Matt Stoller: On Foreclosure Fraud, One of the Good Guys Gets a Win for a Change

Here.  This is a passionately-written piece, to say the least.  An excerpt:

Going up against the banks is not easy.  What these banks do to ensure that their opponents (their real opponents, not the pliant risk-averse operations like the Center for Responsible Lending) are weak is starve them of funds, over-lawyer them, smear them with PR, and basically do anything they can to ensure that it is painful, lonely, agonizing, and horrible to stand up for your rights and the rights of others.  Another one of these heroic figures, Lisa Epstein, was smeared in a juvenile report put out by the Florida Inspector General back in January.  Florida attorneys June Clarkson and Theresa Edwards were fired by Attorney General Pam Bondi, and their reputations savaged.  There’s a lot more to the story, of course.  It’s just a very narrow slice of what I saw.

UPDATE: A commenter has persuaded me that I should note that my own experiences with CRL have been extremely positive, and that in my experience their work and staff are outstanding.  When I post things to this Blog, it isn't always because I agree with them; sometimes it's because I think the views will be of interest to the readers of the Blog.

Did Ben Bernanke Save the Economy?

Federal Reserve Chair Ben Bernanke is hated by people on the left and right. But according to this article by Roger Lowenstein in the April 2012 Atlantic, he saved the American economy. Among many things, the article contains a brief history of the Fed.

Sant'Ambrogio and Zimmerman Paper: The Agency Class Action

Michael D. Sant'Ambrogio

 of Michigan State and my colleague

Adam S. Zimmerman

 of St. John's have written The Agency Class Action, Columbia Law Review (forthcoming).  Here's the abstract:

The number of claims languishing on administrative dockets has become a new “crisis” — producing significant backlogs, arbitrary outcomes and new barriers to justice. Coal miners, disabled employees, and wounded soldiers sit on endless waitlists to appeal the same kinds of administrative decisions that frequently result in reversal. Refugees seeking asylum from the same country play a dangerous game of “roulette” before arbitrary decisionmakers. Defrauded consumers and investors miss out on fair compensation, as agencies settle the same claims with wrongdoers without victim participation or meaningful judicial oversight.

Reformers have called for new resources, more administrative law judges and improved attorney fee arrangements. But surprisingly, commentators have largely ignored tools long used by courts to resolve common claims raised by large groups of people: the class action and other complex litigation procedures. Almost no administrative law process allows groups to aggregate and resolve common claims for relief. As a result, in a wide variety adjudicatory proceedings, administrative agencies routinely (1) waste resources on repetitive cases, (2) reach inconsistent decisions for the same kinds of claims, and (3) deny individuals access to the affordable representation that aggregate procedures otherwise promise. Moreover, procedural and substantive hurdles — including exhaustion of administrative remedies and judicial deference to agency expertise — often prevent federal courts from providing class-wide relief to parties in agency adjudications.

We argue that agencies themselves should adopt aggregation procedures, like those under Rule 23 of the Federal Rules of Civil Procedure, to adjudicate common claims raised by large groups of people. After surveying the current tools by which agencies could promote more efficiency, consistency and legal access — including rulemaking, stare decisis, attorneys fees and federal court class actions — we find agency class action rules more effectively resolve common disputes by: (1) efficiently creating ways to pool information about recurring problems and enjoin systemic harms; (2) achieving greater equality in outcomes than individual adjudication; and (3) securing legal and expert assistance at a critical stage in the process. In this way, The Agency Class Action represents a new kind of decision-making for administrative agencies — a blend of adjudication and rulemaking for large groups of people who similarly depend upon the administrative state for relief.

MSN Money: Debt Collectors Using Facebook to Collect Debts; Is it Legal?

by Jeff Sovern

Here.  An excerpt:  "One strategy collection agencies use, according to Michelle Dunn, a 24-year veteran of the debt-collection industry and the author of "The Guide to Getting Paid": setting up a fake profile and using it to try to friend someone (a few states have laws against online impersonation)."

I wonder how many provisions of the Fair Debt Collection Practices Act this violates.  Section 1692e prohibits "any false, deceptive, or misleading representation or means in connection with the collection of any debt." Wouldn't a fake profile by definition be false, deceptive, or misleading?   Subsection (11) of that section requires collectors to disclose that communications they send are from debt collectors.  Somehow, I doubt the friend requests include that information.  And if the friend request is the first communication from the collector, other disclosure requirements come into play. 

Section 1692f bars "unfair or unconscionable means to collect or attempt to collect any debt."  That language is vague enough that it might not capture this behavior, but then again it might.

If the collector posts something on the consumer's Facebook page, and the page is accessible to third parties, that would violate section 1692c's prohibition on communicating with third parties in connection with the collection of a debt, as the article observes.

