CFPB to oversee nonbank auto finance companies

The Consumer Financial Protection Bureau has published a rule allowing the agency to supervise larger nonbank auto finance companies. The CFPB press release is here. The rule is here.

The CFPB also released the examination procedures that examiners will use to ensure that auto finance companies are following the law. The examination procedures are here.

Generic drugs, product safety, liability, and preemption

For a new article on these topics, take a look at Federal Preemption of Generic Drug Claims: Product Safety, Potential Regulatory Changes and Plaintiff Strategies in the Aftermath of Mensing and Bartlett by Eric Lindenfeld and Jasper Tran. Here is the abstract:

Recent research indicates that the current cost of generic medications in the United States is the highest in history. Many patients are no longer able to afford life saving medications that were once affordable only five years ago. Concurrent to the rising prices of generic drugs, pharmaceutical companies have lauded preemption as a necessary and viable solution to combat the increasing prices. Two recent Supreme Court decisions have agreed with this logic, and have attempted to pervert the Hatch-Waxman Act, and its corresponding ANDA approval process to shield generic drug manufacturers from liability. Not only has this immunity done nothing to combat the price of drugs, but it has also decreased incentives for generic manufacturers from engaging in thorough pre-market testing and studies, putting consumers of generic drugs at an increased risk of injury.

This paper proceeds in six parts. Part I provides background of federal preemption as well as the FDA’s "NDA" and "ANDA" approval processes for generic drugs. Part II explores the federal preemption analysis of generic drug claims made in three recent Supreme Court decisions. Part III explores in-depth the damaging effects that these decisions have on the safety of consumers, and the long-term vitality of the generic drug industry. Having established that preemption of generic drug claims is undesirable, Part IV identifies recent attempts by the FDA to introduce regulatory changes that eliminate preemption of generic drugs. Part V explores cutting edge strategies that have been used by plaintiff lawyers to circumvent, reframes and distinguishes the Supreme Court decisions. Part VI concludes.

 

Federal Court in Utah Holds California Anti-SLAPP Statute Applicable to Diversity Defamation Action

by Paul Alan Levy

Judge Tena Campbell of the United States District Court has issued an interesting decision holding that a California woman sued in diversity by a Utah company may file a special motion to strike the plaintiff’s defamation claim.   The case involves a suit by the “Diamond Ranch Academy” against Chelsea Filer, a California woman whose own experiences at a residential youth treatment center stimulated an interest in abuses at such places generally.  Her web site Diamond Ranch Academy Survivors criticizes the plaintiff company.

Parting company with a recent ruling of the D.C. Circuit in Abbas v. Foreign Policy Group, which was discussed in the briefs but is not mentioned in the opinion, Judge Campbell finds a special motion to strike analogous to a summary judgment motion and hence not in conflict with the Federal Rules of Civil Procedure.  Disposing easily of a consideration that influenced the Abbas panel, Judge Campbell holds that because the California anti-SLAPP creates an exception to the general stay of discovery once an anti-SLAPP motion is filed, allowing the trial court to permit discovery when good cause is shown, the California statute’s treatment of discovery is analogous to Rule 56(d), under which a demonstrated need for discovery can provide a basis for deferring a ruling on a summary judgment motion.

Looking for Help on FDCPA Survey

by Jeff Sovern

I am working on a survey designed to determine consumer awareness of the Fair Debt Collection Practices Act validation notice.  The plan is to show respondents a debt collection letter that includes a standard validation notice, and then ask questions to see how aware they are of the notice and how they understand it.  I would love to run the questions past people who litigate FDCPA cases or are otherwise knowledgeable about the validation provision. If you are willing to take a look at the survey and comment, please email me at sovernj @ stjohns dot edu.

Thanks!

Lotteries and the poor

A recent Washington Post article focuses on something many of you probably know: lotteries are terrible for poor people, because lottery participants are disproportionately poor and (of course) the odds against winning are astronomically high. The Post story also makes another, more subtle point about the problem with lotteries: many people write off the deleterious effects of lotteries on poor people as the product of voluntary choice. But that’s an easier opinion to hold if you’re someone with more choices to begin with. The article explains:

It's not that poor people don't understand that the lottery has a near-zero chance of making them dynastically wealthy. It's that they think everything else has an actually-zero chance. That's why ... people making less than $30,000 are 25 percent more likely to say that they buy lottery tickets for money than for fun, while it's the opposite for everyone else. State lotteries, in other words, don't just prey on poor people's dreams—they do that for everyone—but rather on desperate dreams.

Read the article here.

Finanical regulators issue standards for assessing diversity practices of regulated entities

The agencies' joint press release explains:

Section 342 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) required the Federal Reserve Board, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission to establish an Office of Minority and Women Inclusion (OMWI) at each agency to be responsible for all matters relating to diversity in management, employment, and business activities. The Dodd-Frank Act also instructed each OMWI director to develop standards for assessing the diversity policies and practices of the agencies’ regulated entities.

The final standards, which are generally similar to the proposed standards, provide a framework for regulated entities to create and strengthen their diversity policies and practices—including their organizational commitment to diversity, workforce and employment practices, procurement and business practices, and practices to promote transparency of organizational diversity and inclusion within the entities’ U.S. operations.

Read the agencies' final standards here.

FTC issues annual report on enforcement of three consumer statutes

The Federal Trade Commission yesterday issued its Annual Financial Acts Enforcement Report to the Consumer Financial Protection Bureau. The report discusses the FTC's enforcement-related activities regarding Regulation Z (Truth in Lending Act), Regulation M (Consumer Leasing Act), and Regulation E (Electronic Fund Transfer Act).

The FTC's press release explains:

The report addresses, among other things, the FTC’s enforcement actions related to non-mortgage credit (including automobile purchases and financing, and payday lending), mortgage loan advertising, and forensic audit scams; rulemaking, research, and policy development related to truth in lending; and consumer and business education regarding truth in lending requirements. It also addresses consumer leasing enforcement actions, as well as negative option and other cases involving electronic fund transfers.

Public Citizen report documents injuries to nurses

A new Public Citizen report, “The Healthcare Industry’s Castoffs,” documents the nature and repercussions of injuries suffered by nurses. This report is the first in a five-part series spotlighting injuries to health care workers, potential methods to reduce these injuries, the policy positions of stakeholders and the implementation of solutions.

As Public Citizen reported in 2013, more health care and social assistance workers are forced to miss work due to injury than workers in any other profession.

Bloomberg: Banks’ Billions in Overdraft Fees Seen Dodging Tough U.S. Rules

Here.  (HT: Matt Bruckner). Excerpt:

After studying overdraft fees for more than three years, the Consumer Financial Protection Bureau is leaning against subjecting banks to tough new rules that would cap the size of charges or limit how frequently they can be imposed on consumers, said two people briefed on the agency’s work.

More likely, when the CFPB proposes regulations later this year or in early 2016, it will probably bar lenders from reordering transactions in a way that triggers overdrafts and also require better disclosure of policies that allow consumers to avoid the fees, said the people who asked not to be named because the agency hasn’t finalized its rules.

Department of Transportation issues self-critical report on GM ignition defect

Two internal reports released by the Department of Transportation identify a series of failings by the National Highway Traffic Safety Administration (a part of the Department) that allowed millions of defective GM cars to go unrepaired for more than a decade. The ignition switch could suddenly turn off, stalling the engine and disabling the airbags. The reports focus blame for the defect on GM, but they also include an unusually blunt assessment of mistakes made by regulators.

Among other things, the agency admitted that it failed to pay attention to signs of the defect and failed to use its authority to hold GM accountable,

The New York Times reports on the Department's findings and its response.