Posted by Brian Wolfman on Monday, March 11, 2013 at 11:17 AM | Permalink | Comments (1) | TrackBack (0)
In time for Sunshine Week, the Center for Effective Government has issued this report on how the Obama Adminsitration is doing in meeting its pledge to be "the most transparent administration in history." According to the Center, there's good and bad. Here's a synopsis:
The Obama administration has dedicated more effort to strengthening government transparency than previous administrations. The president entered office offering a grand vision for more open and participatory government, and this administration used its first term to construct a policy foundation that can make that vision a reality, issuing an impressive number of directives, executive orders, plans, and other actions aimed at bolstering government openness. With the notable, glaring exception of national security, the open government policy platform the Obama administration built is strong. However, the actual implementation of open government policies within federal agencies has been inconsistent and, in some agencies, weak.
The Center makes 10 recommendations to improve government transparency, as follows:
Create agency environments that support open government
Improve the accessibility and reliability of public information
Reduce national security secrecy
Posted by Brian Wolfman on Monday, March 11, 2013 at 10:50 AM | Permalink | Comments (0) | TrackBack (0)
by Brian Wolfman
Federal prescription drug oversight was significantly deregulated by the Food and Drug Modernization Act of 1997 (FDAMA), which was signed by President Clinton on November 21, 1997. Among other things, section 127 of FDAMA eliminated FDA authority over drug compounding companies, leaving regulatory oversight to state law. In theory, compounding involves only the production of a particular drug to fit the unique needs of a patient by combining or processing already approved ingredients. For instance, a compounder might re-process an FDA-approved drug to eliminate an inactive ingredient to which the patient is allergic.
Before FDAMA was enated, then FDA Commissioner David Kessler testified against exempting compounders from FDA regulation. Current FDA Commissioner Margaret Hamburg wants FDA oversight restored.
Last night, "60 Minutes" aired an expose on compounding, focusing on one compounding company that, absent any FDA oversight, produced unsterile drugs that killed and permanently injured many people. To watch the story, go here or click on the embedded video below.
Posted by Brian Wolfman on Monday, March 11, 2013 at 09:31 AM | Permalink | Comments (0) | TrackBack (0)
In the new tax law that went into effect on January 1, capital income tax rates on certain high-income taxpayers went from 15% to 20%. When you add in the new 3.8% Medicare surtax on net investment income, which includes capital gains, you get an overall 23.8% capital income tax rate for high-income taxpayers. (High-income generally means $400,000 in annual income for single taxpayers and $450,000 for married taxpayers.) Some people claim that higher taxes on capital income will discourage investment, harming the economy and depressing employment.
In this article, Chris Sanchirico of Penn Law School concludes otherwise. Here's the abstract:
One of the main arguments against raising capital income tax rates is that doing so discourages savings and investment and hinders economic growth. However, academic research on taxes and growth suggests that this argument has no real basis. And the primary alternatives to capital income taxation — labor income taxes and increased government borrowing — carry their own potentially adverse effects on growth.
Posted by Brian Wolfman on Monday, March 11, 2013 at 07:53 AM | Permalink | Comments (0) | TrackBack (0)
by Jeff Sovern
Earlier in the week I linked to a Times editorial, Bleeding the Borrowers Dry, about the practice of online payday lenders of lending to consumers in states that bar the kinds of high-interest rate loans payday lenders provide. Here is a link to my letter in the Times about the prospects of a bill that would block payday lenders from charging higher rates than allowed in the state the borrower lives in.
Posted by Jeff Sovern on Friday, March 08, 2013 at 08:51 PM in Predatory Lending | Permalink | Comments (3) | TrackBack (0)
The Times report is here. An excerpt:
The messages, which typically promise gift cards to national chain stores or other prizes, are sent to random phone numbers and usually direct recipients to a Web site where they are asked for personal information like Social Security numbers or credit card numbers, agency officials said.Rarely, if ever, do consumers receive any actual reward, said C. Steven Baker, the commission’s Midwest region director. Instead, the Web sites often take users through multiple screens that ask them for more detailed information or entice them to sign up for free trials of products, then charge them for shipping and handling.
* * *
Roughly 60 percent of mobile phone users have received one or more spam text messages in the last year, [Baker] said, and about 15 percent clicked on the link included in the message.
Federal law bars the use of automated dialing machines to send text spam, which as a practical matter means that such spam is illegal, because it takes so much time to send texts manually that text spam becomes uneconomic.
