Used Car Buyer Waits 3 Years for Arbitration Hearing

Former CPSC Chair Endorses Elizabeth Warren

There's been a ton of coverage lately speculating about whether Elizabeth Warren will get the CFPB nod, and arguing the case for or against.  Amid that chatter, a piece by former CPSC chair Ann Brown stands out as particularly compelling:

When I took the job of chairman of the Consumer Product Safety Commission in the 1990’s, I’d never administered a large staff. I’d never run an agency, a corporation or any large institution.

I had, however, been a children’s safety advocate and consumer specialist for years, and I’d been a close outside observer of the commission. I knew its inner workings like the back of my hand, and I anticipated issues we would address and knew how we should address them.

During my confirmation hearing, not a single senator asked me about my “lack of administrative experience.” For that matter, I am sure that countless other agency heads and cabinet officials – including ones still on the job – also skirted those sorts of questions, even though they had similar backgrounds.

This has me thinking: Why is it that officials and pundits who don’t support Elizabeth Warren’s nomination as director of the new Consumer Financial Protection Bureau have taken to questioning her qualifications?

Having run a large, highly visible consumer agency, I know first-hand that Warren has the right experience to succeed. She is likely to bring visibility to the agency as its first director – the sort of visibility that can allow it to build public confidence, insulate itself from industry capture, recruit first-rate career staff and build momentum for meaningful reform.

* * *   You may have noticed that bank lobbyists don’t tend to question the experience – administrative or otherwise – when one of their colleagues gets a government job. Nobody says that former bank lobbyists – like John Dugan, now head of the Office of the Comptroller of the Currency – lacked the necessary administrative experience.

The president is faced with an important decision in who to nominate as the first CFPB director. He ought to consider the real issues.

Brown's point about the importance of Warren's visibility and public credibility, and the way in which that could translate into getting the agency off on the right track, strikes me as the best argument I've seen for Warren's nomination.  You can read the full piece here.

FTC Issues Tough Rules For Debt Settlement Companies

As explained in this article from today's Washington Post, the Federal Trade Commission has just issued tough rules aimed at curbing the deceptive practices of the debt relief industry. The article explains:

The Federal Trade Commission issued stringent new rules cracking down on the burgeoning debt-relief industry . . .. The new regulations prevent any for-profit debt-relief company from collecting advance fees as of Oct. 27 . . .. Starting Sept. 27, it also requires companies to disclose how much the process could cost and how long it may take consumers to see results. The FTC also set new rules for creating and managing the accounts consumers use to save money to pay off debt. Advertising claims were also restricted.

Read the FTC's explanation of the new rules and the rules themselves. Go here and here for our prior blog posts on the debt settlement industry.

Op-Ed: Warren Would Protect Consumers, Not the Banks

My op-ed appears in The Hill's Congress Blog.

NCLC Practice Tools

 Here are some recent NCLC practice tools: 

1. Free Webinars:   July 28 at 2pm:  "Fundamental Freedoms in Manufactured Home Communities " and  August 19th at 2pm : "Dealer Kickbacks:  How Car Dealers Are Paid to Put Us in More Expensive Loans and How We Can Stop It".  Contact jhiemenz@nclc.org for this  and future webinars.  Go to www.consumerlaw.org/issues/seniors_initiative/webinar.shtml for the 2010 schedule and FREE downloads of  PAST webinars

 

 2. Four New NCLC REPORTS:  

Deceptive Practices & Warranties Ed. (May-June): Practice implications of two June Sup. Ct .  arbitration decisions; new way to attack arbitration claused; 5 lessons from a $2 million award for sale of a rebuilt wreck

 

Bankruptcy & Foreclosures Ed. (May-June): 2 new Sup. Ct.  bankruptcy decisions on disposable income and claiming exemptions; the new Home Affordable Unemployment Program

 

Consumer Credit & Usury Ed. (May-June): FRB limits on credit card penalty fees; SAFE Act's implications for mortgage brokers AND consumer attorneys; demise of the guaranteed student loan program; new rules re student loan disability discharges

 

Debt Collection & Repo Ed. (May-June): consumer victories defending collection suits; $1.5 million debt harassment award; GAO report on debt settlement; FCC rule on pre-recorded calls; report on debt buyers; report on self-help repossessions; FDCPA case summaries

 

3.   Online registration and the Consumer Rights Litigation Conference  brochure now available at www.nclc.org --the consumer law highlight of the year,  Nov. 11-14, 2010, at the Park Plaza Hotel,  Boston, with over 50 breakout sessions, a Consumer Class Action Symposium, and intensives on mortgage litigation, debt collection defense, and bankruptcy protection for homeowners.  Join over 700 colleagues and fabulous speakers.  CLE credit. 

 

4. Discriminatory mortgage upcharge class certified in Ramirez v. Greenpoint Mortgage Funding, Inc. (N.D. Cal. July 20, 2010), reprinted at www.nclc.org/unreported, based upon brokers being given discretion to increase mortgage loan interest rates.

 

 5 .  Additional FCRA cases on  furnisher liability now analyzed on Fair Credit Reporting's companion website, a free resource for subscribers to that volume.  

 

 6 . NCLC launches its new website--check it out at www.nclc.org   

 

Former Reagan Administration Solicitor General Charles Fried Supports Elizabeth Warren To Head Consumer Financial Protection Bureau

See this.

