Homeowner Forecloses on Bank

This has been all over the internet and social media sites, but for those of you who missed it, here is a story about a homeowner who is foreclosing on a bank branch after winning a wrongful foreclosure suit.

Call for Papers--Regulation in the Fringe Economy

The Frances Lewis Law Center and the Washington and Lee Law Review are sponsoring a conference on Regulation in the Fringe Economy, which will take place on November 11, 2011 at the Washington and Lee University School of Law in Lexington, Virginia. The Washington and Lee Law Review will publish a symposium issue featuring the conference papers in 2012.

The symposium represents the most significant attempt to date by legal scholars to address the vexing legal and social issues created by lenders on the fringes of the economy who offer payday, auto title, for-profit college, and refund anticipation loans. A complete list of confirmed participants and their paper topics is available at the conference website: http://law.wlu.edu/fringe. 

The sponsors’ goal is to encourage and recognize excellent legal scholarship in this area. To advance their goal, the sponsors invite lawyers, judges, and scholars to submit papers on regulation in the fringe economy. Papers on related high-risk consumer financial products are also encouraged. An author should submit his or her manuscript in an exclusive submission on or before August 15, 2011. A submission should be no longer than 50 pages or 15,000 words. A limited number of submissions will be accepted. Authors will be notified of the acceptance of their paper and participation in the symposium no later than August 20, 2011.

Selected authors will present their papers at the November 11 conference. All participants are asked to provide their own travel expenses. Papers specifying the conference may be mailed to the Washington and Lee Law Review or sent electronically to lawreview@wlu.edu. The Law Review Articles Editors and Washington and Lee University School of Law Professor Margaret Howard will review the papers.

Even if you are not able to submit a paper, you are invited to attend the conference. There will be no charge for attending. The Frances Lewis Law Center is a licensed Virginia Continuing Legal Education provider which will supply Virginia CLE credit for those attending.

 

Honda Pitchman Has Difficulty Getting Deal He Advertised

by Jeff Sovern

One of my students, Andre Pascariu pointed me to this story about an actor who appeared in a Honda commercial and then decided to take advantage of the leasing offer he had pitched.  The first dealership said his 709 credit score qualified him for the offer, but they didn't have the car he wanted.  The second dealership had the car, but told him his credit score--which they said was 663--was too low for the special offer; they said he could lease the car only at a higher rate.  Because each credit bureau uses a different algorithm for calculating FICO scores, and might also have different information in its files, it's possible that both dealers were telling the truth.  Still, suppose the second dealer was attempting to inflate its charges by choosing to use the lowest credit score it knew of for the borrower.  Would that violate any laws?  Because the actor was African-American, it's natural to wonder if the dealer regularly played such games with people of color; if so, it would probably have violated the Equal Credit Opportunity Act, but if it treated everybody that way, would there be a violation of any law?  I'm not aware of any laws that require lenders to use the lowest credit score they know of, so my answer would be no.

Façonnable USA Persuades Colorado Judge to Use Weak Standard for Identifying Internet Critics

by Paul Alan Levy

Over the past several years, we have described the developing law that offers protection for anonymous Internet posters by requiring notice to the poster and the presentation of evidence supporting claims of wrongdoing.  We argue for this rule because it encourages participation in public discourse while ensuring that a plaintiff who has suffered a serious wrong will have a way to vindicate its rights.

However, in a recent decision, a federal magistrate judge in Colorado turned his back on ten years of precedent protecting anonymous Internet speech to hold that a Wikipedia user who inserted strong criticisms of a fashion company could be identified based only on the unsworn say-so of a company vice-president who claimed vaguely that the Wikipedia entries were false.

Alternative Ways to Skin a Cat

by Jeff Sovern

The following is an excerpt from an email by a financial institution lobbyist to a Senator:

Senator, we would appreciate it if you would propose the following laws concerning the Consumer Financial Protection Bureau:

Bar the Bureau from issuing any new rules until the latest of:

A.    The Rapture

B.     Spiderman opens on Broadway

C.     The end of the NFL lockout

D.    The end of time

Provide that rules issued by the Bureau can be overruled by any of the following:

A.    Bernie Madoff

B.     Simon Cowell

C.     Banks

D.    Anybody

Bar Elizabeth Warren from serving as director of the Bureau unless

A.    She admits that she made a recommendation to attorneys general, as critics charge, rather than giving advice, as she has acknowledged.

B.     She agrees to protect financial institutions rather than consumers.

C.     She seems likely to win the Senate election in Massachusetts unless she serves as director.

D.    She can provide a copy of her birth certificate showing that she was never born.

Replace the director of the Bureau with:

A.    The creative team for the Spiderman musical.

B.     The New York State legislature.

C.     A five member Commission, each of whom believes in a different religion, including one who worships Mammon.

D.    No one.

Geithner: Auto Company Bailouts a Big Success So Far

In an op-ed published today, Treasury Secretary Timothy Geithner explains why he thinks the Obama Administration's bailouts for Chrysler and Ford were good for Detroit and good for the economy more generally.

