Paul Bland on Spotfiy's Arbitration Clause: Spotify Hits a Sour Note with Secretive Fine Print

Here, in the Daily Kos.  An excerpt:

If Spotify does something illegal, no one can ever know that a consumer is challenging it. And then, if an arbitrator did find that Spotify acted illegally (which is asking a lot, since Spotify will pick the private arbitration company that will, in turn, select the arbitrator to hear the case), whatever the result is must be kept secret.

Spotify’s timing couldn’t be worse. Large corporations are trying to keep big secrets from their consumers and the public. Volkswagen, for example, has been exposed for having rigged their cars to pass emissions tests, and then, shortly afterward, begin polluting at up to 40 times (!?) the amount allowable by law. And there’s a case right now in Pennsylvania federal courts, involving a software company that installed malware permitting the guys at the company to turn on a customer’s computer, activate their camera, and watch people in the presumed privacy of their own homes.  

(HT: Gregory Gauthier)

Consumer Reports on Arbitration Clauses

Here. Excerpt:

We believe that consumers should not be forced into arbitration. The Consumer Financial Protection Bureau should use its authority to stop forced arbitration in financial services; it recently announced it's holding a hearing on October 7 in Denver to discuss the topic, and may make an announcement then. Congress should enact legislation to make arbitration voluntary in other consumer contracts.

Ralph Nader opens American Museum of Tort Law

A timely counterweight to the troubling political movement to roll back regulations that protect public safety, the American Museum of Tort Law opened in Winsted, Connecticut this past weekend. As the NYT describes,

The museum aims to describe the evolution of the law regarding negligence and liability, and it features some of the most groundbreaking cases of the late 20th century. These include decisions involving the Dalkon Shield (a dangerous intrauterine device) and the Ford Pinto (whose gas tank was prone to explosive burning in accidents), as well as the historic lawsuits that laid low tobacco companies and the asbestos industry.

The founder is consumer advocacy pioneer Ralph Nader, who (according to the article)

also dreams of having drama students re-enact famous tort trials in a mock courtroom here and streaming the cases online to high schools, colleges and law schools. The staff hopes to arrange frequent school tours and to keep a visible online presence.

One exhibit is dedicated to Nader's most famous crusade -- the cause of auto safety -- and his book Unsafe at Any Speed.

The whole Times story is here.

Check out the museum's website, here.

EU ruling could have major implications for technology and privacy

The BBC reported Wednesday that "An opinion issued by the European Court of Justice says that current data-sharing rules between the 28-nation bloc and the US are 'invalid.' The decision could affect other tech firms' abilities to send Europeans' information to US data centres."

Although the ruling is not final, the BBC explains that the ruling could disrupt participation by U.S. tech giants like Facebook, Google, Microsoft, and Apple in U.S. government data surveillance programs.

Read more here.

CFPB and DOJ announce $27m discriminatory lending settlement against Hudson City Savings Bank

From a CFPB press release today:

Today, the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) announced a joint action against Hudson City Savings Bank for discriminatory redlining practices that denied residents in majority-Black-and-Hispanic neighborhoods fair access to mortgage loans. The complaint filed by the CFPB and DOJ alleges that Hudson City illegally provided unequal access to credit to neighborhoods in New York, New Jersey, Connecticut, and Pennsylvania. The bank located branches and loan officers, selected mortgage brokers, and marketed products to avoid and thereby discourage prospective borrowers in predominantly Black and Hispanic communities. If the proposed consent order is approved by the court, Hudson City will pay $25 million in direct loan subsidies to qualified borrowers in the affected communities, $2.25 million in community programs and outreach, and a $5.5 million penalty. This represents the largest redlining settlement in history to provide such direct subsidies.

Read more here.

MarketWatch: Dodd-Frank is not killing mortgage access for home buyers

The story, based on a Fed study, is here. Excerpt:

New rules designed to make sure borrowers can repay their mortgages haven’t curtailed the ability to buy a home, a Federal Reserve study says.

* * *

The Fed study didn’t find any evidence of credit restriction as a result of the rules.

For instance, black and Hispanic borrowers, who tend to have fewer assets and lower credit scores, actually saw their share of mortgages rise in 2014 after several years of decline. There also wasn’t much of a change in the frequency in which debt-to-income was cited by lenders as a reason for denial (it rose slightly for purchase applications and fell slightly for refinancing).

The Fed suggests the new rules had little effect because lenders had already tightened standards after the 2008 financial crisis. Lenders may also have adjusted to the new rules prior to implementation.

CFPB report spotlights mortgage complaints

The Consumer Financial Protection Board on Tuesday released its latest monthly consumer complaints snapshot, which highlights mortgage complaints. According to the report, consumers continue to face problems with mortgage servicing, particularly during certain circumstances, such as when they apply for a loan modification to avoid foreclosure.

The CFPB report finds the consumers continue to experience difficulty preventing foreclosure and complain about a lack of information when loans are transferred. Nearly a third of mortgage complaints came from consumers saying that they have trouble making the proper payments on their mortgage loans.

The report also notes that Wells Fargo, Bank of America, and Ocwen were the three companies about which the CFPB received the most mortgage-related complaints.

The report is here.

"Volkswagen Test Rigging Follows a Long Auto Industry Pattern"

A discouraging article from the New York Times:

Long before Volkswagen admitted to cheating on emissions tests for millions of cars worldwide, the automobile industry, Volkswagen included, had a well-known record of sidestepping regulation and even duping regulators.

For decades, car companies found ways to rig mileage and emissions testing data. In Europe, some automakers have taped up test cars’ doors and grilles to bolster their aerodynamics. Others have used “superlubricants” to reduce friction in the car’s engine to a degree that would be impossible in real-world driving conditions.

Automakers have even been known to make test vehicles lighter by removing the back seats.

Cheating in the United States started as soon as governments began regulating automotive emissions in the early 1970s.

The full story is here.

CFPB Announces Arbitration Field Hearing

October 7, in Denver.  More here.  Will the Bureau announce proposed arbitration rules? (HT: Gregory Gauthier)

"Safety Suffers as Stock Options Propel Executive Pay Packages"

The New York Times reports on a study that found a correlation between generous company stock options for executives and the incidence of serious product recalls of the companies products.

The study, “Throwing Caution to the Wind: The Effect of C.E.O. Stock Option Pay on the Incidence of Product Safety Problems,” concluded that “C.E.O. option pay was associated with both a higher likelihood of experiencing a recall as well as a higher number of recalls.”

....

The researchers scrutinized companies in two industries that are closely regulated by the Food and Drug Administration. All of the companies had sales and assets of at least $10 million. The academics looked at the size of stock options in proportion to a chief executive’s total pay and calculated a two-year average, finding that recalls tended to be more prevalent at companies with higher option percentages. The names of specific companies were not cited in the study.

One group of companies produced consumer staples like foods, beverages and personal care products, while the other manufactured health care products, including medical devices and pharmaceuticals. ...

Their analysis examined two significant types of product recalls: those in which a product could cause serious harm or death and those in which exposure to a product might cause temporary or medically reversible health consequences.

The full NYT story is here.