House passes tort deform and class-action bills

This article by Kimberly Kindy discusses the basics of two bills that recently passed the House of Representatives concerning the state-law tort system and a class-action bill that would go beyond the Class Action Fairness Act of 2005 and move more class actions from state court to federal court. Both bills operate by imposing federal law and procedure -- federal power, that is -- on things traditionally done at the state level. The article also describes two other bills soon to be acted on by the House that would further impair the state-law civil justice system, both as to class actions and as to tort law more generally.

Trump Seems Uninformed During Discussions of CFPB, Firing Cordray with Community Bankers

by Jeff Sovern

The American Banker article is headlined Trump discussed Cordray's future in community bank meeting (free content).  Excerpt:

At one point, Trump expressed to the group that many had urged him to oust Cordray, but the president was not sure it was worth the political backlash. But Trump was apparently under the impression that Cordray’s term would be up soon.

Informed by Treasury Secretary Steven Mnuchin, who attended the meeting along with Gary Cohn, the White House’s chief economic adviser, that Cordray’s term lasts until July 2018, Trump asked whether anything could be done before then. Cohn said he and Mnuchin were working on the issue, while raising the prospect that Cordray could voluntarily depart to run for office in his home state of Ohio, according to participants in the meeting.

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They also discussed the structure of the CFPB. Republicans have sought to replace the single director with a five-member board, though their enthusiasm for that idea has waned after Trump won the election.

“Both Treasury Secretary Mnuchin and Mr. Cohn were very engaged with CFPB,” [ValueBank Texas CEO Scott] Heitkamp said. “We talked about a five-member board and [Trump] was very engaged with trying to understand” the benefits of a five-member board.

And WSJ reports:

[A] community banker complained to Mr. Trump about a mortgage regulation adopted after the financial crisis.

Mr. Trump turned to his top economic aides, Treasury Secretary Steven Mnuchin and White House National Economic Council Director Gary Cohn, according to people who attended the meeting.

 “Can I take care of that with an executive order?” Mr. Trump asked.

“No, Mr. President,” Mr. Mnuchin replied, explaining that the so-called qualified mortgage rules are written by independent regulators.

If the reports are accurate, Trump doesn't seem well-informed about these matters.

New CFPB Report Details Problems and Recent Reforms at Consumer Reporting Companies

A March 2017 report by the Consumer Financial Protection Bureau sets out serious problems uncovered by examinations at the Big Three consumer reporting companies (Experian, TransUnion, and Equifax) and details significant new reforms that these companies must implement to protect consumers. 

 

This article by National Consumer Law Center staff attorney Chi Chi Wu walks through the problems and the reforms required by the three credit reporting agencies and their furnishers that ultimately could benefit up to 11 million consumers who have serious errors in their credit reports. 

"Laziness isn’t why people are poor. And iPhones aren’t why they lack health care."

Responding to Rep. Chaffetz's statement suggesting that poor people cannot afford health care because they choose to buy iPhones, an op-ed by Stephen in the Washington Post explains that "the real reasons people suffer poverty don't reflect well on the United States."

The op-ed is here.

Nehf Article on Arbitration's Impact on the Common Law's Regulation of Standard Terms in Consumer Contracts

James P. Nehf of Indiana has written The Impact of Mandatory Arbitration on the Common Law Regulation of Standard Terms in Consumer Contracts, 85 Geo. Wash. Law Review (2017). Here is the abstract:

The focus of this paper is the regulation of standard terms in consumer contracts at common law, i.e., judges deciding cases in published opinions. In particular, I focus on the two most important common law doctrines in this area — unconscionability and good faith — and to a lesser extent on court decisions that interpret consumer statutes. They have all played a central role in regulating standard terms in consumer contracts over the years, yet their continuing role is being threatened by the proliferation of mandatory arbitration provisions in consumer contracts. If this trend continues, the ability of courts to further develop contract doctrine in consumer transactions may be severely limited. I begin with a discussion of the role that common law plays in regulating consumer transactions. I then discuss how the unconscionability and good faith doctrines have evolved as limitations on standard terms in consumer contracts. Next I discuss the increasing use of mandatory arbitration clauses in consumer contracts and the likely effects of this trend on consumer contract litigation. Toward the end of the paper, I explore what this might mean going forward if the common law of unconscionability and good faith in consumer contracts are essentially frozen in time, and if mandatory arbitration results in fewer published decisions interpreting and applying consumer statutes.