International Science Panel Says Cell Phones Are "Possible" Carcinogens

The Washington Post reports this morning that

A respected international panel of scientists says cellphones are possible cancer-causing agents, putting them in the same category as the pesticide DDT, gasoline engine exhaust and coffee. The classification was issued Tuesday in Lyon, France, by the International Agency for Research on Cancer [IARC] after a review of dozens of published studies. The agency is an arm of the World Health Organization and its assessment now goes to WHO and national health agencies for possible guidance on cellphone use. Classifying agents as “possibly carcinogenic” doesn’t mean they automatically cause cancer and some experts said the ruling shouldn’t change people’s cellphone habits. “Anything is a possible carcinogen,” said Donald Berry, a professor of biostatistics at the M.D. Anderson Cancer Center at the University of Texas.

One problem is that cell phone use is so widespread, it's hard to test the cell-phones-cause-cancer theory: "Because cellphones are so popular, it may be impossible for experts to compare cellphone users who develop brain tumors with people who don’t use the devices. According to a survey last year, the number of cellphone subscribers worldwide has hit 5 billion, or nearly three-quarters of the global population."

Read the whole story here and the IARC's lengthy press release here.

Note that, last year, the U.S. Federal Communications Commission changed its guidance on cell phones by dropping a long-standing recommendation that concerned consumers purchase phones with lower levels of radiation emissions.

No Warren Peace

by Jeff Sovern

The prospect of Elizabeth Warren heading the Consumer Financial Protection Bureau continues to elicit discussion. Two Bloomberg columnists have weighed in recently: Jonathan Alter wrote Why Obama Should Fight Hard for Elizabeth Warren, while William D. Cohan countered with Elizabeth Warren Should Bow Out for Change.  Cohan's argument is that Warren "has made herself so bloody disagreeable on Capitol Hill that she has obliterated her chance of winning the Senate votes she needs to be confirmed."  He cites the McHenry disgrace of last week as evidence.  In other words, it somehow became Professor Warren's fault that a Congressman apparently reneged on a deal with her and effectively called her a liar for objecting to his behavior. Of course, as Cohan noted, that Congressman wouldn't have been able to vote on her confirmation anyway, because he's in the House, not the Senate.  Meanwhile, 44 Republican Senators have said they won't vote to confirm aynone to head the Bureau unless the Bureau's power is reduced--meaning that the President has nothing to lose by nominating Elizabeth Warren because neither she nor anyone else can be confirmed. 

War is Peace

As I mentioned a little while back, even as the rhetoric about high taxes persists, the total tax burden on U.S. taxpayers has hit historic lows.  Now, Bruce Bartlitt, former Reagan and Bush(I) official, explains in this New York Times piece just how ridiculous the claims of high taxes are. He describes why "if taxes are low historically and in comparison with our global competitors, how ... Republicans [are] able to maintain that taxes are excessively high[.]" "They do so by ignoring the effective tax rate and concentrating solely on the statutory tax rate, which is often manipulated to make it appear that rates are much higher than they really are." And, to rebut "[t]he GOP [claim that] global competitiveness requires the United States to reduce its corporate tax rate," he's got a cute little chart showing that effective U.S. corporate tax rates are the lowest in the developed world. He then ends with this thought: "The truth of the matter is that federal taxes in the United States are very low. There is no reason to believe that reducing them further will do anything to raise growth or reduce unemployment."

Federal Court in Virginia Holds Ban on Direct Corporate Contributions Unconstitutional

A federal district judge in Virginia, James Cacheris, has held that the federal law banning direct corporate contributions to candidates violates the First Amendment, in light of the Supreme Court's controversial Citizens United decision, which struck down federal restrictions on so-called "indepedent" corporate expenditures. The relevant analysis starts at page 42 of the court's decision. Here's the key passage:

This Court recognizes that it must strive to avoid rendering constitutional rulings except where absolutelynecessary. Ashwander v. Tenn. Valley Auth., 297 U.S. 288, 347 (1936). But for better or worse, Citizens United held that there is no distinction between an individual and a corporation with respect to political speech. Thus, if an individual can make direct contributions within FECA’s limits, a corporation cannot be banned from doing the same thing. So because individuals can directly contribute to federal electioncampaigns within FECA’s limits, and because [the corporation contributions ban in 2 U.S.C.] § 441b(a) does not allow corporations to do the same, § 441b(a) is unconstitutional.

So, "for better or worse," this judge felt that he had no choice. The Supreme Court made him do it. Go read FEC v. Beaumont, 539 U.S. 146 (2003), and ask yourself whether you would have lacked discretion to come out the other way. The ban on direct corporate contributions struck down by Judge Cacheris has been in federal law since 1907.