Article on Bank Charging Fees to Pay Checks Drawn on Its Own Accounts

Here. 

Do the FTC's New Advertising Guidelines Run Afoul of Section 230?

by Paul Alan Levy

Since Eric Goldman is our leading scholar on the issue of section 230 immunity, I hesitate to question the soundness of anything he says on the subject.  But I have qualms about his recent posts here and, with greater detail, here, arguing that the FTC has overstepped the bounds of section 230 immunity in one of the examples it gives in its new Guides Concerning the Use of Endorsements and Testimonials in Advertising. 

Professor Goldman questions example 5, in which the advertiser pays for a blog advertising service that

matches up advertisers with bloggers who will promote the advertiser’s products on their
personal blogs. The advertiser requests that a blogger try a new body lotion and write a
review of the product on her blog. Although the advertiser does not make any specific
claims about the lotion’s ability to cure skin conditions and the blogger does not ask
the advertiser whether there is substantiation for the claim, in her review the blogger
writes that the lotion cures eczema and recommends the product to her blog readers
who suffer from this condition. The advertiser is subject to liability for misleading
or unsubstantiated representations made through the blogger’s endorsement.

Professor Goldman argues that such liability would be subject to section 230 immunity, because both the company and the blogger are “users” of the advertising service’s interactive computer service.

However, it seems to me that Professor Goldman has not taken adequate account of the fact that the FTC is regulating the advertiser, not in its capacity as the provider or user of an interactive computer service, but in its capacity as the employer (in a larger sense) of the blogger.

New Jersey School Board Subpoenas Citizens Who Criticize Its Staff to Sue Them for Defamation

The Freehold School Board has subpoenaed New Jersey Online to identify several citizens who chimed in to discuss stories published in the Newark Star Ledger and New Jersey Online about several high administrators who got fake degrees from an online diploma mill, and hence received higher pay.  After New Jersey Online notified its subscribers of the subpoena, the ACLU of New Jersey and Freehold attorney Stuart J. Moskovitz stepped in to represent various anonymous posters, and NJ.com has refused to furnish identifying information about the posters.  Moskovitz points out that the subpoena violates the Electronic Communications Privacy Act, which limits the ability of governmental entities to obtain information about online speakers.

I contacted Marc Zitomer, the School Board’s lawyer, to get his explanation for the subpoena. 

Interesting Newsweek Take on CFPA Proposal

The story is titled You Call This Financial Reform?  Why there's been a lot of talk about protecting consumers but little action . . .

Teaching Consumer Law Conference – Houston, Texas, 21 & 22 May 2010

Once again, the Center for Consumer Law at the University of Houston Law Center is organizing an international conference on “Teaching Consumer Law."   The Conference will focus on how, if at all, the teaching of consumer law should be affected by the recent recession and eventual recovery. The Conference is directed at those currently teaching or interested in teaching consumer law at the law school or college level. A discussion of prior conferences may be found here (2006) and here (2008).

The conference will deal with themes such as:

• How should we integrate recent economic developments into a consumer law course?
• How has the economic downturn affected consumer law outside of the U.S.?
• Does the U.S. need additional consumer regulation?
• Are there innovative ways to resolve consumer problems that should be taught? 
• How can we teach the multitude of subjects encompassed within the term “consumer law”?
• A consumer law update

Papers are invited on any of the above themes, or any other topic related to the teaching of consumer law and recent economic developments. Proposed papers may discuss the law of any jurisdiction; however, the emphasis is on topics of interest to law school professors and those with an interest in entering the profession.

 

Those who wish to submit a paper are invited to forward a paper proposal including a brief abstract of not longer than 400 words and contact information for the author of the paper. The proposals should be sent to Dean Richard M. Alderman at alderman@uh.edu. Proposals should be submitted no later than 4 December 2009. Authors will be promptly notified of acceptance by 18 December 2009. Final drafts of the papers are to be forwarded by not later than the 1st of April  2006. The language of the conference is English.  

 

The conference will be held in Houston on the 21st and 22nd of May 2010 and will consist of one full-day and one half day session. Conference registration fees will be waived for all presenters. Some scholarships are available for travel and room costs. Selected papers will be published in the Journal of Consumer and Commercial Law, http://www.jtexconsumerlaw.com.

 

More information about the Conference will be posted as the program is finalized.

 

 

Car Sales Plummet After Cash-for-Clunkers Program Ends

Retail sales in the U.S. dropped in September by 1.5%, driven by a whopping 10.4% decrease in auto sales. (Excluding the drop in auto sales, retail sales actually rose by .5%, which was better than what analysts had predicted.) This data is consistent with, but does not prove, the theory that the cash-for-clunkers program, which ended in late August, did not spur new car sales overall, but simply pushed purchases forward somewhat. This blog has taken a hard look at the clunkers program in a number of posts, including here, here, here, and here.

