Consumer Law & Policy Blog

CFPB Wants to Hear From Students

Here's the email they sent out:

 

Good afternoon,  

We need your help to figure out what’s the deal with financial products marketed to students, like debit cards and checking accounts.  

Email us at CFPB_StudentsFedReg@cfpb.gov by March 18 to tell us about any aspect of your experience.  

That may include:

• Signing up for the card or account
• Fees you’re charged to use the card or account
• Which cards or accounts you chose, whether your school recommended them or you
       shopped around

College is a time when many of us signed up for our first bank account. Often schools set up agreements with financial companies to offer cards and accounts to their students. Today, many students can add banking services on to their student ID card to pay for everything from a load of laundry to shopping online.  

While credit card issuers publicly disclose these types of agreements with schools, we know less about these arrangements when it comes to other student products, like student checking accounts and debit cards to access student loan funds. We want to see if students are getting a good deal and what schools can do to help them through the process.  

That’s why we need your help. We want to hear about your experience with financial products designed for college students.  

We’ll use your comments to work with school officials on ways they can make sure that schools and students are getting off on the right foot when it comes to managing their money during college. We’ll also publish a summary for everyone who contributes and let you know how you can continue to help make sure the market is working for everyone.  

Tell us your two cents today. 
 

Thank you,

Rohit Chopra
Student Loan Ombudsman 

 P.S. -- Learn more about our work for students.

American Banker Report: Warren, Senate Dems Give No Ground on CFPB Structure

Here. 

Times Editorial on the Republican War on Consumer Protection and the CFPB

Quietly Killing a Consumer Watchdog. Excerpt:

The consumer bureau has taken seriously its mandate to protect the public from the kinds of abuses that helped lead to the 2009 recession, and it has not been intimidated by the financial industry’s army of lobbyists. That’s what worries Republicans. They can’t prevent the bureau from regulating their financial supporters. Having failed to block the creation of the bureau in the 2010 Dodd-Frank financial reform bill, they are now trying to take away its power by filibuster, and they may well succeed.

Does Senate "Advice and Consent" Always Require an Affirmative Vote?

For those of you following the controversy over President Obama's recess appointments to the NLRB and the CFPB, Matthew Stephenson has an interesting essay in the current issue of the Yale Law Journal. Here's the abstract:

It is generally assumed that the Constitution requires the Senate to vote to confirm the President’s nominees to principal federal offices. This Essay argues, to the contrary, that when the President nominates an individual to a principal executive branch position, the Senate’s failure to act on the nomination within a reasonable period of time can and should be construed as providing the Senate’s tacit or implied advice and consent to the appointment. On this understanding, although the Senate can always withhold its constitutionally required consent by voting against a nominee, the Senate cannot withhold its consent indefinitely through the expedient of failing to vote on the nominee one way or the other. Although this proposal seems radical, and certainly would upset longstanding assumptions, the Essay argues that this reading of the Appointments Clause would not contravene the constitutional text, structure, or history. The Essay further argues that, at least under some circumstances, reading the Constitution to construe Senate inaction as implied consent to an appointment would have desirable consequences in light of deteriorating norms of Senate collegiality and of prompt action on presidential nominations.

Imagine the president sending a list of executive-branch nominees to the Senate with a note saying they will assume office within 90 days unless the Senate rejects them first. If Noel Canning stands and the Senate can block all presidential nominees through inaction, will this idea come to seem less "radical?"

Congressional Research Service Report Finds 329 Recess Appointments Since Start of Reagan Administration Would Have Been Invalid Under Noel Canning

Here.  Of those, 250 were made by Republican presidents.  Some of the supposedly unlawful appointments were of Court of Appeals judges.  (HT: Barbara Traub)

Full Court Rebuffs Recess-Appointments Challenge

On Monday, we told you about one company's efforts to bring its challenge to President Obama's recess appointments before the U.S. Supreme Court. The challenge came in the form of an emergency stay application directed to Justice Ginsburg, which she wasted no time in denying. The challenger -- a company, known as HealthBridge Management, that is mired in an ugly labor dispute -- immediately redirected its request to Justice Scalia, who in turn referred it to the full Court. Today, the full Court issued a brief order denying the request. (Justice Alito's sister is one of the lawyers for the company, so he recused himself.)  SCOTUSblog has more details here.