Read a new lawsuit alleging unfair competition by Trump and his new D.C. hotel and restaurants

The complaint is here. The plaintiff is a D.C. wine bar (Cork) that competes with Trump's new businesses. Here is an excerpt that gives you the gist:

Plaintiff's claims are based on the unfair advantage that the Trump International Hotel and its dining establishments, in a building owned by the United States and operated by the Defendants, has gained from Defendant Donald J. Trump being the President of the United States. That advantage is specifically prohibited by the hotel lease between Trump Old Post Office, LLC, and the United States, as well as the laws of the District of Columbia. The effects of that unfair advantage are magnified greatly by marketing activities of the Hotel's officers and employees and the similar activities of defendant Trump, his family, and the White House staff and/or advisors. * * * on November 9, 2016, the day after Defendant Donald J. Trump was elected President of the United States, the competition between the Hotel and Cork began to favor the Hotel much more than before the election, with the result that many organizations and individuals, including citizens of nations other than the United States, substantially increased their use of the Hotel and its various facilities to the detriment of Cork. ... The reason for the increase in business for Defendants was the perception by many of the customers and prospective customers of the Hotel, substantially aided by the marketing efforts of officers and employees of the Hotel, as well as members of the family of Defendant Donald J. Trump and others associated with him, that it would be to their advantage in their dealings with President Donald J. Trump and other agencies of the United States Government if they patronized the Hotel.

The president's working-class voters will be hit hard in the pocketbook by the ACA repeal, while the rich would gain

That's the gist of this article by John Harwood. Here's an excerpt:

Exit polls showed that just 10 percent of Trump's votes came from Americans earning $200,000 or more. Yet those voters would derive all benefits from the repeal of the two individual tax hikes targeting them: a 0.9 percent tax on their earnings, and a 3.8 percent tax on their investment income. An even smaller group, the top 1 percent of earners, would receive an average tax cut of $33,000, according to the Tax Policy Center. The top 0.1 percent of earners would receive an average tax cut of $197,000. *** Whites aged 45 or older provided 56 percent of Trump's votes. Older Obamacare enrollees would be hit particularly hard by the House bill because it curbs age-based insurance subsidies. Enrollees aged 55 to 64, the Cutler study found, would face higher costs averaging $6,971 in 2020.

Bloomberg's Gregory Roberts: CFPB’s Assault on Arbitration Stuck Between Rock, Hard Place

Here.  Excerpt:

Any move by the CFPB to adopt a final version of its rule would almost certainly prompt Republican lawmakers to overturn it, with a long-term chilling effect on future regulation of the clauses used by banks and other financial services providers.

But if the CFPB does not put out a final rule before the term of the bureau’s director, Democratic appointee Richard Cordray, expires in mid-2018, then whomever Republican President Donald Trump picks to lead the bureau isn’t likely to go ahead with the rule, anyway.

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Stuck in what is likely to be a permanent state of limbo, consumer advocates can do little more than plead with companies to eliminate the clauses themselves, as a coalition of groups did in a Feb. 24 letter to Wells Fargo.

Bloomberg: House to Vote on Bills Limiting Class Actions This Week

Here.  Previous posts on the bills appear here and here. Excerpt:

The fast-track approach is deemed essential to give the bills time to advance in the more-deliberative Senate, where 60 votes are needed to overcome an almost certain filibuster.

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With House passage almost certain, opponents and supporters are already turning an eye toward the more difficult path ahead in the Senate.

[Public Justice's Paul] Bland, an opponent, said the final tallies will be significant because of the implications for what happens in the upper chamber.

“If the Republicans lose any substantial number of members in the House, there’s a significant chance” that Senate Majority Leader Mitch McConnell (R-Ky) will “not want to waste much floor time on the bills,” he said.

Another analysis concludes that under the republican health care legislation lots of people would lose coverage

A new analysis finds that, under the proposed republican replacement for the ACA, 6 to 10 million would lose health insurance in the private market and, between 2020 and 2024, the Medicaid program would lose 4 to 6 million recipients. But health insurance industry profits would likely climb. Read about it here.