USA Today Editorial: Republicans side with banks over consumers

by Jeff Sovern

Here.  Excerpt:

Faced with a choice between helping their constituents or helping themselves to a campaign donation haul, House Republicans are siding with deep pockets.

All but one of the House’s 234 Republicans voted last month to gut a powerful agency — the Consumer Financial Protection Bureau — that banks, credit card issuers, debt collectors and other financial players have been seeking to weaken for years. No Democrats voted in favor of the measure.

These special interests routinely shower lawmakers with campaign cash: Commercial banks and their trade association political action committees (PACs) gave Republicans running for federal office in 2016 more than $9 million, nearly 75% of their total giving. Finance and credit company PACs handed over $2.8 million to GOP candidates.

Richard Hunt of the Consumer Bankers Association has an opposing column here. His column focuses on the CFPB's structure and doesn't address the content of the Financial Choice Act, which the USA Today editorial discusses.

Deanne Loonin: Overhauling Federal Student Loan Repayment

Part 1 is here and part 2 is here. Excerpt:

In my years of experience representing student loan borrowers, I have consistently seen servicers putting their own interests, or what they perceive to be the government’s interests, first. They rarely counsel student borrowers about the range of student loan relief programs, too often ignoring the fact that eligible borrowers are legally entitled to relief. As a result, some of the most vulnerable borrowers never know about the lifelines that could help them get a fresh start and climb out from under mountains of student loan debt.

Recent announcements of DOJ's Consumer Protection Branch

June 26, 2017 - Owner of New England Compounding Center Sentenced for Racketeering Leading to Nationwide Fungal Meningitis Outbreak

June 22, 2017 - Pharmacy Owner and Director of Compliance Charged with Defrauding United States and Distributing Adulterated Drugs

June 15, 2017 - Department of Justice Observes World Elder Abuse Awareness Day

June 15, 2017 - District Court Enters Permanent Injunction Against Florida and New Jersey Companies and Senior Managers to Stop the Distribution of Unapproved, Misbranded, and Adulterated Drugs

June 8, 2017 - Former Auto Body Repair Shop Owner Sentenced for Role in Odometer and Title Fraud Scheme

June 6, 2017 - Justice Department, with FTC, Wins Largest-Ever Telemarketing Penalty Against Dish Network

June 2, 2017 - South Florida Man Sentenced in Connection with Lottery Fraud Scheme Based in Jamaica

May 31, 2017 - Georgia Dealer and Title Clerk Sentenced in Odometer Fraud Scheme

May 4, 2017 - District Court Enters Permanent Injunction Against Florida Company and Senior Managers to Stop the Distribution of Misbranded and Adulterated Medicated Animal Feeds

April 10, 2017 - California Twice Convicted Felon Sentenced to Prison for Operating Fake Law Firms That Promised to Help Struggling Homeowners

Enabling Facebook Users to Protect Their Free Speech Rights

by Paul Alan Levy

An important appeal is pending in the District of Columbia Court of Appeals – the highest appellate court in D.C. The federal government served D.C. warrants on Facebook, demanding access to the entirety of 90 days worth of communications in three separate Facebook accounts, including identifying information.  (Presumably, the reason why the case is in local court rather than federal district court is that D.C. felonies are prosecuted in the local courts but by the federal government).  The warrant arrived with a court order forbidding Facebook from disclosing the existence of the warrants to the users so that they could seek judicial protection against the invasion of their free speech rights.  It appears that the warrant was issued by a trial-level judicial officer, that a motion to quash the non-disclosure warrant was denied, and that Facebook appealed.  We know all of this because Facebook was allowed to issue a court-approved notice inviting possible amicus briefs in support of its position.   Other than the court-authorized notice, we don’t know anything about the facts of the case because the entire record is under seal, including the rulings below and Facebook’s own appellate brief.  We do not even know whether Facebook ever sought to block enforcement of the warrants on grounds other than its inability to notify the Doe targets of the subpoena of the assault on their privacy, whether there has been any ruling on the merits of the warrants, or whether Facebook has appealed from any such order.  In fact, the existence of the appeal could not be found on a search of the DC Court of Appeals online docket – the Clerk’s Office confirmed to me this afternoon than outsiders are not supposed to be able to see the case.  The statement of facts in the court-approved notice indicates that the denial of the motion to quash the non-disclosure order also ordered compliance with the warrants, but that this obligation has been stayed pending this appeal.  

Public Citizen has joined an amicus brief prepared by  the ACLU and the ACLU of D.C., supporting Facebook’s appeal. 

Appropriations Bill That Would Harm the CFPB and Consumers Passes House Appropriations Subcommittee

by Jeff Sovern

Next stop should be the full committee, then the House floor. 

The House Appropriations Bill Is Much Worse for Consumers Than Originally Reported

by Jeff Sovern

We posted yesterday about the House Appropriations Bill. I haven't studied the bill, but on a quick look, it contains a number of objectionable provisions from the Financial Choice Act (already passed by the House), including repeal of the CFPB's power to regulate arbitration and payday lenders and to block conduct on the ground that it is deceptive, unfair, or abusive (UDAAP authority). It also eliminates the Bureau's supervisory authority.  More from Law360's Evan Weinberger here. By attaching these provisions to the appropriations bill, which is very likely to pass in at least some form, their supporters increase their chances of getting something through Congress, even if the Financial Choice Act fails of passage.

More on the House Appropriations Bill That Would Make the CFPB More Accountable to Lobbyists

by Jeff Sovern

From The Hill. Excerpt:

A spending bill released Wednesday by the House Appropriations Committee includes major restraints for financial regulatory agencies. * * *

Including the provisions in the spending bill, which is must-pass legislation, increases the odds they could become law.

The measure places the Federal Deposit Insurance Corporation, Consumer Financial Protection Bureau (CFPB), National Credit Union Association, Federal Housing Finance Agency, the Office of the Comptroller of the Currency and regulatory functions of the Federal Reserve under the congressional appropriations process.

For more on why this measure would make the CFPB accountable to lobbyists, see here.

Report Finds Some Arbitration Providers Not Complying with California Arbitration Reporting Law

Here. From the Executive Summary:

32 firms appear to be offering consumer arbitration services in California. Of those, only 11 firms follow the substantive requirements of §1281.96(a) , and of those, only three firms can be said to evidence robust and full compliance with the statutory regime, including §1281.96(b)’s formal requirements as to format, timing and depth of reporting.

Some 12 firms self-reported to us that they were not covered by §1281.96, either due to not performing arbitration services, or for other reasons. 9 firms did not respond to our emails or phone calls; they may not be in business any longer.

 

Can the California Anti-Arbitration Bill Survive FAA Preemption?

by Jeff Sovern

Reuters reports that the bill has passed an Assembly committee, and is expected to pass the Assembly in August (the state Senate has already passed it).  Here's the part I don't understand: if California enacts the law, how can it avoid being preempted under the Federal Arbitration Act, as SCOTUS has interpreted it?  Or is the goal here something else?  I would be grateful if someone could post a comment answering those questions.

Can This Be True? Debt Collector Reported to Seek $77,000 on Original Debt of $145

Here.