National Law Journal Report on Law Prof Letter Supporting CFPB Arbitration Rule

Here (behind a paywall, unfortunately).

Deadline for Antitrust and Consumer Protection State Legislation Monitoring Initiative Moved to June 10

A few weeks ago, we posted an item headed Announcement for Students and Others:Antitrust and Consumer Protection State Legislation Monitoring Initiative.  The deadline for submissions has been moved to June 10.  For convenience, I've reposted the  announcement below the fold.

House Continues War on Consumer Protection

by Jeff Sovern

The House Committee on Appropriations Subcommittee on Financial Services has released the draft of a bill it is considering that would hamstring the CFPB and at least temporarily preserve pre-dispute arbitration clauses, among other things. Here is how the Subcommittee describes the CFPB portion of the bill:

The bill includes a provision to increase oversight over the CFPB by bringing funding for the agency under the annual congressional appropriations process, instead of direct funding from the Federal Reserve. This change will allow for increased accountability and transparency of the agency’s activities and use of tax dollars. The legislation also changes the leadership structure of the CFPB from a single Director to a five-member Commission, and requires the CFPB to study the use of pre-dispute arbitration prior to issuing regulations.

Peter Holland's Powerful Piece: Current Trends in Consumer Junk Debt Buyer Litigation

Here.  In the Maryland Bar Journal.  And here is the abstract:

This article examines current trends in debt buyer litigation, including a review of recent regulatory actions and the impact of debt buyer lawsuits on individual consumers and on small claims courts. The article calls for a ban on the sale of consumer junk debt by banks, and for a requirement to make public the terms, conditions and disclaimers from sales contracts between banks and junk debt buyers.

11th Circuit affirms that debt collector can be liable under FDCPA for filing bankruptcy claim on time-barred debt

The U.S. Court of Appeals for the Eleventh Circuit yesterday affirmed its 2014 holding that a debt collector violates the Fair Debt Collection Practices Act when it files a proof of claim in a bankruptcy case on a debt that it knows to be time-barred. In this case, the debt collector argued that the earlier decision put the FDCPA and the Bankruptcy Code in irreconcilable conflict. Yesterday's decision in the cases Johnson v. Midland Funding Inc. and Brock v. Resurgent Capital Services disagreed. The court explained:

Although the Code certainly allows all creditors to file proofs of claim in bankruptcy cases, the Code does not at the same time protect those creditors from all liability. A particular subset of creditors—debt collectors—may be liable under the FDCPA for bankruptcy filings they know to be time-barred.

The Eleventh Circuit's opinion is here.

210 Law Profs File First Comment on CFPB Arbitration Proposal

Here.

ALTA Survey Finds Increase in Consumer Review of Mortgage Disclosures Under New TRID (TILA/RESPA) Disclosures

by Jeff Sovern

A press release is here. ALTA is the American Land Title Association. I haven't read the study (I couldn't find the actual report of the study on the web site), but it reports an increase in consumers who read the mortgage disclosures from 74% to 92% since the TRID disclosures went into effect. The study also found that the new disclosures produced only minimal closing delays. It would be interesting to know more about how much and what consumers take away from the disclosures; I doubt, for example, based on past studies, that 92% of the respondents spent enough time on the disclosures to understand fully their obligations. Still, the direction of the increase in the percentage of consumers reading them is definitely encouraging and the amount of that increase is a victory for the CFPB's mortgage disclosures.

Two for-profit colleges drop forced arbitration clauses

The Washington Post reports today that DeVry University and the University of Phoenix will stop using pre-dispute mandatory arbitration clauses that bar students from filing class-action lawsuits or otherwise taking their grievances to the courts. The story is here.

In a related story, the Post recently explained that "It's almost impossible for students to sue a for-profit college."

Holes in the federal overtime rules and the decline of unions

We discussed here the Department of Labor's new rule that will significantly expand the number of U.S. workers eligible for overtime pay. But, still, a much smaller percentage of U.S. workers are eligible for overtime today than were eligible in the past, and federal law categorically exempts many jobs from entitlement to overtime pay. (Some state laws are more protective.). This article by Danny Vinik explains this phenomenon and that unions no longer protect most of these workers either. Here's an excerpt:

A huge list of American jobs are specifically exempt from overtime. They include airline employees, truckers, and railroad workers, as well as farm laborers, home-based wreathmakers (really) and rural elevator operators. The administration’s overtime regulation estimates that up to 4.5 million workers fall into these categories, including up to 2 million Americans in transportation and 900,000 in agriculture work. Some of these are exempt for obscure reasons dating back to the 1930s, but there's one big shift that has left some workers out in the cold. Decades ago, legal protections for many of them seemed less important—even undesirable—because they had the backing of powerful labor unions to negotiate wages and safe working conditions on their behalf. But the decline of unions have left such workers unprotected in the modern labor force, covered neither by the law nor by a strong union contract.

Chris Peterson Article on CFPB Enforcement

Christopher Lewis Peterson of Utah has written Consumer Financial Protection Bureau Law Enforcement: An Empirical Review, forthcoming in the Tulane Law Review. Here's the abstract:

In the aftermath of the U.S. financial crisis, Congress created a new federal agency — the Consumer Financial Protection Bureau (CFPB) — with the goal of fashioning a more just and efficient American consumer finance market. The CFPB now serves as the U.S. Government’s primary regulator and civil law enforcement agency governing consumer lending, payment systems, debt collection, and other consumer financial services. In its first four years of enforcing federal consumer protection laws, the CFPB has announced over a hundred different law enforcement cases forcing banks and other financial companies to relinquish over $11 billion in customer refunds, forgiven debts, and financial penalties. Drawing upon pleadings, consent orders, settlement agreements, press releases, and other public documents, this Article presents an empirical analysis of the CFPB’s law enforcement track record. In particular, this paper:

(1) provides an introduction to the jurisdiction and powers of the CFPB’s Supervision, Enforcement and Fair Lending Division;

(2) classifies all of the CFPB’s publicly announced enforcement matters through 2015; and,

(3) presents seven notable findings on the CFPB’s public law enforcement program. An appendix listing the CFPB’s publicly announced enforcement cases through 2015 follows.