Consumer Law & Policy Blog

Neil Sobol asks for your help in updating the survey of law school consumer law offerings

Guest post from Neil Sobol:

Howdy consumer law colleagues:

This posting requests information to help update my survey on consumer laws offerings in law school. In an August 2020 blog,  I forwarded a chart created by my research assistant. The chart was part of a project to update the consumer law offerings chart reported in Jeff Sovern's post in 2019. It was based on my assistant's review of the websites of  201 ABA-accredited law schools. The latest version of the chart is available here. It is intended to reflect for each listed school: (1) "consumer-related classes," which refers to courses that historically contain consumer law topics, (2) "consumer-specific classes," which refers to course offerings that have "consumer" in their names, and (3) consumer law clinical/experiential opportunities.

Because some course information is likely outdated on schools' websites, I request your help. Please send any corrections or comments to nsobol@law.tamu.edu so that I can update the chart. Any input is greatly appreciated.

I intend to present the updated information at the Teaching Consumer Law Conference in Santa Fe in May 2022. Hope to see you there!

Professor Neil Sobol, Texas A&M School of Law

Forbes: Biden's budget does not include money for cancelling student loans

Here. It doesn't mean there won't be targeted loan forgiveness or changes in the IDR program, but so far, it looks as if widespread cancellation (e.g., $50,000 per borrower is not something the president is pushing).

David Dayen's profile of Rohit Chopra in The American Prospect: "Washington's Best Hope"

Here. Dayen paints Chopra as someone who finds ways to get positive things done through hard work and imaginative use of agency powers. How does the industry react to this? Here is one paragraph:

Financial firms didn’t want to see anyone rousing the machinery of the federal government, and they groused about Chopra to anyone and everyone. In a recently uncovered email from 2015, Kevin Modany, then the CEO of ITT Tech, told his lawyers that Chopra was an “economic terrorist” and that he “should be sent to Guantanamo Bay for about a decade of R&R; which should include an aggressive regimen of ‘water sports’!”

Consumer Reports: "I Agreed to What? The Surprising Rights Companies Claim in Terms of Service"

Consumer Reports writes that consumers may "be surprised by some of the clauses in terms of service and end-user license agreements .... A number of them are odd but relatively harmless. [A zombies clause?] In other cases, these agreements try to take away important consumer rights." The article is here.

Lauren Henry Scholz article argues for private claims to enforce privacy rights

Lauren Henry Scholz of Florida State has written Private Rights of Action in Privacy Law, William & Mary Law Review, Forthcoming. Here's the abstract:

Many privacy advocates assume that the key to providing individuals with more privacy protection is strengthening the power government has to directly sanction actors that hurt the privacy interests of citizens. This Article contests the conventional wisdom, arguing that private rights of action are essential for privacy regulation. First, I show how private rights of action make privacy law regime more effective in general. Private rights of action are the most direct regulatory access point to the private sphere. They leverage private expertise and knowledge, create accountability through discovery, and have expressive value in creating privacy-protective norms. Then to illustrate the general principle, I provide examples of how private rights of actions can improve privacy regulation in a suite of key modern privacy problems. We cannot afford to leave private rights of action out of privacy reform.

2021 HMDA data on mortgage lending now available

The Home Mortgage Disclosure Act Modified Loan Application Register data for 2021 are now available on the Federal Financial Institutions Examination Council’s HMDA Platform for approximately 4,316 HMDA filers. The published data contain loan-level information filed by financial institutions, modified to protect consumer privacy.

CFPB issues policy on contractual ‘gag’ clauses and fake review fraud

The Consumer Financial Protection Bureau had issued policy guidance regarding potentially illegal practices related to consumer reviews. "The CFPB seeks to ensure that customers can write reviews, particularly ones posted online, about financial products and services that accurately reflect their opinions and experiences. The guidance also highlights that practices such as posting fake reviews or inserting clauses that forbid a customer from publishing an honest review may violate the Consumer Financial Protection Act."

The CFPB’s guidance describes certain business practices related to customer reviews that are generally unlawful under the Consumer Financial Protection Act, including:

• Contractual ‘Gag’ Clauses: Attempting to silence consumers from posting an online review can undermine fair competition. Banks and financial companies that include clauses in form contracts that forbid a consumer from posting an honest review may be engaged in unfair or deceptive practices.
• Fake Reviews: Markets can be harmed if consumers cannot trust that online reviews are legitimate. Laundering fake reviews in ways that appear completely independent from the company to improve their ratings may constitute a deceptive practice.
• Review Suppression or Manipulation: Consumers cannot easily shop and compare products and services when firms engage in practices to limit the posting of negative reviews or manipulate reviews to trick or confuse consumers. The guidance explains why these practices may be unlawful.