Ed Mierzwinski: Senators Hold CFPB Director Hostage, Roil Markets

Here.  This should be read by anyone interested in consumer protection. 

More on the Republicans and the CFPB

So much is being written about Republican opposition to confirmation of the CFPB's director, Richard Cordray, that it's hard to keep up with it all.  But a couple of recent pieces pull a lot together and are worth a look. One is Nobel Laureate and Times columnist Paul Krugman's op-ed yesterday, Friends of Fraud, about how Republican attempts to kill the bureau enable fraud.  And the other, from Mike Konczal, draws on Adam Levitin's testimony to refute the most recent letter from the Republican senators.  It's titled Why the Republican CFPB Arguments Are Wrong. 

Kent Barnett Paper on Separation of Powers Litigation

Kent H.Barnett of Georgia has written To the Victor Goes the Toil--Remedies for Regulated Parties in Separation-of-Powers Litigation, in which he mentions the Big Spring case over the validity of the president's recess appointments, including to the Consumer Financial Protection Bureau.  Here's the abstract:

The U.S. Constitution imposes three key limits on the design of federal agencies. It constrains how agency officers are appointed, the extent of their independence from the President, and the range of issues that they can decide. Scholars have trumpeted the importance of these safeguards with soaring rhetoric. And the Supreme Court has permitted regulated parties to vindicate these safeguards through implied private rights of action under the Constitution. Regulated parties, for their part, have been successfully challenging agency structure with increased frequency. At the same time, regulated parties, courts, and scholars have largely ignored the practical question of “structural remedies”—i.e., how to remedy the violation of structural safeguards for prevailing regulated parties. This inattention may arise because courts often provide what seems at first blush to be an appropriate remedy: severing the structural defect from an agency’s “organic” act. In fact, however, structural remedies often fail to satisfy core remedial values relevant to regulated parties—namely, compensating past harm, preventing future harm from the past defect, incentivizing regulated parties to seek redress, and deterring structural violations—and may leave regulated parties in a worse place than they occupied before asserting the challenge. These ineffectual remedies thereby undermine the very safeguards that judicial decisions purport to vindicate and rendering any “private right” potentially illusory. Courts, in response, can improve the status quo. They could select (or Congress could provide) better remedies, and this article considers how they could do so. But if structural remedies cannot be sufficiently improved, courts should either become more candid about the underlying safeguards’ limitations, or reconsider altogether the nature of the safeguards and regulated parties’ relationship to them.  

 

Recess Appointments Challenge Reaches the Supreme Court; Justice Ginsburg Denies Emergency Application

by Deepak Gupta

Earlier than many had expected, a challenge to President Obama's recess appointments reached the doorstep of the U.S. Supreme Court this morning, but it was quickly rebuffed this afternoon by Justice Ginsburg in her capacity as Circuit Justice for the Second Circuit. Justice Ginsburg did not request a response or refer the application to the full Court.

Today's challenge came in the form of an emergency application filed by Paul Clement on behalf of an employer in a labor dispute. The employer sought a stay of a district court injunction ordering the reinstatement of striking workers. The district court issued the order under a National Labor Relations Act provision authorizing injunctive relief to protect the NLRB's jurisdiction while the board decides whether to take action. Clement's application argues that “[i]t makes little sense for lower courts to order immediate action at the behest of the Board when the Board’s ability to act is in profound doubt and will be addressed by this Court. ... The validity of the President’s recess appointments to the Board is a question that will inevitably and quickly find itself before this Court."  He's probably right about that last part; many cases raising the constitutionality of the NLRB recess appointments are now pending before the courts of appeals. As far as I'm aware, none of the court of appeals cases directly challenge the CFPB appointment and the only direct court challenge to the Cordray appointment is in the Big Spring case, in which the plaintiffs lack standing.

The docket is here. More details at SCOTUSblog, Politico, and the Legal Times.