Law Commons^™

How The Payday Predator Hides Among Us: The Predatory Nature Of The Payday Loan Industry And Its Use Of Consumer Arbitration To Further Discriminatory Lending Practices, Michael A. Satz

Michael A Satz

This Article argues that Payday lending is a predatory lending practice that disproportionately targets minority customers, and that the Payday lending industry utilizes consumer arbitration agreements to further the industry’s discriminatory lending practices. The Article proposes that protections enacted into law to protect military service members from payday lenders should be universally enacted on a national level.

The Mortgage Market Crisis: A Game Theory Analysis, Raquel Mato

Raquel Mato

The mortgage market experienced a global bubble during the early 2000s. The bubble burst in 2006, creating a global financial crisis with widespread repercussions. In this paper, I will discuss how the mortgage market normally works and what changes occurred leading up to the 2000s that allowed for the rapid expansion of the mortgage market. I will talk about contributing factors such as: deregulation of the market, government encouragement of homeownership, the mortgage backed securities market, existing legislation, and a general lack of responsibility by all parties involved. I will use various aspects of game theory to explain how this …

Heart Pills Are Red, Viagra Is Blue… When Does Pill Color Become Functional? An Analysis Of Utilitarian And Aesthetic Functionality And Their Unintended Side Effects In The Pharmaceutical Industry, Signe H. Naeve

Signe H. Naeve

Abstract: As consumers we often associate pill color and shape with particular medications. Should that trade dress be protected beyond the expiration of the patent? Legal scholars have recognized some of the tensions and inconsistencies in court opinions when it comes to trade dress protection for pill shape and color. This article focuses on the specific tensions between requiring secondary meaning and non-functionality, as well as the potential of “genericide” when generic pharmaceuticals enter the market. Ultimately this article makes some novel recommendations to assess functionality at the time of FDA approval for the pharmaceutical and to have the FDA …

The Rise In Elder Bankruptcy Filings And Failure Of U.S. Bankruptcy Law, John A. E. Pottow

Law & Economics Working Papers

Recent empirical legal scholarship on the consumer bankruptcy system has uncovered a marked rise in the proportion of elder Americans filing for relief under the Bankruptcy Code. But these studies have not probed the reasons behind that rise, an omission this Article seeks to address. Professor John Pottow and colleagues recently assembled the new dataset of the Consumer Bankruptcy Project (CBP), the largest national sample of consumer debtors in this country, which he uses to explore the sources of elder bankruptcy. The findings are both striking and ominous. While multiple factors, such as health problems and medical debts, contribute to …

“A Psychological Investigation Of Consumer Vulnerability To Fraud: Legal And Policy Implications”, Debra P. Stark, Jessica M. Choplin

Debra Pogrund Stark

This article focuses on a type of consumer fraud that is particularly problematic because it may not be actionable in some jurisdictions, namely the problem of consumer vulnerability to deception when a consumer notices a problematic term in a contract but is persuaded through deception to proceed with the deal anyhow. Two fraud simulation studies and a follow-up survey demonstrated how this type of fraud operates, found that consumers with certain vulnerability characteristics such as having lower socio-economic status are more susceptible to this type of fraud, and explored some of the psychological reasons why consumers are vulnerable to it …

Non- Profit Charitable Tax Exempt Hospitals- Wolves In Sheep's Clothing:To Increase Fairness And Enhance Compition All Hospitals Should Be For Profit And Taxable, George A. Nation Iii

George A Nation III

Most hospitals in the United States are not-for-profit tax exempt institutions. Legally these hospitals are deemed to be charities and are exempt from federal, state and local taxes, raise money through tax exempt bond offerings and receive charitable contributions that are tax deductible to the donors. Today it is estimated that 47 million Americans lack access to healthcare.5A Moreover, even when the new Patient Protection and Affordable Care Act5B is fully operational, which is estimated to be around 2019, there will still be millions of Americans without health insurance and thus without reliable access to healthcare.5C Notwithstanding the millions of …

Insulating Agencies: Avoiding Capture Through Institutional Design, Rachel E. Barkow

Rachel E Barkow

So-called independent agencies are created for a reason, and often that reason is a concern with agency capture. Agency designers hope that a more insulated agency will better protect the general public interest against interest group pressure. But the conventional approach to independent agencies in administrative law largely ignores why agencies are insulated. Instead, discussions about independent agencies in administrative law have focused on three features that have defined independent agencies: whether their heads are removable at will or for cause by the President, whether they must submit regulations to the President’s Office of Information and Regulatory Affairs for cost-benefit …

Lessons In Price Stability From The U.S. Real Estate Market Collapse, Andrea J. Boyack

Andrea J Boyack

The U.S. residential housing market collapse illustrates the consequences of ignoring risk while funding mortgage borrowing. Collateral over-valuation was a foundational piece of the crisis. Over the past few decades, secondary markets, securitization, policy and psychology increased the flow of funds into real estate. At the same time, financial market segmentation divorced risk from reward. Increased mortgage capital availability, unmitigated by proper risk allocation, led to real estate price inflation. Social trends and government policies exacerbated both the mortgage capital over-supply and the risk-valuation disconnect.