The guidance document is here.

Student essay asks if anyone would have standing to sue in federal court to challenge student loan cancellation

by Jeff Sovern

Jack Hoover, a 3L at Virginia, has written Standing and Student Loan Cancellation, 108 Va. L. Rev. Online (Forthcoming 2022).

Here's the abstract:

As the public policy debate over broad student loan cancellation continues, many have questioned whether the Executive branch has the legal authority to waive the federal government’s claim to up to $1.6 trillion in debt. Some have argued that loan nullification would prompt a years-long battle in the courts. However, commentators and policymakers should not assume that federal courts would have anything at all to say about the legality of federal debt cancellation, as it is likely that no party would have standing to challenge the Executive action. This article considers taxpayers, former borrowers, Congress, state governments, and loan servicers, determining that none of these parties could assert both the Article III standing and the prudential standing required to sustain a suit against the Executive for student loan forgiveness. Even if student loan cancellation never occurs, this “standing dead zone” has broader implications for debt cancellation powers held by department heads across the federal government, as well as the wisdom of current federal standing doctrine.

And who better to look at student loan cancellation than a student? But one thing I wonder is whether a state court with less restrictive standing requirements could hear a challenge, even if the federal courts could not.

Remolina paper on the role of financial regulators in the governance of algorithmic credit scoring

Nydia Remolina of Singapore Management University - Centre for AI & Data Governance has written The Role of Financial Regulators in the Governance of Algorithmic Credit Scoring. Here's the abstract:

The use of algorithmic credit scoring presents opportunities and challenges for lenders, regulators, and consumers. This paper provides an analysis of the perils of the use of AI in lending, such as the problem of discrimination in lending markets that use algorithmic credit scoring, the limited control financial consumers have over the outcomes of AI models due to the current scope of data protection law and financial consumer protection law, the financial exclusion caused by the lack of data from traditionally excluded groups, the regulatory arbitrage in lending markets, and the little oversight of the use of alternative data for algorithmic credit scoring. I provide a comparative overview of the current approaches to algorithmic credit scoring in different jurisdictions such as Kenya, the European Union, the United Kingdom, Hong Kong, Singapore, the United States, Australia, and Brazil to argue that these models do not solve the problems illustrated. To address the problems of algorithmic credit scoring and effectively protect consumers as end users of these models, and therefore, promote access to finance, this paper proposes a set of tools and solutions for financial regulators. First, a testing supervisory process for algorithmic credit scoring models will effectively promote fair lending. Second, to create a right to know the outcomes of the algorithm, including opinion data and inferences, to promote digital self-determination. This solution empowers consumers affected by algorithmic credit scoring so they can verify and challenge the decision made by the AI model. Third, to level the playing field between financial institutions and other lenders that use algorithmic credit scoring. Fourth, to use the sandbox as a test environment for lenders to create data of traditionally excluded groups in a controlled environment. And finally, to foster data sharing and data portability initiatives for credit scoring through open finance schemes in an environment controlled by the financial regulatory authority. Better algorithms, unbiased data, AI regulation, fair lending regulation and AI governance guidelines do not solve the perils of the use of AI for creditworthiness assessment. In contrast, these proposals aim to solve the problems of algorithmic credit scoring in any jurisdiction.

FTC report on e-cigarette sales and advertising, including effect on young people

A Federal Trade Commission report on e-cigarette products "paints a disturbing picture of surging e-cigarette sales and advertising that are likely to damage the health of America’s youth." The FTC found that "flavored cartridges, nicotine concentration, and deep discounting surged between 2015 and 2018, likely fueling increased underage consumption."

The report, which is based on industry data provided for the years 2015 to 2018, shows that total e-cigarette sales, including both disposable units and those using changeable cartridges, increased more than six-fold from $304.2 million to $2.06 billion in those three years alone. The sales of fruit and other flavored e-cigarette cartridges preferred by youth increased seven-fold over that time, and nicotine concentrations in disposable e-cigarette products also increased.

The press release, with a link to the full report, is here.