CL&P Blog

Please keep Katie Porter on the House Financial Services Committee

by Jeff Sovern

The Wall Street Journal is reporting that Representative Katie Porter may be dropped from the House Financial Services Committee.  As someone who has regularly listened to House Financial Services Committee hearings on consumer matters for years, I believe that would be a huge loss. I cannot think of anyone who has been a more effective questioner of witnesses. And Katie may know her stuff better than any other committee member. She has taught courses on subjects within the committee's jurisdiction, she wrote a consumer law casebook (as someone who co-authored a competing casebook, I can say that writing a casebook forces you to learn a great deal about the subject), she has written important articles on the topics within the committee's bailiwick, and she has practical experience, such as when she served as the independent monitor for compliance in California with the mortgage settlement. I could go on, but you get the point. The country needs Katie Porter on this committee. If you agree, please let your representative in the House know.

CFPB Taskforce on Federal Consumer Financial Law Issued its Report

by Jeff Sovern

The report is here. I played hooky from the AALS Financial Serices & Consumer Financial Services program to listen to the Bureau's simultaneous event to release the report (don't tell Rory Van Loo). I haven't read the voluminous report but some comments on the remarks at the event: I learned that when Director Kraninger convened the Taskforce, she identified as one of her principal goals that the Taskforce members reach consensus. That may explain why the members don't appear to be diverse, ideologically or otherwise. It also may explain why the Taskforce wrote in its Small Dollar Credit section that "[I]nterest rate caps should be eliminated entirely" and "States should reconsider, update, or eliminate usury laws as appropriate, recognizing the high costs they impose by denying valuable services to consumers who need them." Volume 2, Recommendations p. 94. Plenty of consumer advocates disagree. The Taskforce members emphasized during the event the importance of competition among financial services providers, which makes it even more ironic that there doesn't seem (at least from the outside) to have been competition from competing views within the Taskforce. Don't get me wrong: I agree that competition among financial service providers is valuable, and I agree with some of the other ideas expressed during the event, such as the call for faster check-clearing. But a Taskforce that better reflected America and its diverse viewpoints, and included consumer advocate members, would have been preferable. For one thing, a consensus reached among a more diverse Taskforce would have more support for consequent changes in the law. And I see nothing wrong with a Taskforce that expresses different perspectives, because the airing of differences helps people to understand different arguments and their relative strength. In any event, I look forward to reading the report; I hope to learn from it; I am curious to see what the Taskforce came up with; and I congratulate its members on the timely production of their report, during a pandemic, no less.

CFPB's Consumer Finance Law Taskforce expected to issue 90-100 recommendations on January 5

by Jeff Sovern

The CFPB has posted to its website an announcement that it will hold an event on January 5 to announce the "findings, analyses, and recommendations" of its Taskforce on Federal Consumer Financial Law. Regular blog readers will recall that the Taskforce is not very diverse in a variety of ways. Earlier this month, the Taskforce came up during a very informative program titled “FinTech and Consumer Finance: Agenda for 2021” held by the Conference on Consumer Finance Law and the Program on Financial Regulation & Technology at George Mason University’s Scalia Law School. Among the speakers was Taskforce member Jean Noonan, a partner at Hudson Cook. Ms. Cook stated during her opening statement (about 46 minutes in) that the Taskforce report, which she said was not quite finished at that point, consisted of two volumes. Volume one will have 13 chapters and volume two will make between 90 and 100 recommendations. She noted that the report will run the gamut from the origins of consumer finance to cutting edge issues to intractable problems like how to give disclosures that are useful to consumers as opposed to disclosures that no one reads. The recommendations will be not only for the Bureau but also for Congress, other federal agencies, and the states. She also said that the Taskforce members intended their recommendations to be "very forward-looking" as opposed to just focusing on the short term. While discussing another topic during her opening statement, Ms. Noonan noted that in discussing that topic, she wanted to be careful not to annoy her auto finance clients. I have no reason to suppose that Ms. Noonan took a similar approach concerning the Taskforce report, but having representatives of the consumer advocacy community on the Taskforce would have gone a long way towards alleviating concerns about the report's balance.

