How private equity firms make money on unsolicited loans to cash-strapped Americans

The Washington Post recently reported on a phenomenon I had not previously been aware of: mass-mailing checks to strangers, that when cashed become high-interest loans. As a trainee at one firm described it, "basically a way of monetizing poor people."

The article is here.

HHS stats Indicate Affordable Care Act still working well for most people

That's explained by columnist Michael Hiltzik in Trump's own figures show that Obamacare is working well for the vast majority of enrollees:

President Trump brags that he has “gutted” the Affordable Care Act, but statistics released this week by his own Department of Health and Human Services show that it’s holding up well against his onslaught, with nearly 90% of all enrollees experiencing affordable, stable or even declining premiums.

Middle-class consumers who make too much money to obtain ACA subsidies are being hurt, however, in the face of shrinking competition and higher premiums. Hiltzik's article discusses proposals to extend the subsidies to help more people pay premiums.

Are straws bad for consumer health, not just the environment?

Our readers are likely aware of the recent controversy about plastic straws. They are bad for the environment (go, for instance, here and here). Seattle recently banned their use (along with the use of plastic utensils) at bars and restaurants. As one advocacy group puts it:

Plastic straws are really bad for the ocean. We use over 500 million every day in America, and most of those end up in our oceans, polluting the water and killing marine life. We want to encourage people to stop using plastic straws for good. If we don’t act now, by the year 2050 there will be more plastic in the ocean than fish.

But does use of straws also harm our health? This piece in the Washington Post by Christy Brissette says yes. Brissette maintains that the potential adverse health effects range from gas and bloating to ingestion of toxic chemicals.

"Enforcing the Fair Credit Reporting Act Through Private Actors"

The Regulatory Review has this article.

NBC News Story About How Potential SCOTUS Nominee Brett Kavanaugh "could reverse a century of financial regulation"

by Jeff Sovern

Here.  Kavanaugh, of course, took the position in PHH that the CFPB is unconstitutional as currently structured.  Whether other potential nominees would have felt differently if they had decided PHH is unknown.

Conservative Kraninger Critic's Op-Ed

by Jeff Sovern

I don't often agree with J.W. Verret of George Mason, who formerly served as chief economist and counsel to Jeb Hensarling's House Financial Services Committee. But his warnings on CFPB director-nominee Kathy Kraninger deserve attention. Now he has written an op-ed for the National Review, Kathy Kraninger Is the Wrong Choice to Lead the CFPB.  An excerpt:

Kraninger’s first exposure to most of the rules promulgated by the CFPB will, by all appearances, come during preparation for her confirmation hearings. Law students currently doing summer clerkships at the CFPB will have more experience with consumer-credit regulation than the nominee to lead the bureau.

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Administration supporters have begun to imply that opposition to Kraninger is a matter of her gender, as Bush’s backers once implied that Miers’s critics disapproved of a woman serving on the Supreme Court. But President Trump has successfully appointed highly qualified women to other financial-regulatory roles, like Chair McWilliams at the FDIC and Commissioner Peirce at the SEC. Playing the gender card simply won’t fly when Kraninger is so thoroughly unqualified to lead the CFPB.

California Supreme Court Reverses Order Compelling Yelp to Comply with Order Compelling User to Remove a Defamatory Review

by Paul Alan Levy

In Hassell v. Bird, the California Supreme Court held this morning, by a narrow margin of four votes to three, that section 230 of the Communications Decency Act protects Yelp against an injunction compelling it to comply with an injunction that had previously been issued against a Yelp user who had been found (by a default judgment) to have defamed a lawyer with whose work on her behalf the Yelp user had denounced in an online review.

The plurality opinion by Chief Justice Cantil-Sakauye (which attracted two other votes), as well as a concurring opinion by Justice Kruger, holds that on the facts of this case, the injunction effectively treats Yelp as the publisher of a review authored by another by subjecting it to injunctive relief based on a decision that Yelp had previously made to allow Bird to post her review on Yelp’s local-business-review platform, in violation of section 230 of the Communications Decency Act. Vigorous dissenting opinions complaining that the attorney-plaintiff was unfairly being deprived of an effective remedy against defamation were filed by Justice Liu, who would have affirmed outright, and by Justice Cuéllar (joined by a second member of the panel, a Court of Appeal Justice sitting by designation), who would have vacated the Court of Appeal’s ruling and remanded to allow the trial court to make findings that could have better supported an award of injunctive relief against Yelp,

Paper on the Use of Proxies to Determine Race/Ethnicity in Assessing Fair Lending

Yan Zhang of the Office of the Comptroller of the Currency (OCC) has written Assessing Fair Lending Risks Using Race/Ethnicity Proxies, 64 Management Science (January 2018). Here is the abstract:

Fair lending analysis of non-mortgage credit products often involves proxying for race/ethnicity since such information is not required to be reported. Using mortgage data, this paper evaluates a series of proxy approaches (geo, surname, geo-surname, and BISG) as compared with the race/ethnicity reported under HMDA. The BISG proxy predicts the reported race/ethnicity the best as judged by prediction bias, correlation coefficient, and discriminatory power. In assessing fair lending risks where classification of race/ethnicity is called for, we propose the BISG maximum classification, which produces a more accurate estimation of mortgage pricing disparities than the current practices. The above conclusions withhold various robustness tests. Additional analysis is performed to assess the proxies on non-mortgage credits by leveraging consumer credit bureau data.

SCOTUS Takes New FDCPA Case

The issue is whether the FDCPA applies to non-judicial foreclosure proceedings. The case is Obduskey v. McCarthy & Holthus LLP.  More from SCOTUSBlog here.

Not even consumer law professors routinely read consumer contracts and disclosures.

by Jeff Sovern

When I surveyed consumer law professors about the content of their courses, I also asked them whether they read consumer contracts and mandated disclosures in their personal lives.  Here is an excerpt, but the article has more:

Not one professor reported always reading contracts or disclosures. In contrast, 57% said they rarely or never read contracts and 48% said they rarely or never read required disclosures. Less than one professor in seven said they usually read contracts or disclosures, and about a third said they sometimes read them.

* * *

If so few consumer law professors read contracts, it is hard to imagine who might. Most writing is written to be read. Consumer contracts and disclosures are apparently written for some other purpose.