The Dodd-Frank Act inadequately addresses the underlying asset valuation problem. Federal regulation may support market …

Relational Integrity Regulation: Nudging Consumers Toward Products Bearing Valid Environmental Marketing Claims, Jeffrey J. Minneti

Jeffrey J Minneti

Over the last two decades scholars have addressed attributes of effective environmental regulation and advocated a wide spectrum of regulatory approaches, from the traditional command-and-control model to a libertarian-paternalism approach. Some writers have used those approaches to advocate for modifications to the Green Guides. This article joins that conversation and accomplishes two goals. First, it harmonizes environmental regulation scholarship, resulting in the creation of a new form of regulation that it terms “Relational Integrity” regulation. Second, in light of the Relational Integrity approach to regulation, the article examines public and private environmental claim regulatory schemes and suggests how those schemes …

Consumer Protection Initiatives In The Eu Mortgage Market: A Behavioral Economics Based Critique And Proposal, Debra P. Stark, Jessica M. Choplin

Debra Pogrund Stark

This article critiques the Commission of the European Union's recent consumer protection initiatives for the EU mortgage market focusing on the revised form of disclosures that the Commission appears poised to mandate in a Directive, providing suggested reforms to this form to make it more effective and proposing four additional consumer protections to empower EU consumers to make wise home loan decisions. The article argues that these additional consumer protections are a necessary condtion to creating the integrated EU mortgage market (with more cross border home loans) that the Commission desires.

The Law And Policy Of Online Privacy: Regulation, Self-Regulation Or Co-Regulation?, Dennis D. Hirsch

Dennis D Hirsch

The Internet poses grave new threats to information privacy. Search engines collect and store our search queries; Web sites track our online activity and then sell this information to others; and Internet Search Providers read the very packets of information through which we interact with the Internet. Yet the debate over how best to address this problem has ground to a halt, stuck between those who call for a vigorous legislative response and those who advocate for market solutions and self-regulation. In 1995, the European Union member states began to build a third approach into their data protection laws, one …

From The Schoolhouse To The Poorhouse: The Credit Card Act's Failure To Adequately Protect Gen Y Consumers, Eboni Nelson

Eboni S Nelson

Whether through personal experiences or through the experiences of our friends and family, most, if not all, of us are all too familiar with the credit card industry’s unrelenting attempts to saddle young, naïve college students with debt that they cannot afford to repay. Students thoughtlessly apply for and use credit cards without considering the negative effects credit card debt can have on their academic, personal, and financial wellbeing. In May 2009, Congress attempted to address the pervasive problem of young consumer indebtedness by passing the Credit Card Accountability Responsibility and Disclosure Act of 2009. While this Article recognizes and …

Running The Gamut From A To B: Federal Trademark And False Advertising Law, Rebecca Tushnet

Rebecca Tushnet

The Lanham Act bars both trademark infringement and false advertising, in nearly identical and often overlapping language. In some circumstances, courts have interpreted the two provisions in the same way, but in other areas there has been significant doctrinal divergence, often to the detriment of the law. This Article argues that each branch of the Lanham Act has important lessons to offer the other. Courts should rationalize their treatment of implied claims, whether of sponsorship or of other facts; they should impose a materiality requirement, such that the only unlawful claims are those that actually matter to consumers, to trademark …

Take This House And Shove It: The Emotional Drivers Of Strategic Default, Brent T. White

Brent T. White

An increasingly influential view is that strategic defaulters make a rational choice to default because they have substantial negative equity. This article, which is based upon the personal accounts of over 350 individuals, argues that this depiction of strategic defaulters as rational actors is woefully incomplete. Negative equity alone does not drive many strategic defaulters’ decisions to intentionally stop paying their mortgages. Rather, their decisions to default are driven primarily by emotion – typically anxiety and hopelessness about their financial futures and anger at their lenders’ and the government’s unwillingness to help. If the government and the mortgage industry wish …

Information Defects In The Age Of Information: When More Is Less, Edward C. Combs Jr.