Posted by Jeff Sovern on Friday, March 08, 2013 at 12:56 PM in Federal Trade Commission, Privacy | Permalink | Comments (0) | TrackBack (0)
by Jeff Sovern
Here. An excerpt:
As with the mortgage cases, the investigation focuses on the banks' poor paperwork and their weak tracking of the debts.
When they sold delinquent credit card debt to the buyers, often at only a few cents on the dollar, they allegedly failed to provide them with the evidence that the borrowers owed the money. It is unclear, however, if the incomplete information was used to pursue borrowers who were not delinquent.
* * *
Investigators are finding that the banks often did not provide buyers of the debt with evidence that individual credit card accounts were delinquent. Instead the banks only provided basic information about how much money they thought was owed and who the borrower was, without providing original contracts, past statements, or other additional documentation.
I would be curious to know the cause of action My guess would be a UDAP violation. The FTC and CFPB are also looking into the matter; perhaps the CFPB could use its power to curtail abusive practices. One interesting feature about this is that consumers are not parties to the sales of the debts, yet they are the ones who are injured. The probe raises a host of questions: for example, if creditors are obliged to furnish the underlying information when selling the debts, presumably their costs will increase. Will they respond by raising prices to debt buyers? And will those higher prices make the purchase uneconomic for the debt buyers? If debt buyers have the paperwork, will they use it to prove their claims, thus depriving the rare consumers who are represented by counsel or otherwise well-advised of a successful defense that the debt buyer can't prove the claim? Will debt buyer claims end up being for lower amounts because the paperwork doesn't substantiate the amounts they have been claiming? Or will the only change be better-substantiated default judgments?
Posted by Jeff Sovern on Friday, March 08, 2013 at 12:31 PM in Consumer Financial Protection Bureau, Debt Collection, Federal Trade Commission, Unfair & Deceptive Acts & Practices (UDAP) | Permalink | Comments (1) | TrackBack (0)
Arpan Sura and Robert A. DeRise, both of Arnold & Porter, have written Conceptualizing Concepcion: The Continuing Viability of Arbitration Regulations. Here's the abstract:
Section 2 of the Federal Arbitration Act (“FAA”) provides that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” In AT&T Mobility Limited, LLC v. Concepcion, a sharply-divided Supreme Court held that the FAA preempted a California unconscionability rule that effectively guaranteed plaintiffs the right to class action arbitrations. A wildly controversial decision, Concepcion has left courts and litigants uncertain about whether longstanding state and federal regulations on the arbitration process remain viable. To take but a few examples, may the draftor of an adhesive contract select the arbitrators unilaterally or eliminate all of a plaintiff's rights to discovery? State and federal courts have traditionally not permitted such behavior. But to date there has been no systematic analysis of the impact of the Concepcion Court’s expansive reasoning on such regulations.Meanwhile, Lisa Tripp of Atlanta's John Marshall and Evan R. Hanson have written AT&T v. Concepcion: With Only Four Votes for the Deciding Rational [sic], Is it Precedent?. Here's their abstract:
The Supreme Court’s 2011 decision in AT&T v. Concepcion is considered by many to be a landmark decision which has the potential for greatly expanding the already impressive preemptive power of the Federal Arbitration Act (FAA). It is a well-known case exploring the interplay between state law unconscionability doctrine and the vast preemptive power of the FAA. In spite of its significance as an FAA case, Concepcion’s real importance may lie elsewhere.
Posted by Jeff Sovern on Friday, March 08, 2013 at 11:36 AM in Arbitration, Consumer Law Scholarship | Permalink | Comments (0) | TrackBack (0)
Posted by Brian Wolfman on Friday, March 08, 2013 at 08:32 AM | Permalink | Comments (0) | TrackBack (0)
Ginger Chouinard of New Mexico has written The 'Other' Credit Report: What You Don't Know Can Hurt You. Here's the abstract:
Nearly 90% of financial institutions use ChexSystems or similar account screening reports in their account opening process, yet they are under no duty to disclose this to consumers until an account is denied due to information contained in the report. For those consumers denied accounts, it is too late. They had no idea information was being collected on their checking account usage, much less that it could be used to deny them an account in the future, and are subsequently forced to go outside the mainstream and use expensive alternatives like check cashing services and money orders to conduct their everyday financial business. Increased consumer awareness of these reports is necessary so that consumers better understand the impact poor account management may have on their future usage of traditional banking services.
Posted by Jeff Sovern on Thursday, March 07, 2013 at 09:01 PM in Consumer Law Scholarship, Credit Reporting & Discrimination | Permalink | Comments (2) | TrackBack (0)