Will the FDA ban trans fats?

This article by Sabrina Tavernese explains:

The Food and Drug Administration on Thursday proposed measures that would all but eliminate artificial trans fats, the artery clogging substance that is a major contributor to heart disease in the United States, from the food supply. Under the proposal, which is open for public comment for 60 days, the agency would declare that partially hydrogenated oils, the source of trans fats, were no longer “generally recognized as safe,” a legal category that permits the use of salt and caffeine, for example.That means companies would have to prove scientifically that partially hydrogenated oils are safe to eat, a very high hurdle given that scientific literature overwhelmingly shows the contrary. The Institute of Medicine has concluded that there is no safe level for consumption of artificial trans fats.

Read FDA's press release and the proposal to be published tomorrow in the Federal Register.

Hat tip to Hannah Wolfman-Arent.

Another Study of the Credit CARD Act: Did It Restrict Credit Access?

Vikram Jambulapati of MIT's Sloan School of Management and Joanna Stavins of the Boston Fed have written The Credit CARD Act of 2009: What Did Banks Do?  Here's the abstract:

The Credit CARD Act of 2009 was intended to prevent practices in the credit card industry that lawmakers viewed as deceptive and abusive. Among other changes, the Act restricted issuers’ account closure policies, eliminated certain fees, and made it more difficult for issuers to change terms on credit card plans. Critics of the Act argued that because of the long lag between approval and implementation of the law, issuing banks would be able to take preemptive actions that might disadvantage cardholders before the law could take effect. Using credit bureau data as well as individual data from a survey of U.S. consumers, we test whether banks closed consumers’ credit card accounts or otherwise restricted access to credit just before the enactment of the CARD Act. Because the period prior to the enactment of the CARD Act coincided with the financial crisis and recession, causality in this case is particularly difficult to establish. We find evidence that a higher fraction of credit card accounts were closed following the Federal Reserve Board’s adoption of its credit card rules. However, we do not find evidence that banks closed credit card accounts or deteriorated terms of credit card plans at a higher rate between the time when the CARD Act was signed and when its provisions became law.

Town Council to Meet on Settlement in Mount Holly Tonight

by Deepak Gupta

We've blogged before about Mount Holly--the Supreme Court case about the future of disparate impact in housing and lending discrimination. (My firm represents current and former Members of Congress in the case). All along, it's seemed possible that Mount Holly would settle before the December oral arguments. 

This morning, that's looking even more likely: Bloomberg reports that the Mount Holly town council will meet tonight to consider, and possibly vote, on a proposed settlement that will end the case and deprive the Supreme Court -- for the second time in two years -- of the opportunity to decide the fate of disparate impact. (Relatedly, Adam Serwer of MSNBC has an-depth piece today that summarizes the relevant history and includes interviews of photographs of Mount Holly Gardens residents and their homes.)

A settlement will shift attention to a previously little-known case before the U.S. District Court for the District of Columbia. Two insurance trade groups are challenging HUD's new disparate-impact rule. They claim not only that the rule is contrary to the FHA but that it is reverse-preempted under the McCarran-Ferguson Act because (as applied to insurance companies) it impermissibly regulates the "business of insurance," a province of state regulation. If the court adopts the far narrower McCarran-Ferguson reverse-preemption theory, the case could cease to be a vehicle for a broader challenge to disparate impact. 

CFPB gets going on debt collection

by Brian Wolfman

The Consumer Financial Protection Bureau took two steps yesterday in the debt-collection realm.

First, it began adding complaints about debt collection to its public consumer-complaint database.

Second, it began the process of rulemaking for the debt-collection industry. The agency issued an advance notice of proposed rulemaking seeking data on many issues, including the accuracy of information used by debt collectors, how consumers can best learn of their rights, and the current means -- legal and illegal -- used by debt collectors to collect debts. In the agency's press release CFPB director Richard Cordray explained the reasons behind the agency's inquiry:

For decades, many consumers have reported various unacceptable practices in the debt collection industry. Today’s action will allow us to hear from the public as we consider what rules are needed. We want to ensure that all players in the industry are working with correct information, that consumers are fully informed, and that consumers are treated fairly and with dignity.

