Consumer Law & Policy Blog

Advice for avoiding coronavirus scams

The Federal Trade Commission has this page linking to information, blog posts, and other resources about coronavirus scams and how to avoid them, including scams concerning treatments, vaccines, and testing.

Adam Levitin: "The Miscalculations Underlying Miller & Zywicki's Payday Loan Paper"

Over at Credit Slips, law prof Adam Levitin has posted The Miscalculations Underlying Miller & Zywicki's Payday Loan Paper.

The beginning of Levitin's post will give you a sense of it:

Earlier this month Professors Todd Zywicki and Thomas Miller, Jr. wrote an op-ed in the Wall Street Journal arguing against payday loan regulation, based on their new empirical paper. Miller & Zywicki wrote:

Our findings will startle the rule writers at the CFPB. Contrary to the research cited in the CFPB’s 2017 rule, which claimed that “loans are almost always made at the maximum rate permitted,” we found that neither fees paid nor loan amounts inexorably rose to maximum allowable levels when those allowable levels were reasonable.

The implication is that there must be price competition among payday lenders with supply and demand setting prices, vitiating the need for regulation.

The problem is that Miller and Zywicki have incorrectly calculated the maximum fees permitted in numerous states.

Recent news on student loan debt and debt forgiveness

ABC reports that "Over 70,000 student borrowers have qualified for debt forgiveness since the Education Department overhauled the program last fall. But another deadline is looming."

While CNBC reports that "Majority of borrowers say taking on federal student loan debt is not worth it."

Also from a CNBC survey, "Most Americans want Biden to prioritize student loan forgiveness."

Yet Business Insider reports that the Department of Education's plan for making college more affordable does not prioritize loan forgiveness.

And Syracuse.com explains who qualifies -- and how -- for student-loan cancellation under the Navient settlement with state attorneys general announced erlier this month.

"Buy now, pay later schemes are catching the eye of consumers, and of federal regulators"

The Guardian reports that "Industry says no-interest BNPL loans are more equitable than credit cards but consumers say they can be a spending trap." The article is here.

New Experian tool will let consumers create their own credit reports

Experian is introducing a program that will allow consumers to create their own credit reports from scratch, the Wall Street Journal reports (subscription required).

Fast Company explains: "The program, called Go, will involve customers linking 'recurring nondebt bills' (think cell phone payments, utility bills, or even bank accounts just generally) to provide the foundation on which to build a credit score. The process is aimed at converting consumers from being invisible to banks to having a credit record and an increased chance of loan approval." The full article is here.

CFPB request for information on fees imposed by providers of consumer financial products

The Consumer Financial Protection Bureau today issued a request for information as it considers reducing "exploitative junk fees charged by banks and financial companies." As examples of the fees it is examining, the agency lists "back-end fees might obscure the true cost of a product and undermine a competitive market," such as "resort" or "service" fees added to hotel bills, punitive late fees charged by major credit card companies, and overdraft and non-sufficient funds (NSF) fees.

The CFPB is seeking information about people’s experiences with fees associated with their bank, credit union, prepaid or credit card account, mortgage, loan, or payment transfers, including:

• Fees for things people believed were covered by the baseline price of a product or service
• Unexpected fees for a product or service
• Fees that seemed too high for the purported service
• Fees where it was unclear why they were charged

The information request is here. A related press release is here.

Two FTC actions today

The Federal Trade Commission announced two actions today of potential interest:

Fashion Nova will Pay $4.2 Million as part of Settlement of FTC Allegations it Blocked Negative Reviews of Products

FTC Returns More Than $3.7 Million To Consumers Harmed by Online Lender Avant

Nancy Kim explains the TLDR bill (but I didn't read her post)

by Jeff Sovern

Over at the ContractsProf Blog. The bill would provide a short form and a diagram for Terms of Service. But without consumer testing, who knows if consumers would pay attention even to the short form or diagram.

CFPB to examine colleges’ in-house lending practices

The Consumer Financial Protection Bureau will be examining the operations of post-secondary schools, such as for-profit colleges, that extend private loans directly to students. The agency explained: "The CFPB is issuing an update to its exam procedures including a new section on institutional student loans. As the CFPB begins its supervision, the exam procedures inform industry about practices that CFPB examiners will review, including placing enrollment restrictions, withholding transcripts, improperly accelerating payments, failing to issue refunds, and maintaining improper lending relationships." Details are here.

Wanna work for the National Consumer Law Center doing important work on student loans?

The National Consumer Law Center is hiring for a "Public Interest Consumer Attorney to Lead NCLC’s Student Loan Project." So, if you want to work for this great organization on that project, learn more here.