The authors of the FDCPA surely did not anticipate Facebook, but they seem to have regulated debt collectors' use of it just the same.

UPDATE: Ted Mermin pointed out to me a comment in the California Law Review, Debt Collection in the Information Age: New Technologies and the Fair Debt Collection Practices Act, authored by Ted's former student, Colin Hector, that addresses the FDCPA's application to the use of Facebook to collect debts.

 

 

WaPo Article on Payday Loan: $450 cost for $1,500 loan, or 651% APR

Here. An excerpt:

[W]henever Newman [the borrower] tried to pay more than the monthly rate, the lenders encouraged him to keep his money.

“They were trying to keep that money going, to hold on to me and keep pumping cash out of me,” Newman said.

* * *

“I’ve gotta tell people to stop. ‘Think. Slow down. Sit back. Don’t do it,’ ” Newman told me. “Those loans are addicting. I always wonder, ‘Who’s gonna give me a loan?’ and all of a sudden — Bam! — here’s someone who will.”

Mitt Romney's Theory of Government Regulation

Republican presidential candidate Mitt Romney said today that "I want regulators to see businesses and enterprises of all kinds as their friends, and to encourage them and to move them along."

So, the purpose of government regulation is to aid business. The FDA, the CPSC, the CFPB, and other regulators should not be axed as, say, former candidate Rick Perry may have favored. No, they exist to affirmatively help business.They are all just variants on the Department of Commerce!

In a Romney Administration, we'd no longer have to debate whether there is (or is not) regulatory capture by big business because regulatory capture would be the governing principle.

Let's see whether the Democrats will respond with a different theory of regulation.

Marketing Tobacco to Kids

Read this new report by the American Heart Association and the Campaign for Tobacco-Free Kids claiming that the big tobacco companies and convenience stores work together, illegally, to market tobacco to kids.

Court Denies Request by “Consistent Constitutionalist” Ron Paul to Identify Anonymous Political Videographer

by Paul Alan Levy

In a narrow but still important victory for free speech, Chief Magistrate Judge Maria-Elena James of the United States District Court for the Northern District of California has rejected once again the motion of presidential candidate Ron Paul for leave to pursue discovery compelling Google and Twitter to identify the anonymous user or users who created and publicized a YouTube video that trashed then-candidate Jon Huntsman while urging viewers to vote for Paul.

Times Article: How Companies Learn Your Secrets

by Jeff Sovern

I've been meaning to blog about an interesting article in The Sunday Times Magazine of a couple of weeks ago with the above-captioned headline.  The article describes how Target wanted to know when women were in the second trimester of a pregnancy, so it could beat other retailers in selling them baby products.  Target eventually noticed that during the second trimester, women tended to buy certain products.  Accordingly, when Target noticed particular women buying those products, it sent them ads for pregnancy-related products. Some people were unhappy about receiving such ads from a company they had not told they were pregnant, and so Target instead started sending pregnant women circulars with some pregnancy-related products and some unrelated products (e.g., a lawnmower or wine glasses) to create the illusion that Target did not know about the pregnancy and it was just coincidence that the women were receiving such ads for pregnancy-related products.  It appears that these circulars led to a substantial increase in sales.

At least two things are troubling about this practice.  The first is the privacy invasion: Target knows when you're pregnant, even though you haven't told it so.  The second is the deception: Target wants to keep you from realizing that it knows when you're pregnant and so it engages in conduct which is likely to mislead you into thinking it doesn't know that you're pregnant.  Target clearly understood that some consumers found its behavior objectionable and so took steps to keep them from realizing the truth.  It's ironic: Target has learned something about its customers that they would rather it not know--that they are pregnant--and Target doesn't want the customers to know what it knows.  Target is invading its customers' privacy while protecting its own secrecy. To put it in terms of the FTC's standard for deception, Is that likely to mislead the consumer acting reasonably under the circumstances into thinking Target doesn't know they're pregnant?

How Does the Pay of CEOs Compare With the Pay of Their Employees?

The Dodd-Frank legislation aimed to find out. Section 953(b)(1) of the Act directed the Securities and Exchange Commission to issue a regulation requiring every publicly held company to publish--

(A) the median of the annual total compensation of all [of its] employees ..., except the chief executive officer (or any equivalent position)...;
(B) the annual total compensation of the [company's] chief executive officer (or any equivalent position); and
(C) the ratio of the amount described in subparagraph (A) to the amount described in subparagraph (B).

Sounds reasonably straight forward, right? Well, not to the SEC. It hasn't even proposed a regulation to implement section 953(b)(1). Dodd-Frank was enacted in July 2010.

As the Consumerist explains, more than two dozen members of Congress have written to the Chair of the SEC asking the agency to implement section 953(b)(1). Read the letter sent by House members here.