CFPB reports on misleading ads for reverse mortgages

The Consumer Financial Protection Bureau is reporting on its just-completed study of advertisements for reverse mortgages:

Ads for reverse mortgages are found on television, radio, in print, and on the internet, and many ads feature celebrity spokespeople discussing the benefits of reverse mortgages without mentioning risks. We looked closely at many ads and found incomplete and inaccurate statements used to describe the loans. In addition, most of the important loan requirements were often buried in fine print if they were even mentioned at all. These advertisements may leave older homeowners with the false impression that reverse mortgage loans are a risk-free solution to financial gaps in retirement.

The CFPB consumer advisory is here.

Senators urge CFPB to issue "strongest possible rules" for payday lending

"As the Consumer Financial Protection Bureau (CFPB) considers new rules to rein in predatory practices in payday and similar types of lending, Senator Merkley and 31 of his Senate colleagues expressed their support today for the initial steps the agency has taken and urged the agency to issue the strongest possible rules to combat the 'cascade of devastating financial consequences' that these high-priced loans often have on consumers."

Read the Senators' full press release here. The Senators' letter is reprinted at the end of the release.

Wikileaks documents show regulations at risk in proposed TISA "trade" pact with EU

Proving yet again that proposed "free trade" deals are about a lot more than trade, Wikileaks has released a set of documents showing how the proposed "Trade in Services Agreement," or TISA, "would take a major step towards deregulating financial industries, and could affect everything from local maritime and air traffic rules to domestic regulations on almost anything if an internationally traded service is involved."

The Huffington Post has the story.

Federal financial agencies report that lending is becoming riskier

A joint report by the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency concludes that "[d]espite vigorous new regulatory controls adopted in the wake of the recent financial crisis, financial lending has only become riskier." The report cites banks' leveraged lending, which involves making a loan and then selling the debt to a third party, often an investment fund.

In general, banks are seeking higher returns and in return are accepting a higher level of risk. The report also notes that banks have yet to come into full compliance with regulatory guidance issued last year regarding, among other things, risk management.

Risky practices... regulatory non-compliance... sound familiar?

You can read the story in Reg Blog here.

HHS report: 6.4 million could lose health insurance if Supreme Court rules against Obamacare

The Huffington Post has the story.

Inglewood Mayor James T. Butts and JoAnna Esty Misusing Copyright Law to Bully a City Critic

The Los Angeles Times carries an op-ed  about a copyright infringement lawsuit filed by the City of Inglewood, California, against a local resident who has taken portions of the city’s own recordings of public meetings to highlight conduct by the city’s elected mayor that he deemed inappropriate.  The defendant has a web site that lambastes mayor James T. Butts, and from which he links to a series of You Tube videos that take small bits of city council meetings on which he superimposes his own comments in captions and adds audio of his own voice overs.   Classic fair use, you would think.  But the city claims copyright in these public records  and seeks injunctive relief taking down the videos as well as damages and attorney.  Happily, the complaint also contains hyperlinks to the videos in question, so viewers can click on the links as provided on archive.org to make their own fair use judgments.

Represented pro bono by Davis Wright Tremaine, Teixera has moved to dismiss under Rule 12(b)(6), arguing both that California law bars local governments from asserting copyright in public records and that the videos, which can be considered because they are linked from the complaint, are fair use.  Inglewood’s lawyer JoAnna Esty (or Joanna -- her web site does not always capitalize the second "a") contends that Teixerra’s use is “commercial” even though there is not even a hint of revenue-raising on his web site, that posting excerpts with captions superimposed is not transformative, and that a deadpan video of a city council meeting is highly creative.  Esty’s claimed expertise in intellectual property law is rather belied by the silly and even dishonest arguments that she makes in her brief.

The proposed new federal anti-SLAPP law should not be needed to enable Teizeira to recover his attorney fees because this lawsuit is so far beyond the pale; Esty herself might be held liable on a sanctions theory, as well as suffering a well-deserved hit to her personal reputation for agreeing to handle this case for the plaintiff.   The pity is that the residents of Inglewood will have to pay for both sets of lawyers, and that there is no obvious way to impose the expense of this abusive litigation on whichever public officials caused it to be filed.

Ht to Adam Steinbaugh and Sherwin Siy for their pointers to this case.

Historic changes in privacy law

After years of laws permitting more and more government surveillance of cell phone and email users' private communications, this week Congress finally passed a law setting limits, the USA Freedom Act. President Obama signed it yesterday.