Edward C Combs Jr.

Warning labels from product manufacturers serve both as a shield to the consumer from physical injury and as a safeguard to the manufacturer from civil liability. A question then arises whether these two distinct interests, that of the manufacturer and of the consumer, are equally protected by our current products liability jurisprudence. Another way to approach this question is by asking when is a product deemed “safe”? Is it determined by an assessment of the totality of injuries associated with its use or do we arrive at the premise that a product is “safe” when a court finds no liability …

Comment On Enterprise Duty To Serve Underserved Markets, David J. Reiss

David J Reiss

FHFA invited further comment on the merit of considering properties without affordable use restrictions as part of the Enterprises’ duty to serve, noting that affordable housing preservation “encompasses efforts to keep unsubsidized properties in good condition while maintaining affordability for low- and moderate-income households.” (Page 32102)

FHFA should be certain that any aid given to buildings without affordable use restrictions will actually be passed on in large part to their tenants, whether through lower rents or improved conditions. I question whether that is in fact the case.

There are two main rationales for subsidizing multifamily buildings without affordable use restrictions. …

How The Global Crime Syndicates Fuel Planet Destruction, Global Alliance

Global Alliance

since 1945 more environmental planet destruction has been fuelled and financed with ever more leveraged debt than in the previous 60 million years - it's applied terrorism against the global life support system under the protection racket of a corrupt law profession

The Boundaries Of Privacy Harm, M. Ryan Calo

M. Ryan Calo

Just as a burn is an injury caused by heat, so is privacy harm a unique injury with specific boundaries and characteristics. This Essay describes privacy harm as falling into two related categories. The subjective category of privacy harm is the unwanted perception of observation. This category describes unwelcome mental states—anxiety, embarrassment, fear—that stem from the belief that one is being watched or monitored. Examples include everything from a landlord listening in on his tenants to generalized government surveillance.

The objective category of privacy harm is the unanticipated or coerced use of information concerning a person against that person. These …

Putting The Gene Back In The Bottle: Why California Needs Stronger Protection Of Genetic Privacy In The Wake Of Affordable Dna Testing, Farid Zakaria

Farid Zakaria

In recent years, many “direct-to-consumer” genetic testing companies have started offering a DNA analysis service to the public. Based on the analysis of the DNA contained in saliva, these companies are able to inform the customer about his or her likelihood of having certain traits and of developing a number of diseases. Given the sensitive nature of this kind of information, this paper considers whether it is sufficiently protected under the current legal and regulatory framework. Specifically, the paper studies whether current federal, state, and common law that protects medical and private information also guarantees the privacy of genetic information. …

“Supplementing” The Dshea: Congress Must Invest The Fda With Greater Regulatory Authority Over Nutraceutical Manufacturers By Amending The Dietary Supplement Health And Education Act. 98 Cal. L. Rev. 493., Rahi Azizi

Rahi Azizi

ABSTRACT This paper addresses serious deficiencies in the Dietary Supplement Health and Education Act, or "DSHEA." In it, I argue that the DSHEA (a federal statute passed by Congress in 1994, superseding the Food Drug and Cosmetics Act as the applicable law governing the sale of nutraceutical products) gives impermissible latitude to manufacturers of dietary supplements by allowing them to sell products without establishing whether they are safe or effective. The DSHEA also allows manufacturers to employ unsubstantiated and misleading labeling claims in marketing their products. I assert that the DSHEA promotes deceptive labeling practices. I also suggest that the …

Distributed Renewable Generation: The Trifecta Of Energy Solutions To Curb Carbon Emissions, Reduce Pollutants And Empower Ratepayers, Shannon M. Baker-Branstetter

Shannon M Baker-Branstetter

On-site construction of renewable power generation provides numerous environmental and economic benefits. Renewable resources’ advantages over fossil fuels include dramatically lower life-cycle carbon emissions, minimal air and water pollution, domestic energy security, and energy price stability. However, two major hurdles for developing renewable resources for electricity generation are the cost and administrative burdens of transmission expansion to bridge the distance between the location of where renewable resources are located and where electricity is needed. Distributed renewable generation (DRG) is generation produced on-site or nearby to where the electricity is consumed. DRG reduces the need for new transmission lines to accommodate …

Improving The Safety Of Central Nervous System Stimulants, Anne Kulli

Anne Kulli

No abstract provided.