The rules that emerge from this process could significantly change debt-collection practices. Although the federal law governing debt collection -- the Fair Debt Collection Practices Act -- has been around since 1977, until enactment of the Dodd-Frank financial reform law in 2010, no agency was authorized to issue legislative rules governing the conduct of the debt-collection industry (and practices were governed generally by the text of the FDCPA and court decisions interpreting it). Now, the CFPB has that authority.

The intersection of Obamacare and open government

This story from NPR's Morning Edition this morning discusses various states' efforts to handle consumer questions regarding the implementation of Obamacare. Several states are outsourcing the operation of call centers to companies like Maximus, but most of the states won't make public how much they are paying for the service; for instance, Connecticut's contract with Maximus is public, but information about pricing is blacked out, so taxpayers don't know how much the state is paying or how much it's being charged per call the company handles. Vermont, by contrast, makes pricing information public.

Industry group wants to ban class action privacy lawsuits

Check out this story at MediaPost describing lobbying efforts by the Digital Marketing Association "to overhaul privacy laws in order to protect companies' ability to use data for marketing purposes."

More "Reform" from John Beisner and the Chamber

In connection with its "Legal Reform Summit" last week, the U.S. Chamber of Commerce's Institute for Legal Reform issued a new paper written by John Beisner and his colleagues at Skadden Arps with new proposals for legislation to limit class actions and expand federal jurisdiction over both class actions and individual actions. Entitled A Roadmap for Reform: Lessons from Eight Years of the Class Action Fairness Act, the paper provides a corporate wish-list for legislation to expand the Class Action Fairness Act (CAFA), as well as legal analysis intended to support these proposals for further "reform." In light of John's success in helping to shape both the debate over CAFA and the terms of the law, his thoughts about next steps in pursuing the corporate agenda of limiting litigation are well worth examining.

One striking thing about the paper is that it seemingly treats any issue a defendant has lost under CAFA as a potential subject for legislation to close "loopholes" in CAFA, even if the issue has only been the subject of one or two judicial decisions. But the paper also advances some ideas that are far-reaching and well beyond CAFA's current scope, such as the complete elimination of cy pres awards, the prohibition of "issue classes," and the expansion of federal diversity jurisdiction to include even non-class actions if they are related to a Multi-District Litigation (MDL) proceeding pending in the federal courts.

The ACT and the College Board sued over alleged unlawful sale of test-takers' private information

As Emily Babay of philly.com explains

The companies that administer the SAT and ACT college entrance exams are being sued over their sales of students' personal information to outside parties. A lawsuit filed this week contends that the College Board, which  runs the SAT, and ACT, Inc., sell identifying information about the hundreds of thousands of teenagers who take the exams each year without the students' consent.The test companies are "masking the sale" of personal details about the students "under the guise of 'sharing'" the teens' information with other agencies, the suit says. It says the companies don't disclose to students that their personal information will be sold for profit.

Read the federal-court class-action complaint.

A lawsuit filed this week contends that the College Board, which runs the SAT, and ACT, Inc., sell identifying information about the hundreds of thousands of teenagers who take the exams each year without the students' consent.

The test companies are "masking the sale" of personal details about the students "under the guise of 'sharing'" the teens' information with other agencies, the suit says. It says the companies don't disclose to students that their personal information will be sold for profit.

Read more at http://www.philly.com/philly/news/College_Board_ACT_sued_over_sale_of_student_information.html#3l2WYv7Q42DK5Jja.99

The companies that administer the SAT and ACT college entrance exams are being sued over their sales of students' personal information to outside parties.

A lawsuit filed this week contends that the College Board, which runs the SAT, and ACT, Inc., sell identifying information about the hundreds of thousands of teenagers who take the exams each year without the students' consent.

The test companies are "masking the sale" of personal details about the students "under the guise of 'sharing'" the teens' information with other agencies, the suit says. It says the companies don't disclose to students that their personal information will be sold for profit.