Among other provisions, the law requires the government to seek judicial approval to search the data, which will no longer be held by the government. The Foreign Intelligence Surveillance Court, which must approve governmental requests for surveillance, will operate in a more transparent manner and will in some cases receive adversary presentation (as opposed to its previous practice of hearing only the government's reason for seeking information and no argument in favor of protecting privacy).

The New York Times has the story.

Jean Sternlight: Asking Tough Questions About Mandatory Arbitration and Article III

Sternlight has been writing about arbitration for years, and has some interesting comments about the Supreme Court's opinion last week in Sharif at the Indisputably blog.  An excerpt:

The Supreme Court’s most recent Article III decision, Wellness Int’l v. Sharif (2015), raises substantial questions as to the constitutional legitimacy of the Federal Arbitration Act, 9 U.S.C. § 1 et seq., at least as applied to private mandatory arbitration. * * *

A five justice majority (Sotomayor, Kennedy, Ginsburg, Breyer & Kagan), also joined by Justice Alito, in substantial part, held that litigants may “knowingly and voluntarily” allow a bankruptcy judge to hear claims that, absent such consent, Article III would bar the bankruptcy judge from deciding.* * *

* * * [W]hen courts have sought to justify arbitration on the ground that parties “consented” to bring claims in arbitration rather than in court, they have not applied the “knowing and voluntary” definition of consent recently applied in Sharif. If courts did look for knowing and voluntary consent they would find that while many business-to-business arbitration agreements meet the test, few if any consumer and employment clauses do so.

Those interested in the matter should read the entire post  (HT: Elayne Greenberg).

Financial retribution against protestors heightens cost of civil disobedience

NPR reports today on a Michigan State student who protested a tar sands pipeline by using a bike lock to secure himself to a truck involved in the construction. At the end of the 90-minute protest, the student (ironically named Tarr) was arrested for trespassing, which he expected. But the company responsible for the project, Precision Pipeline, managed to make him pay more: according to the story, the company "use[d] Michigan's crime victim restitution laws to assess charges to make up for the value of equipment and workers idled during their protest" -- a whopping $39,000, which amounts to more than Tarr's student debt and which is not dischargeable in bankruptcy.

This is part of a troubling trend of economic retaliation against protestors; the NPR piece also cites a Black Lives Matter protest threatened with lost-business charges for demonstrating at the Mall of America in Minnesota. It's unclear from the story who is behind this use of restitution laws: the prosecutors or the targets of the protest? If the latter, it seems anomalous that the victim of a crime can help determine the punishment. In criminal law enforcement generally, a governmental decisionmaker (a prosecutor) not affiliated with either the accused or the victim makes the decision what penalties to seek.

Either way, these uses of restitution laws seem designed to deter speech activity, albeit speech activity accompanied by civil disobedience. Although there is no First Amendment right to trespass, fining a protestor tens of thousands of dollars for a brief, peaceful demonstration seems disproportionate. Additionally, the Supreme Court has held that even criminal laws regulating unprotected speech cannot target speech based on viewpoint. (A First Amendment challenge to a particular application of a neutral criminal law would be difficult, however, because it would require the protestor in that particular case to show that a desire to punish the speech motivated the decision to seek additional penalties in that case.)

You can listen to the NPR story here.

A desert right in the middle of Baltimore

As an eye-opening op-ed in the Baltimore Sun pointed out last week, there are places in the U.S., even densely populated places, where access to essential medications is quite difficult. Acutely, pharmacies remained closed in Baltimore in the aftermath of the Freddie Gray riots. But there is a larger, more systemic problem, as the op-ed explains:

Chronically ill black and Hispanic residents are nearly half as likely to take lifesaving medications than whites with similar illnesses, largely because they don't have access to them. . . .

[M]inority residents are more likely to live in "pharmacy deserts." There are substantially fewer pharmacies in predominantly black and Hispanic neighborhoods than in white neighborhoods.

This gap in pharmacy access, which we found had widened over the last 10 years, may worsen amid the expected rise in pharmacy closures planned by retailers such as Walgreens. Unfortunately, but not unpredictably, the vast majority of these closures are likely to occur in minority neighborhoods, since they are less profitable likely due to greater rates of care for the publicly insured. Retail pharmacies are, after all, part of the private sector, often leveraging a public good for financial gain.

The author, a professor at the University of Illinois, notes that life expectancy within Baltimore can vary by twenty years depending on where a person lives. Read the whole piece, including a proposal to address the problem, here.