Ed Mierzwinski: Banks, Not CFPB, Spy on Consumers

Ed's excellent post is here.  Those who purport to be so concerned about the privacy of bank customers should seek to amend the Gramm-Leach-Bliley privacy provisions to bar banks from selling consumer information unless their customers affirmatively opt-in to the sale of that information. But that would mean supporting consumer protection, precisely what the CFPB opponents do not want. 

Private racketeering class action alleges that Bank of America deliberately denied HAMP mortgage modifications

Read this Charlotte observer story on the suit. Here's an excerpt:

A lawsuit in federal court in Colorado accuses Charlotte-based Bank of America of racketeering, in what amounts to more fallout for the bank stemming from a federal mortgage-modification program. The suit, filed Wednesday, claims violations of the federal Racketeer Influenced and Corrupt Organizations Act, also known as RICO. It cites statements that former Bank of America employees made last month in a separate, ongoing federal lawsuit in Massachusetts. Those former employees, including at least one who worked in Charlotte, claim the bank awarded cash and gift cards to them if they denied mortgage modifications to homeowners through the Home Affordable Modification Program.

Read more here: http://www.charlotteobserver.com/2013/07/11/4159493/bank-of-america-accused-of-racketeering.html#storylink=cpy

Times Report: Novel-Length Contracts Online and What They Say

Here.  The article is about the problem of boilerplate more generally than the headline suggests and is definitely worth a read.  Here's my favorite quote:

“I’m not someone who wags his finger and says you should read [online contracts],” said Douglas G. Baird, a professor of law at the University of Chicago. “If you read them, you don’t have a very interesting or productive life.”

New online privacy bill in Congress

In an era in which privacy is under attack on many fronts, it's welcome news whenever members of Congress introduce bills to protect consumer privacy. One such effort is that of Rep. John Duncan of Tennessee, who this week proposed legislation to protect minors against misappropriation of their likenesses for advertising. (See here for further discussion.) This issue is the subject of several pending lawsuits against Facebook; in one of them, we at Public Citizen are representing objectors to a proposed settlement that offers insufficient protection for minors' privacy.

Amy Schmitz Paper on Cramming

Amy Schmitz of Colorado has written Ensuring Remedies to Cure Cramming, 14 Cardozo J. of Conflict Resolution 877 (2013).  Here's the abstract:

The unauthorized addition of third party charges to telecommunications bills ("cramming") is a growing problem that has caught the attention of federal regulators and state attorney generals.  This Article therefore discusses the problems associated with cramming, and highlights consumers’ uphill battles in seeking remedies with respect to cramming claims.  Indeed, it is  imperative for policymakers, researchers, consumer advocates, and industry groups to collaborate in developing means for resolving these claims.   Accordingly, this Article offers a proposal for resolving cramming disputes in order to advance this collaboration, and inspire development of a functioning online dispute resolution ("ODR") process to handle these claims.  This process is designed to provide consumers a quick and easy-to-understand option for reporting and resolving cramming cases.

Sens. Warren and McCain seek return to Glass-Steagall bank regulation

Senators Warren and McCain have introduced legislation to prevent banks from engaging in certain financial speculation. Its explained in this article by Peter Eavis. Here's a brief excerpt:

Senator Elizabeth Warren on Thursday introduced an aggressive piece of legislation that intends to take the financial industry back to an era when there was a strict divide between traditional banking and speculative activities. The bill, which is also sponsored by Senator John McCain, Republican of Arizona, and two other senators, is named the 21st Century Glass-Steagall Act. Its intention is to create a modern version of the seminal Glass-Steagall legislation from the 1930s, which placed firm limits on what regulated banks could do. It was fully repealed in 1999, laying the groundwork for the mergers that created some of the biggest banks of today. If passed, it could force many of those banks to let go of their trading operations.