Read more at http://www.philly.com/philly/news/College_Board_ACT_sued_over_sale_of_student_information.html#3l2WYv7Q42DK5Jja.99

The companies that administer the SAT and ACT college entrance exams are being sued over their sales of students' personal information to outside parties.

A lawsuit filed this week contends that the College Board, which runs the SAT, and ACT, Inc., sell identifying information about the hundreds of thousands of teenagers who take the exams each year without the students' consent.

The test companies are "masking the sale" of personal details about the students "under the guise of 'sharing'" the teens' information with other agencies, the suit says. It says the companies don't disclose to students that their personal information will be sold for profit.

Read more at http://www.philly.com/philly/news/College_Board_ACT_sued_over_sale_of_student_information.html#3l2WYv7Q42DK5Jja.99

Report: cash-for-clunkers (CARS) program not terribly efficient

by Brian Wolfman

Remember the Obama Administration's early "stimulus" program known as cash-for-clunkers? The Consumer Assistance to Recycle and Save Act of 2009, or CARS, was meant to encourage people to trade in their gas guzzlers and buy new fuel-efficient cars. You traded in the gas guzzler, and the federal government funded a $3,500 to $4,500 credit toward the new car. And the car dealer was required to scrap the gas guzzler--even if it ran perfectly well--so that it wouldn't continue its gas-guzzling ways. The idea was that the consumer saved money, new car purchases increased, and the environment was benefited. Back when the program got started, we posted frequently (and fairly skeptically) about the program's value. (Go, for instance, here, here, here, here, and here.)

Now, a study by Ted Gayer and Emily Parker at the Brookings Institution has found that

The Car Allowance Rebate System (CARS) or “cash for clunkers” program, launched during the height of the recession with the intention of stimulating the economy, creating jobs, and reducing emissions, was actually far more expensive per job created than alternative fiscal stimulus programs.

For more information, read Almost anything would have been better stimulus than ‘Cash for Clunkers', a review of the Brookings' study by Brad Plumer. The study's specific findings are set out after the jump.

Paper on Critical Race Theory and Crtical Race Feminism and the Unbanked

Emily Houh and Kristin Kalsem, both of Cincinnati, have written It's Critical: Legal Participatory Action Research, forthcoming in 18 Michigan Journal of Race & Law. Here's the abstract:

The ongoing community-based research project that we describe in this article will contribute, we hope, to an understanding of the fringe economy by offering insights into what remains "unexplained" in the current existing literature, namely the gender and race disparities relating to who uses "alternative financial service" (AFS) products. This article likewise contributes to a growing body of literature within Critical Race Theory and Critical Race Feminism that deals with economic inequalities and how they are inextricably and structurally linked to race and gender subordination. By explicitly incorporating "participatory action research" (PAR) values and methods into our work as critical race/feminist scholars and researchers, we offer in this article a "new" way of doing critical race/feminist work that is designed specifically to enable likeminded legal scholars to "get out of [the ivory tower]...and hear from people firsthand." Our PAR intervention puts the voices and concerns of community stakeholders and research partners at the center of the work itself. Thus, our approach, which we call legal PAR, makes its most significant and original contribution to the existing legal scholarship by not only "looking to the bottom" in a theoretical sense, but also by treating those "at the bottom" as equal research partners who are presumptively best situated to identify, analyze, and solve problems that directly affect them.

The article presents an overview of some recent empirical studies on those most likely to use "alternative financial services," also known as the "unbanked" and "underbanked." It also discusses and critiques the relevant legal literature on fringe banking and the unbanked and underbanked, and highlights some organizational efforts that aim not only to protect the unbanked and underbanked from predatory lending practices, but also seek to encourage and facilitate more responsible lending practices and innovations.  The article introduces PAR, including its origins and critical developments, specifically highlighting the ways in which feminism, intersectionality, and CRT have and are continuing to impact the field. Finally, the article makes the case that PAR has much to offer legal scholars and scholarship while also setting forth some challenges — and resulting benefits — of doing legal PAR.