Jenzabar Joins Trademark Abusers Hall of Shame

Jenzabar, a company that makes software systems for colleges and universities, has joined the trademark abusers’ hall of shame by relentlessly pursuing trademark claims against the makers of a documentary film about the student protests at Tiananmen Square.  Jenzabar objects to the fact that, on the handful of pages on a web site about the film that discusses Jenzabar, the name “Jenzabar” appears in the keyword meta tags.

The trademark claims are based on the fact that a Google search for “Jenzabar” brings up the main Jenzabar-related page on the web site about the film in the first ten search results.   But these claims are preposterous, for many reasons.  Not only has Google announced that it stopped supporting keyword meta tags in its search algorithm “many years ago,” (Yahoo! has also dropped keywords) but even if meta tags still mattered, their use would be protected as truthful speech that accurately describes the content of those web pages.  Moreover, trademarks are “infringed” only if users are confused about the source of a product or service, and no reasonable Internet user would be confused about whether Jenzabar is the sponsor of the web page.  Jenzabar also relies on the questionable theory of “initial interest confusion”; but as Public Citizen’s brief explains, that doctrine has no application here and in any event runs afoul of the First Amendment.

Because the trademark claims are so tenuous, it is hard not to assume that Jenzabar’s real agenda lies elsewhere. 

When Wall Street talks, Secretary Geithner Listens

Interesting story on Treasury Secretary Geithner's telephone logs, showing he talks with Goldman and Citi CEOs more frequently than the chairs of the House and Senate Banking committees.  HT Melissa Huelsman.

Home Affordable's weak start

By Alan White

            Two important reports on the foreclosure crisis and the Administration’s plan to end it were released on Friday.  So far the Home Affordable modification program (HAMP) is looking like an expensive failure.  Most disturbing is the conversion rate of temporary modifications to permanent ones, which is less than 4% for temporary mods initiated last April and May.  Servicer performance remains wildly inconsistent, and hundreds of thousands of homeowners who want to save their homes are slipping through the cracks.  The good news, I suppose, is that HAMP stimulated servicers to find half a million homeowners who appear to be suited for modifications rather than foreclosures.

            Treasury’s report of September data continues the approach of jealously guarding information about HAMP that does not cast it in a positive light.  The October monthly data report consists mostly of useless fluff, i.e. a bar graph showing the cumulative number of trial modifications, rather than simply reporting month-by-month totals, as HOPE NOW did.  The monthly totals of temporary modifications for July, August and September are around 100,000 to 120,000, basically the same number as the permanent modifications the industry was doing voluntarily before HAMP.  In fairness, servicers also closed 50,000 to 70,000 permanent modifications during those months, without HAMP subsidies.

            Treasury chose not to reveal the number of permanent modifications in September, which are appallingly low.  That information appears in the Congressional Oversight Panel’s report on HAMP.  After six months and 487,000 trial modifications, HAMP has resulted in fewer than 1,800 permanent modifications.  Nearly half of the permanent mods were done by a single servicer, Ocwen.  Even if we consider only the 50,130 temporary mods reported for the first two months of HAMP (April and May), the conversion rate is shockingly low.  The policy wonks who came up with the trial modification plan assumed that after culling out the homeowners who failed to make three payments, the rest of the trial mods would seamlessly convert to permanent mods in month four, given that three months should be sufficient to get the necessary paperwork in place.  It seems highly doubtful that 96% of homeowners with April and May trial mods were not able to make three payments.  The problem, therefore, must lie in servicers obtaining and completing the income verification and written agreement necessary to conclude a permanent mod. 

Joe Nocera Column Calling for Consumer Financial Protection Agency

by Jeff Sovern

Joe Nocera has a terrific column in today's Times, Have Banks No Shame?, supporting the Consumer Financial Protection Agency.  The column should be required reading for anyone interested in consumer protection.  Here's my favorite part:

The current bank regulators, [bankers] point out correctly, already have consumer protection as part of their portfolios. “All they need to do is enforce the regulations already on the books,” one top banker told me recently.

Exactly!  But they won't because the existing regulatory structure discourages regulators from enforcing consumer protection.  That's why we need the CFPA--because regulators focused on other matters (safety and soundness, for example) lose sight of consumer protection. And because the existing structure, with financial institutions able to choose which regulator they will be subject to, pits regulators against each other in a competition for financial institutions to regulate.  Regulators competing for financial institutions are not likely to impose strict rules on those institutions; instead, they have every incentive to race for the bottom.  And that is undoubtedly a big part of the reason financial institutions prefer the current system: they would rather control the regulators than be controlled by them.