Even more on student loan deal in Senate

Following up on Allison's post about a tentative deal in the Senate on student-loan interest rates, this Bloomberg story spells it out. Here are the basics, including a description of what has already been passed in the House:

The House-passed plan, H.R. 1911, would charge students 2.5 percentage points more than the yield of the last 10-year Treasury note auction before June 1 and would cap rates at 8.5 percent. Under the tentative deal reached last night [among Senators], the interest rate for all Stafford undergraduate loans, subsidized and unsubsidized, would be set annually at 1.8 percentage points above the yield of the last 10-year Treasury-note auction before June 1. The rate for undergraduate Stafford loans would be capped at 8.25 percent.... This year, the yield of the last 10-year Treasury auction before June 1 was was 1.81 percent; if the bill’s provisions were effective now, 11 million students taking out undergraduate Stafford loans this year would be charged an interest rate of 3.61 percent.... Under th[e deal] ..., there would be larger markups for graduate student loans, which would be capped at 9.25 percent. Borrowers of PLUS loans -- who include graduate students and parents of undergraduates -- would be charged a 4.5-percentage-point markup from the yield of the last 10-year Treasury auction before June 1.... Those borrowers currently pay 7.9 percent interest; according to [Senate] aides, they would pay 6.31 percent under the Senate compromise.

A Washington Post story explains that "[a]ll of these numbers are tentative and could likely change when senators receive an analysis from the Congressional Budget Office, which is expected on Thursday, according to four aides with knowledge of the negotiations. A deal has not yet been finalized, but if it is, a vote could come next week."

The New York Times also has a story here.

More on the effort to restore lower student-loan interest rate

Following up on Brian's post early this morning about a failed Senate bill that would have rolled back the student-loan interest rate that doubled earlier this month: CNN is reporting that a "bipartisan groups of senators have reached a tentative deal to help students facing the doubled interest rate."

Wal-Mart vs. living-wage legislation

Wal-Mart has been thinking about putting at least three large stores in the District of Columbia and had spent a chunk of money in the planning phase. Meanwhile, the D.C. City Council has been considering minimum-wage legislation that would require certain large retailers, including Wal-Mart, to pay its workers at least $12.50 per hour (or 50% greater than the base minimum wage now applicable to all employers subject to the District's minimum-wage law). Wal-Mart has said that if the minimum-wage proposal became law it would pull the plug on the planned stores. As explained in this article by Mike DeBonis, yesterday the D.C. Council voted 8-5 to approve the minimum-wage hike. The law could still be vetoed by D.C. mayor Vincent Gary and must pass through a congressional review period before it becomes effective.

Fourth Edition of Our Casebook Now Available

by Jeff Sovern

This is completely self-serving, but law professor readers of this blog may be interested to learn that the fourth edition of our casebook, Consumer Law, Cases and Materials, Fourth Edition is now available.  As I said in April, our goal was to continue comprehensive coverage of core consumer law subjects (like deceptive advertising, Truth in Lending, bait and switch, credit reporting and discrimination, credit card laws, lemon laws and other warranty rules, debt collection, and enforcement) while also updating the book to reflect new developments in the dynamic field of consumer law, including:  

• Internet marketing and social networks, such as Facebook

• The consumer protection issues that contributed to the subprime mortgage foreclosure crisis, as well as the legal fallout from that crisis, including the new Consumer Financial Protection Bureau  

• The Credit CARD Act of 2009 

• Online marketing and tracking as well as other privacy issues 

• Emerging payment systems – e.g., credit, debit and stored value cards  

• The latest U.S. Supreme Court developments on consumer arbitration  

• Predatory lending 

• Ad substantiation, celebrity and other testimonials 

• The debt buying industry and debt collection practices employed in that industry.

We added a new co-author, Chris Peterson of Utah and currently at the Consumer Financial Protection Bureau, to our lineup of Andy Spanogle of GW, Ralph Rohner of Catholic, and Dee Pridgen of Wyoming. Chris is known for scholarship on predatory lending, among other things, and he revitalized the predatory lending chapter, and made other significant contributions.  As in past editions, this text contains a balance of cases, problems that reflect modern situations, and notes with discussion questions and references to the latest consumer protection scholarship, including behavioral economic research that sheds light on how consumers actually behave. The updated teacher's manual and a new edition of Selected Consumer Statutes should be out shortly. I am quite excited about this new volume and I am confident that when people see it, they will share that excitement.