Law Commons^™

Sacred Cows, Holy Wars, Kenneth Lasson

Kenneth Lasson

ED COWS, HOLY WARS Exploring the Limits of Law in the Regulation of Raw Milk and Kosher Meat By Kenneth Lasson Abstract In a free society law and religion seldom coincide comfortably, tending instead to reflect the inherent tension that often resides between the two. This is nowhere more apparent than in America, where the underlying principle upon which the first freedom enunciated by the Constitution’s Bill of Rights is based ‒ the separation of church and state – is conceptually at odds with the pragmatic compromises that may be reached. But our adherence to the primacy of individual rights …

Eminently Reasonable, David J. Reiss

David J Reiss

Local governments across the country are considering an innovative use of eminent domain. They propose to condemn underwater mortgages (those that exceed the fair-market value of the home) in their communities and restructure them so that home­owners can afford their payments and so that the new mortgage is for less than the fair market value of the property. If this proposal is implemented, the local government will pay the owner of mortgages of "underwater" homes the fair market value for the mortgages. The local government will then restructure each mortgage by reducing the principal amount owed to be in line …

"Ineffective In Any Form: Confirmation Biases And Other Psychological Phenomena Undermine Improved Home Loan Disclosures", Debra P. Stark, Jessica M. Choplin

Debra Pogrund Stark

This article reports three eye-tracking experiments funded by the National Science Foundation that investigated the limitations of home-loan disclosure forms as a means of protecting consumers from imprudent or otherwise unsuitable home loans. These experiments found that presenting misleading information (such as “your interest rate is at 4%” when in fact that interest rate can rise to 8% over the life of the loan) can cause consumers to exhibit confirmation biases wherein they inappropriately skim the form to confirm the misleading information (a rate of 4%), and ignore information that would disconfirm those beliefs (that the rate can rise). These …

Dysfunctional Contracts And The Laws And Practices That Enable Them: An Empirical Analysis, Debra P. Stark, Jessica M. Choplin

Debra Pogrund Stark

The main function of entering into a contract is for both parties to be bound through being exposed to negative consequences if they breach. A review of purchase agreement forms used by condominium developers in Chicago, Illinois discovered that 79% eliminate the negative consequences for sellers by providing for highly one-sided remedies wherein the buyer’s sole remedy in the event of the seller’s breach was the return of the buyer’s own earnest money while reserving significant remedies to the developer in the event of the buyer’s default. Courts in many jurisdictions have refused to strike down this type of limitation …

Transparently Opaque: Understanding The Lack Of Transparency In Insurance Consumer Protection, Daniel Schwarcz

Daniel Benjamin Schwarcz

Consumer protection in most domains of financial regulation centers on transparency. Broadly construed, transparency involves making relevant information available to consumers as well as others who might act on their behalf, such as academics, journalists, newspapers, consumer organizations or other market watchdogs. By contrast, command and control regulation that affirmatively limits financial firms’ products or pricing is relatively uncommon in financial regulation. This Article describes a remarkable inversion of this pattern: while state insurance regulation frequently employs aggressive command and control consumer protection regulation, it typically does little or nothing to promote transparent markets. Rather, state lawmakers routinely either completely …

Consumers: The (Still) Missing Piece In A Piecemeal Approach To Privacy, Clark Asay

Clark Asay

U.S. consumers have little actual control over how companies collect, use, and disclose their personal information. This paper identifies two specific instances of this lack of control under U.S. law related to third-party disclosures, what I call the Incognito and Onward Transfer Problems. It then identifies the types of privacy harms that result and examines the advantages and possible drawbacks of a model law aimed at addressing these specific problems. The model law is based on a system of consumer notice and choice, the predominant method used in the U.S. to provide consumers with control over their information. Up until …

Adr’S Place In Foreclosure: Remedying The Flaws Of A Securitized Housing Market, Lydia Nussbaum

Lydia R. Nussbaum

Millions of Americans lost their homes during the foreclosure crisis, an unprecedented disaster still plaguing local and national economies. A primary factor contributing to the crisis has been the failure of conventional foreclosure procedures to account for the new realities of securitization and the secondary mortgage market, which transformed the traditional borrower-lender relationship. To compensate for the shortcomings of conventional foreclosure procedures and stem the tide of residential foreclosure, state and local governments turned to ADR processes for a solution. Some foreclosure ADR programs, however, have greater potential to avoid unnecessary foreclosures than others. This article comprehensively examines the key …

Adr's Place In Foreclosure: Remedying The Flaws Of A Securitized Housing Market, Lydia Nussbaum

Lydia R. Nussbaum

Millions of Americans lost their homes during the foreclosure crisis, an unprecedented disaster still plaguing local and national economies. A primary factor contributing to the crisis has been the failure of conventional foreclosure procedures to account for the new realities of securitization and the secondary mortgage market, which transformed the traditional borrower-lender relationship. To compensate for the shortcomings of conventional foreclosure procedures and stem the tide of residential foreclosure, state and local governments turned to ADR processes for a solution. Some foreclosure ADR programs, however, have greater potential to avoid unnecessary foreclosures than others. This article comprehensively examines the key …

The Consumer Financial Protection Bureau: Financial Regulation For The 21st Century

Patricia A. McCoy

After existing regulatory systems failed to prevent the recent financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, a sweeping reform designed to alleviate the crisis and prevent its recurrence. Out of this Act, the Consumer Financial Protection Bureau was born. This new agency is charged with making markets for consumer financial products and services work for Americans, a task that was previously spread out among seven different federal agencies with varying priorities. This Article describes, with a series of concrete case studies, four key principles that have guided the Bureau as it strives to fulfill …

Federal Preemption And Consumer Financial Protection: Past And Future

Patricia A. McCoy

Starting in 1995 and throughout the subprime boom during the next decade, Congress failed to take action to curb predatory mortgage lending. Many states and cities filled the void by passing anti-predatory lending laws of their own. Lenders, worried about potential liability, quickly organized a full-scale attack on the state and local initiatives. Their most potent strategy lay in challenging the laws and ordinances under federal preemption rules for national banks and federal savings associations that precluded states from enforcing their anti-predatory lending laws.

The Dodd-Frank Act curtailed the preemption rules by establishing that state consumer financial laws can only …

Formulating A Soda Tax Fit For Consumption: A Pragmatic Approach To Implementing The Failed New York Soda Tax., Joseph Desantis

Joseph Angelo DeSantis

Previous attempts to levy a one-cent per-ounce tax on sodas, or sugar-sweetened beverages (SSB), have failed because they are modeled after a sin tax. This article proposes a different approach. An SSB tax should have two limited aims: (1) avoid implicitly demonizing soda consumption and (2) offset the cost of treating diseases attributed to SSB consumption. To these ends, this article explores using the basic principles of insurance to offset costs associated with risky behavior, without implicitly condemning that behavior. It further explores the link between SSB consumption and direct health costs to estimate a proper offset. Finally, this article …

"Should I Stay Or Should I Go: Promoting The Sustainability And Suitability Of Reverse Mortgages", Debra P. Stark, Jessica M. Choplin

Debra Pogrund Stark

No abstract provided.

Hamp: Doomed From The Start, Marc Gans

Marc Gans

This paper will critique the effectiveness of the government's Home Affordable Mortgage Program (HAMP) and its companion programs, and dissect what went wrong. This will include an analysis of strategic defaults, securitization, legal liability, proposed solutions and conclude with what I think should have been done from the start.

Public Engagement In Rulemaking: The Consumer Financial Protection Bureau’S New Approach

Patricia A. McCoy

No abstract provided.