in litigating their claims.

The National Labor Relations Board (NLRB) has held that arbitration agreements that purport to require workers to arbitrate all claims individually rather than jointly or collectively violate the right to engage in concerted action. After supporting the NLRB's position last year in asking the Supreme Court to decide the issue, the Office of the Solicitor General has switched sides and plans to argue in support of employers who engage in what the NLRB views as an unfair labor practice, leaving the NLRB's position to be presented by its in-house attorneys, as well as by attorneys representing individual workers who seek to bring claims against their employers on a collective basis.

The cases aren't consumer cases per se, but they pose important questions about whether the Federal Arbitration Act (FAA) can be read to require enforcement even of provisions in arbitration clauses that abridge rights explicitly granted by other federal statutes. The position of the employers, now adopted by the Acting Solicitor General, is that the FAA supersedes rights granted by other federal laws unless they expressly say that they supersede the FAA.

Both sides have the support of piles of amicus curiae briefs. One of the most interesting, and unexpected, entries in the list is a brief filed by Susan Fowler, the former Uber engineer who blew the whistle on what she described as the culture of sexism within the company. Fowler's brief describes the use of arbitration agreements requiring purely individual dispute resolution as a means by which companies disempower workers in the gig economy by preventing them from engaging in what has become the primary means of concerted activity for 21st century workers in light of the decline of unions: class action litigation followed by settlement negotiations that substitute for collective bargaining over the terms and conditions of employment.

The Fowler brief is interesting reading, as are many of the other briefs filed in the cases. The case bears watching, to say the least.

 

Federal judge issues permanent nationwide injunction against Obama-era rule giving more employees overtime pay

We've posted several times (for instance, here and here) about the Obama Administration's rule significantly raising the pay threshold that triggers exceptions to the general rule that workers must be paid 1.5 times their ordinary pay for every hour they work over 40 per week. Put simply, the Obama Administration rule meant overtime pay for far more workers.

The rule (1) raised the minimum salary level below which workers have the right to overtime pay from $455/week to $913/week ($47,476 per year), adding about 4.2 million overtime-eligible workers; and (2) would automatically update the threshold every three years, based on wage growth.

Last November, a federal district judge preliminarily enjoined the new rule, finding that it likely lacked a basis in the governing statute (the Fair Labor Standards Act). And now, the same judge has permanently enjoined the rule nationwide for the same reason. And, with Trump in charge, the Labor Department may not appeal, dooming the rule, and eliminating overtime for millions of workers.

Anonymous Users Who Emailed the DisruptJ20 Web Site, and Who Received Emails From That Site, Seek Court Protection for Their Anonymity

by Paul Alan Levy

In a motion for leave to intervene filed today, three anonymous Internet users who sought information from the DisruptJ20 web site, who joined listservs through which such information was communicated, or who volunteered to provide legal support work for the range of nonviolent protest activities advertised on the site, are asking the Superior Court for the District of Columbia to protect their anonymity.

The United States and DreamHost have been negotiating over the terms of the proposed order that will reflect the ruling of Chief Judge Robert Morin at a hearing on the search warrant late last month. It is currently anticipated that the two sides will present rival versions of such an order next week; at that time, intervenors will lay out their legal analysis at greater length.

But at last week’s hearing, no Doe users whose email addresses are subject to the warrant were before the Court, in part because DreamHost has thus far not given any notice to those Internet users. It is apparent, therefore, that intervention is going to be needed to protect those legal interests.