Did you know that "relying on race-based data to calculate tort damages is ... standard practice"?

That's a quote from the abstract of Valuing Black Lives: A Constitutional Challenge to the Use of Race-Based Tables in Calculating Tort Damages by law profs Kim Yuracko and Ronen Avraham. Here's the full abstract:

In 2011, a young couple eagerly expecting the birth of their first child moved into an apartment in Brooklyn, New York, excited to have a new home for their growing family. Their child, a son, was born healthy soon thereafter. One year later, however, the couple received devastating news. A routine medical exam had detected lead in their young son’s blood. It turned out that the dust from lead paint in their new home had been quietly poisoning their baby. The family quickly moved out, but permanent damage to the baby’s central nervous system had been done. Over the next several years he would manifest significant cognitive delays as well as severe social and emotional impairments. The baby’s mother sued and the landlord was found negligent.

In calculating damages, the critical question for the jury was how much would this young child have earned over the course of his life had he not become injured. In answering this question, experts for both the plaintiff and the defendant took into consideration, albeit to different extents, the fact that the baby was Hispanic and used this fact to offer lower damage estimates than they would have had the baby been white. Relying on race-based data to calculate tort damages is, after all, standard practice. The only thing unusual about the case was that the judge, Jack Weinstein, of the Eastern District of New [York], refused to allow it.

Ralph Nader's response to United's decision to maul one of its passengers for having the temerity to remain in a seat he paid for

Nader -- who took the airlines all the way to the Supreme Court way back when, and won -- has written this USA Today op-ed on the use of consumer power to bring the airlines down a few notches. 

Cortez Article: Regulation by Database

Nathan Cortez of SMU has written Regulation by Database, University of Colorado Law Review, Vol. 89, 2017. Here is the abstract:

The federal government currently publishes 195,245 searchable databases online, a number of which include information about private parties that is negative or unflattering in some way. Federal agencies increasingly publish adverse data not just to inform the public or promote transparency, but to pursue regulatory ends ⎯ to change the underlying behavior being reported. Such "regulation by database" has become a preferred method of regulation in recent years, despite scant attention from policymakers, courts, or scholars on its appropriate uses and safeguards.

This Article, then, evaluates the aspirations and burdens of regulation by database. Based on case studies of six important data sets (published by the CFPB, CPSC, EPA, FEC, FDA, and Medicare), the article proposes what I call "Good Government Data Practices" to ensure that databases are reliable, useful, and fair. More optimal data disclosures require careful design choices that consider both data inputs and outputs, including how to gather and process data, how to characterize them, and how to present them. The article envisions a decidedly modern role for government agencies as data "stewards" rather than as mere publishers or repositories.

Agency databases have proliferated on the belief that markets, regulation, and even democracy all require transparency, that sunlight is the best disinfectant. But as transparency has moved online ⎯ becoming more pervasive, more powerful, and more burdened with regulatory dimensions ⎯ we also must recognize that sunlight can also blind or even burn. It is in this spirit that I call for policymakers to embrace the government’s role as a data "steward," a sentinel that helps maximize the quality of data inputs and outputs via tailored procedures. The more reliable government data are, the more they can enlighten us and perhaps even deter unwanted behavior.

How Effective Are Threats in Debt Collection? Experiment Finds Threats of Prosecution for Nonpayment of Taxes More Effective Than Other Messsages Tested

Bloomberg reports in a story headlined How Detroit Deadbeats Taught Tax Collectors That Threats Really Work, on a study by Ben S. Meiselman titled Ghostbusting in Detroit: Evidence on Nonfilers from a Controlled Field Experiment.  No wonder some debt collectors use threats!

"Don’t let Congress block consumer protections for prepaid card users"

Washington Post columnist MIchelle Singletary warns: "If you use a prepaid card — and millions of you do — take heed, because there’s an effort in Congress to block new rules that would give you the kind of federal protections afforded to debit and credit card users.

Her full column is here.

Financial Choice Act 2 Draft Now Out: More Like a Bank Protection Act

by Jeff Sovern

Here.  As previously reported on the blog, it would eliminate the CFPB's power to stop unfair, deceptive, or abusive practices (section 736)--that is, the power the Bureau used to stop Wells Fargo from opening sham accounts--and to regulate arbitration (section 738)--that is, the section that would give the CFPB the power to preserve class actions against bad actors in the financial industry. So if another bank wanted to do what Wells did, the Bureau and private plaintiffs who wanted to bring a class action would be powerless to do anything about it.  Of course, the Office of the Comptroller also fined Wells.  But it was the CFPB that brought the OCC into the matter and the OCC has now issued a report indicating that it knew about the problem as early as 2005--eleven years before it brought its enforcement action.  The bill has many other defects as well. The House Financial Services Committee will hold a hearing on the bill next Wednesday. No word on who the witnesses will be.  While the House may pass the bill, the Senate is less likely to do so, at least in this form, as long as the bill is subject to a filibuster.

Payday Loan Customers Support Regulation

Opponents of payday loan reform argue that the payday loan industry benefits its customers by providing access to credit for customers who could not otherwise obtain it, and that it is paternalistic to deny consumers the opportunity to afford themselves of these benefits.

Payday loan customers, however, have a different view: Bring on the “paternalism.” A Pew Charitable Trust survey shows that 7 in 10 payday loan consumers support regulation to prevent industry abuses that result in typical borrowers paying about $520 in fees and interest annually on loan balances of about $375.

According to the survey, borrowers are particularly supportive of regulatory changes that would allow banks and credit unions to offer small installment loans to customers with poor credit—loans that would still be expensive compared to those offered borrowers with better credit, but would be six times less costly than payday loans and less likely to suck borrowers into the cycle of repeatedly taking out loans (and incurring the accompanying fees) to pay off loan balances within the two weeks required by most payday lenders.

Borrowers also would support the kind of reforms enacted in 2010 in Colorado, which required that lenders allow more time for repayment and limited fees. The result was that over half of Colorado's payday lenders shut their doors, but the remaining lenders doubled their number of customers while charging lower fees, saving consumers over $40 million a year. By a 9 to 1 margin, payday loan customers agreed that that outcome was a good thing.

Debt Collectors Using Even Newer Technology to Seek Payment

NerdWallet reports here about the leaving of voicemails without ever calling--to evade limits on phone calls--and avatars, among other things.  

Op-Ed Argues for Rescission of CFPB Prepaid Cards Reg Because It Gives Same Protections Credit Cardholders Have

by Jeff Sovern

Earlier, Allison posted a link to an op-ed opposing rescission of the CFPB's prepaid card rule. For readers who would like to hear what opponents of the prepaid card rule argue, here is an op-ed in The Hill by Andrew Langer of the Institute for Liberty (I wonder who provides their funding). Excerpt:

 [T]he rules seek to impose the same kinds of regulations on prepaid cards that have applied to credit cards and checking accounts. Implementing those requirements on prepaid cards will increase the cost of providing such services to consumers, directly leading to higher costs for consumers who use prepaid card services.

Imagine that!  Giving the users of prepaid card the same protections that credit cardholders and checking account customers have! What were they thinking?

Center for American Progress Report on the Proposed Financial Choice Act

Here.  Excerpt:

The CHOICE Act also rejects the painful lessons about toxic financial products from the financial crisis and Great Recession in which 10 million families lost their homes and Americans collectively lost $19 trillion in wealth. Instead of continuing post-crisis reforms that have ensured the availability of safe and affordable financial products, it would give a free pass to financial institutions to once again sell harmful products that wreck family balance sheets, as well as entire communities, without fear of getting caught.