Consumer Law & Policy Blog

House Hearing on Fairness in Consumer Lending and Federal Preemption

    Americans for Fairness in Lending discusses here an important hearing held today before the House Committee on Financial Services.  The topic of the hearing was federal regulation (or the lack thereof) of consumer lending practices and preemption (or not) of relevant state consumer protection law.  Go directly to the Committee's website for full information on today's hearing, including testimony from federal and state regulators.

Paul Bland's Testimony on Mandatory Binding Arbitration

Just down the page, Deepak told you about today's congressional hearing on mandatory binding arbitration clauses in take-it-or-leave-it consumer contracts.  Deepak noted that Paul Bland testified on the topic, prompting me to read Paul's testimony.  It's so darn good that I am posting it here.  Read it.

House Judiciary Hearing on Arbitration This Morning

This morning, starting at 10:30am, the House Judiciary Committee's Subcommitee on Commercial and Administrative Law will hold a hearing entitled Mandatory Binding Arbitration Agreements: Are They Fair for Consumers? This hearing isn't tied to any specific legislative proposals, but it signals the increasing interest in this important issue on Capitol Hill.

The lineup is three pro-consumer witnesses and one corporate defense lawyer: our co-blogger Paul Bland of Public Justice, who has been leading the fight against BMA in the courts; Jordan Fogal, a consumer with an arbitration horror story; David Schwartz, a law professor at the University of Wisconsin, who will be criticizing the Supreme Court's Federal Arbitration Act jurisprudence as inconsistent with the original Congressional intent; and Mark Levin, a partner at the same Philadelphia law firm as mandatory arbitration's architect-in-chief, Alan Kaplinsky.

You can watch a live video webcast of the hearing and read written testimony at this link.

House Committee to Examine Preemption & the Future of Consumer Protection

Rep. Barney Frank (D-MA), Chairman of the House Committee on Financial Services, has announced that the committee will hear from federal and state regulators on the future of federal consumer protection in the financial services sector.  The hearing entitled, Improving Federal Consumer Protection in Financial Services, will take place on Wednesday, June 13, 2007, at 10:00 a.m. in room 2128 of the Rayburn House Office Building.

The hearing will examine consumer protection in the financial services sector in light of regulatory and judicial decisions over the past several years that have preempted state consumer protection laws for federally chartered institutions, and thereby reduced the role of state officials in policymaking, complaint resolution and enforcement.  The hearing will seek ideas for improving consumer protection given these recent changes. The Committee will focus on the adequacy of current federal consumer protection rules (including agencies' use of authority against unfair and deceptive financial trade practices), the effectiveness of existing consumer complaint resolution mechanisms, improvements that may be needed in both of these areas, and the future role of state agencies in protecting financial consumers.

Credit Card Hearing Now Underway

The House Financial Services Commitee's hearing on Improving Credit Card Consumer Protection: Recent Industry and Regulatory Initiatives started half an hour ago.  You can watch it live at this link.  Among a panel packed with industry representatives, there are only two people representing consumer interests:  Kathleen Keest of the Center for Responsible Lending and Ed Mierzwinski of U.S. Pirg.

NHTSA's Safety Recalls for May 2007

The National Highway Traffic Safety Administration has just released its May 2007 vehicle safety recall report.  As previously noted, the CL&P Blog has begun to post monthly recall reports from both NHTSA and the Consumer Product Safety Commission.

Fed Proposes Amendments to Regulation Z for Credit Card Accounts

by Brian Wolfman

On May 23, the Federal Reserve Board proposed revisions to Regulation Z regarding disclosures of the cost of credit for credit card accounts (sometimes referred to as "open-end" credit).  Regulation Z implements the federal Truth in Lending Act (TILA).  This effort represents the first comprehensive overhaul of Regulation Z since 1981.  Most of the proposed changes are non-substantive and concern, as does most of TILA, the type and manner of credit disclosures.  One arguably more substantive proposal would require creditors to give borrowers 45 days' notice when terms of the account are changed.  (Currently, only 15 days' notice is required.)

The Fed's proposal and a range of related documents are available here on the Fed's website.  Comments are due within 120 days of the date that the proposal is published in the Federal Register.  Publication should occur shortly.  (It is possible that the proposal has been published already, but I could not a Federal Register version.)

CPSC Recalls for May 2007

The Consumer Product Safety Commission's recalls and product safety news for May 2007 can be found here.  By checking out this page, you can learn about products that pose safety hazards to consumers and, where applicable, how to obtain product fixes, replacements, and refunds. 

New CL&P Feature: Monthly CPSC and NHTSA Recalls

   

The Consumer Law & Policy Blog will begin posting monthly product recall information from the Consumer Product Safety Commission and the National Highway Traffic Safety Administration.  The CPSC recalls concern a variety of consumer products and the NHTSA recalls concern motor vehicles.  We will link to the agencies' monthly recall lists for the prior month. 

    Meanwhile, acquaint yourself with the CPSC recall home page and the NHTSA recall home page.  The latter page allows consumers to track agency vehicle defect investigations and a range of other agency safety initiatives as well as vehicle recalls.

    CPSC's list of April 2007 recalls can be assessed here.  NHTSA's list of April 2007 vehicle recalls can be assessed here. We will be back soon to report on the May recalls for both agencies.

Credit Card Debt in the U.S.: An Ill-Fated Love Affair

By Brian Wolfman

Today's Washington Post contains a major article by Kathleen Day, entitled "A Highly Charged Relationship," about Americans' love for credit cards, but their vehement dislike for some of the credit card companies' practices -- practices hidden in the fine print until they spring into action.  As Day puts it, "Call it a love affair with a dark side."  Consumer complaints to federal banking regulators are about credit card companies more often than anything else.  The third paragraph of the article gives you a sense of what the article is about:

The avalanche of gripes generally boils down to objections about a half-dozen practices, according to congressional staff and consumer groups. The complaints mostly center on what consumers see as unfairly high interest rates and penalty fees; confusing policies that constantly change, almost always in the lender's favor; and near-insurmountable hurdles to getting help when a consumer falls into trouble or when a company makes a billing mistake.

After the main article, the Post includes a series of vignettes -- under the title "Mad About Credit Card Companies" -- featuring real consumers who felt victimized by various credit card practices.  Read about "over limit" fees and penalties; interest charges on the whole debt even when part of it has been paid; flat-out company billing errors (in the case discussed, Capital One harassed a dad mourning the death of a son who had left a debt of $217 -- Capital One erroneously insisted that the debt was more than 6 times greater); refusal to work with credit counselors who are trying to help the card holder; "workout plans" that don't reduce the consumer's debt; and "due dates" on days when it is literally or effectively impossible to make payment (here, the consumer paid in person at the bank on Saturday, in advance of the Sunday due date -- a date on which it was impossible to pay -- but since Saturday payments are not credited until the next business day, the consumer got hit with a late charge).