Judge Strikes Down D.C.'s Moratorium on Eviction Filings

Yesterday, a D.C. Superior Court Judge struck down D.C.'s local law moratorium on filing new eviction cases during the COVID-19 pandemic, writing that the eviction filing ban unconstitutionally infringed on landlords' right of access to the courts. The decision strikes down the District's ban on eviction filings, but does not overturn the city's moratorium on actual evictions. The opinion is available here.

Millions of Americans are behind on rent during the COVID-19 pandemic, and many are at risk of being evicted as federal, state, and local eviction bans expires this winter.

Op-Ed: The COVID liability charade: Mitch McConnell’s demand is built on dishonest claims

Here. Excerpt:

One reason there may have been so few consumer lawsuits is that it is difficult to prove exactly where and how a person got COVID, especially during a pandemic. And even in the rare case that a consumer can summon the needed proof, he or she would still have to show that the business did something unreasonable. So by leaving the rules as they are, we can still give businesses an incentive to take reasonable steps to protect their customers and employees while achieving the goal of having few people sue businesses. In other words, existing law gives both sides what they want.

 

Bill to protect people from pandemic economic crisis said to be collapsing over GOP insistence on protection against flood of law suits that doesen't exist

by Jeff Sovern

WaPo's report is here and HuffPo's here. Paul Krugman in the Times writes about how the GOP doesn't see real problems like climate change, but in this case they see a problem that doesn't exist.

UPDATE: The Hill reports here that McConnell has suggested dropping liability protection and state and local funding from the bill.

WaPo reports that the bipartisan pandemic relief bill would insulate businesses that carelessly give consumers COVID from accountability

by Jeff Sovern

Here, though the report on liability is not very detailed and so perhaps it is less bad than I fear. But if not, as I have written in a different context, this is a terrible idea and will lead to more people getting the virus.

Instead of Liability Waivers, Reduce the Spread of Covid-19

by Jeff Sovern

My latest Bloomberg Law Insight piece. Excerpt:

No doubt the same people who want to free businesses of accountability for sickening people would oppose the outlawing of Covid-19 liability waivers as an infringement on liberty. But practically no one reads contracts—not even consumer law professors. And if consumers do read them, they probably can’t understand them. A study I co-authored found that few consumers grasped the meaning of a clause that took away their right to sue in court.

In short, the liberty involved is almost certainly only that of the companies, not the consumers.

Covid-19 cannot be blocked by a signature on a piece of paper. Congress should make sure that the same is true of responsibility for spreading it. Otherwise, we will have lots of legal documents but more people will die of the virus.

Timothy D. Lytton's Op-ed in The Conversation: Business liability shield is holding up another coronavirus bailout – . . . why immunity is unnecessary and even harmful

Here. Excerpt:

As I document in my 2019 book, “Outbreak: Foodborne Illness and the Struggle for Food Safety,” a handful of high-profile lawsuits against food companies have encouraged businesses at every link along the supply chain to improve their safety practices. That’s what happened after lawsuits against Jack in the Box over contaminated hamburgers in 1993 and Dole over E. coli in baby spinach in 2006.

Similarly, the prospect of liability for COVID-19 transmission is likely to encourage business owners to invest in cost-effective precautions, follow the advice of public health authorities, adopt industry safety standards and use common sense.

Congress Should Outlaw Contract Clauses Waiving Liability for Negligently Exposing People to COVID

by Jeff Sovern

That's the title of my post over at the ContractsProf Blog virtual symposium on contracts and COVID. Here's an excerpt: 

The argument behind liability waivers as to normal risks is that people should be able to arrange their private affairs as they wish, but COVID liability waivers are not purely private.  Virus liability waivers are very different from, say, a ski resort’s form disclaiming liability for negligently causing a skier a broken leg. A skier on crutches will not cause others to break their bones. When a business fails to take adequate precautions against infecting its customers with COVID, it increases the likelihood that not only the consumer but also others with whom the consumer comes into contact will be afflicted by the virus. Even if the consumer knowingly signed a waiver form—a dubious proposition that I discuss below--those others did not. Liability disclaimers that protect people in private contractual relationships in which others do not have an interest are a far cry from COVID liability waivers.

I look forward to the forthcoming posts from other contributors to the virtual symposium.