Elizabeth Warren for Consumer Financial Protection Bureau Director

by Deepak Gupta

The debate over whether President Obama should name Elizabeth Warren to head the new consumer financial protection agency -- an agency for which she provided the intellectual architecture, and that probably never would have been created without her  -- has taken on a surprisingly high profile over the past week, at times resembling an election campaign or Supreme Court nomination fight. 

On Friday, Felix Salmon went so far as to deem Warren's nomination a "foregone conclusion." And the latest signs, including positive comments today from Robert Gibbs and a steady stream of endorsements in the Senate, do suggest that Warren's appointment has become increasingly likely. One key indicator is that Gibbs described her not only as a "terrific candidate" but also as "very confirmable." (Interviewed a few days ago on Good Morning America, Obama himself was more equivocal.)

Today, Public Citizen endorsed Warren's candidacy and rolled out an online petition for supporters to sign.  It's no secret that the contributors to this blog are, and have been, strong Warren supporters all along. As Jeff Sovern said last week, "I want the CFPB to be just like Elizabeth Warren. . . . We need an agency that bases its decisions on empirical realities rather than ideology. Just like Elizabeth Warren. And if that's what we want, shouldn't the CFPB be led by Elizabeth Warren?"  Over at Credit Slips, where Warren was once a contributor, her friends and academic colleagues have been posting some must-read commentary on her candidacy. Katie Porter describes Warren--the person, not the caricature--as someone who sincerely believes in markets and wants to make them function more efficiently. And Bob Lawless talks about Warren as someone whose thinking is grounded in facts and pragmatism, not ideology. Finally, Adam Levitin demolishes one of the baseless criticisms of Warren that's been making the rounds--that she lacks the necessary administrative skills. (By the way, does anyone really believe that her opponents' true concern is insufficient administrative experience?)

My own view is that Warren should be the nominee, but not primarily for the reasons cited above. The other top candidates, Michael Barr and Gene Kimmelman, are experienced and well-respected consumer advocates who could probably also be counted on to arrive at the elusive right mix of empirical realism, consumer protection, and flexibility. Both have more Washington experience than Warren does. Indeed, Barr has been the true architect of the financial reform legislation within the administration and would bring to the job considerable government experience together with a scholarly background on consumer financial protection issues. He would be a fine choice. That said, Warren stands out for two reasons:

Truth 1, vitaminwater 0

by Steve Gardner

The Center for Science in the Public Interest, working with private plaintiff firms Reese Richman, LLP  and Whatley Drake & Kallas, were pleased to get a very well-considered opinion in our lawsuit against Coke involving vitaminwater (Coke  uses the lower case, as does the Court, so I grudgingly do as well).

I say that the opinion is "well-considered" because the Court wrote thoughtfully and well on many nuances of the law involving FDA regulation of food labels and the interplay with state consumer protection law.

Of course, it's nice that the Court roundly rejected almost all of Coke's arguments.

In short, our lawsuit says that it's deceptive to call a sugar-water drink "vitamin"-anything and the opinion essentially agreed that this states a cause of action.

                       

 

According To Data Analysis, Just-Completed Supreme Court Term Most Conservative "In Living Memory"

The Roberts Court just completed its 5th year. According to this article by Adam Liptak in today's New York Times, "[i]n those five years, the court not only moved to the right but also became the most conservative one in living memory, based on an analysis of four sets of political science data." Perhaps some of the recent movement can be explained by Justice O'Connor's departure and the ascendancy of Justice Alito, who, according to this 2009 statistical study by William Landes and Richard Posner, is the 5th most conservative justice in history. (Chief Justice Roberts is ranked fourth most conservative, but he replaced Chief Justice Rehnquist, who ranks second most conservative.)

How the New Consumer Financial Protection Law Will Affect FTC Authority

Guest Post by Dee Pridgen

 As consumer advocates celebrate the new consumer financial protection law, which certainly contains many good things for consumers, I wanted to take some time to figure out how this legislation will affect the nation’s first national consumer protection agency, the Federal Trade Commission.  While the FTC has neither been abolished (as has the Office of Thrift Supervision), nor suffered mandatory transfer of functions and personnel to the new Bureau of Consumer Financial Protection (as have the bank regulatory agencies), its authority and power in the area of financial services has been diminished, and it did not gain the quid pro quo hoped for in terms of streamlining the outmoded Magnuson-Moss rulemaking procedures.

The new law creates the Bureau of Consumer Financial Protection (BCFP) with sweeping powers to regulate in the consumer financial sector.  All the consumer financial protection functions of the Federal Reserve Board, Comptroller of the Currency, Federal Deposit Insurance Corporation, National Credit Union Administration, Department of Housing and Urban Development and a few other government entities are transferred to the BCFP. 

The FTC loses authority to promulgate rules, issue guidelines, or conduct studies or issue reports under the federal consumer credit laws but it retains its authority to enforce the credit laws with respect to entities under its jurisdiction (i.e., nonbanks).  [Section 1061(b)(5).]  However, the FTC will now share enforcement authority of the credit laws (e.g., TILA, ECOA, FDCPA, etc.) with respect to nonbanks with the BCFP.  The FTC and the Bureau will negotiate an agreement for coordination regarding enforcement actions. The BCFP will issue regulations in these areas in lieu of the Federal Reserve Board, which previously had that authority. Unlike the other regulatory agencies affected, no employee of the FTC will be mandated to transfer to the new agency. However, the FTC will likely be less active in the financial services area because the new agency will have broader authority. The FTC also retains all of its authority under the FTC Act with regard to economic sectors outside of financial services.