How Incentives Drove The Subprime Crisis, Charles W. Murdock

Charles W. Murdock

How Incentives Drove the Subprime Crisis

In order to address any systemic problem, whether the goal is to change the system, regulate the system, or change the incentives driving a system, it is necessary to appreciate all the drivers operating within the system. In the case of the subprime crisis, one of the drivers was the changing nature of the subprime loans, which was not factored into the models used by the investment bankers, the credit rating agencies, and the issuers of credit default swaps.

This paper is an attempt to look dispassionately at the subprime crisis from a particular …

Renters Evicted En Masse: Collateral Damage Arising From The Subprime Foreclosure Crisis, Creola Johnson

Creola Johnson

ABSTRACT: America is experiencing its worst foreclosure crisis in history, and tenants are the silent victims of this crisis. In this Article, Professor Johnson describes the consequences of thousands of tenants of being evicted from residential properties obtained by lenders in foreclosure proceedings against the owners-landlords. The individual consequences include tenants’ renting substandard alternative housing, experiencing disruptions in family life, and even becoming homeless. Societal consequences include the costs imposed upon communities to provide social services to the evicted tenants and their families and the burden on cities in dealing with homes left vacant due to the lenders' inability to …

Renters Evicted En Masse: Collateral Damage Arising From The Subprime Foreclosure Crisis, Creola Johnson

Creola Johnson

ABSTRACT: America is experiencing its worst foreclosure crisis in history, and tenants are the silent victims of this crisis. In this Article, Professor Johnson describes the consequences of thousands of tenants of being evicted from residential properties obtained by lenders in foreclosure proceedings against the owners-landlords. The individual consequences include tenants’ renting substandard alternative housing, experiencing disruptions in family life, and even becoming homeless. Societal consequences include the costs imposed upon communities to provide social services to the evicted tenants and their families and the burden on cities in dealing with homes left vacant due to the lenders' inability to …

Corporate Social Responsibility After Citizens United, David G. Yosifon

David G. Yosifon

The Supreme Court recently held in Citizens United v. Federal Elections Commission (2010) that the First Amendment forbids Congress from restricting the political speech of corporations. While corporate theory did very little to inform the Court’s thinking in Citizens United, this article argues that the holding in Citizens United requires us to rethink corporate theory. Specifically, this article demonstrates that the shareholder primacy norm in American corporate governance relies on the assumption that corporations can be restrained from influencing external governmental operations. We can enjoy the efficiencies generated by shareholder primacy, mainstream corporate theorists have long argued, because we can …

The Credit Repair Organizations Act: The Sleeping Giant, Justin Smith

Justin T Smith

Congress created the Credit Repair Organizations Act (CROA) to protect consumers from unscrupulous providers of credit repair. In the fifteen years since it was enacted, problems have arisen in its application as many of the key provisions of CROA were left undefined and what little case law that has developed has yet to form a coherent understanding of how CROA is to be read. This lack of predictability makes CROA an ineffective piece of legislation in that parties are unable to properly modify their behavior since they are not operating on known terms.

Just as CROA has been neglected by …

Consumer Use And Government Regulation Of Title Pledge Lending, Todd J. Zywicki

Todd J. Zywicki

Recent years have seen growth in the use of certain types of nontraditional lending products, such as payday lending and auto title lending, and a relative decline of others, such as finance companies and pawnbrokers. Congress is currently considering major new regulations on short-term lending products, such as title lending, that could produce their demise—even though there is no evidence that such products were related in any way to the financial crisis.

This study examines the question of who uses title pledge lending and why. The results are surprising. I find that title pledge lending is used predominantly by three …

How Incentives Drove The Subprime Crisis, Charles W. Murdock

Charles W. Murdock

In order to address any systemic problem, whether the goal is to change the system, o regulate the system, or change the incentives driving a system, it is necessary to appreciate all the drivers operating within the system. In the case of the subprime crisis, one of the drivers was the changing nature of the subprime loans, which was not factored into the models used by the investment bankers, the credit rating agencies, and the issuers of credit default swaps.

This paper is an attempt to look dispassionately at the subprime crisis from a particular perspective, namely, the incentives that …

On The Optimal Regulation Of Unread Contracts, Alon Harel

Alon Harel

Most contracts in which we engage in the marketplace, we do not care to read. Consequently, a classic question arising in the law of contracts is whether, and to what extent, the content of such agreements ought to be subject to special scrutiny of courts, regulators or legislatures. This paper, accordingly, develops an economic theory of the optimal regulation of unread contracts.

Under a prevalent view, when contract drafters are repeat players, there is little need for regulatory intervention, as the drafters' concern for their reputation serves a disciplinary function, which guarantees the efficiency of the drafted terms. Alternatively it …