2011 Spring Symposium Resources: Panel Three - Consumer Protection

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A Bank Lawyer's Perspective on Dodd-Frank's 'Abusive' Standard

John D. Wright, Wells Fargo & Company

Dodd-Frank creates the Bureau of Consumer Financial Protection and gives the Bureau broad power to take enforcement action to prevent a bank or other covered entity from engaging in an unfair, deceptive or abusive act or practice in connection with offering a consumer financial product or service, or a transaction with a consumer for such a product or service. While there are well-known standards in federal consumer law for determining whether acts or practices are “unfair” or “deceptive,” the concept of “abusive” acts or practices is not as well developed and there is considerable uncertainty about how the Bureau will exercise its consumer protection duties. To view a downloadable and complete abstract for John D. Wright, follow this link

     John D. Wright - Dodd-Frank's “Abusive” Standard: A Call for Certainty
     Douglas J. Elliott and Robert E. Litan - Identifying and Regulating Systemically Important Financial Institutions

Ability to Pay

John A.E. Pottow, University of Michigan, School of Law

The landmark Dodd-Frank Act of 2010 transforms the landscape of consumer credit in the United States. Many of the changes have been high-profile and accordingly attracted considerable media and scholarly attention, most notably the establishment of the Consumer Financial Protection Agency/Bureau. Even specific consumer proposals, such as the “Plain Vanilla,” drew hot debate and lobbying firepower. But when the dust settled, one profoundly transformative innovation that did not garner the same outrage as Plain Vanilla and CFPA did get into the law: imposing upon lenders a duty to assure borrowers’ ability to repay. As will be discussed below, assuring a borrower’s ability to repay is not an unprecedented legal concept, even though its wholesale embrace by Dodd-Frank represents a sea change in U.S. consumer credit market regulation. This article does three things. First, it tracks the multifaceted pedigree of this duty to assess “ability to pay,” looking at fledgling strands in consumer law as well as other arenas such as securities law; it compares too its more robust embrace in foreign systems. Second, it offers conjecture regarding just how this broadly stated principle might be put into practice by the federal regulators. Finally, it provides a brief normative comment, siding with the supporters of this new obligation on lenders.To view a downloadable and complete abstract for John A.E. Pottow, follow this link.

     John A.E. Pottow - Ability to Pay

Who's Afraid of 'Abusive' Practices?

Thomas P. Brown, O’Melveny & Myers, LLP

The Consumer Financial Protection Bureau is the centerpiece of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Most of the attention paid to the soon to be launched Bureau has revolved around (1) who will head the Bureau and (2) what the Bureau will do with its power to ban "abusive" practices. This article suggests that consumers and financial institutions should be focused on the Bureau's power to regulate how financial services are disclosed to consumers. If fully exploited, the new power would allow the Bureau to reshape the industry. To view a downloadable and complete abstract for Thomas P. Brown, follow this link.

     Thomas P. Brown - Who's Afraid of 'Abusive' Practices?

Consumer Financial Protection Bureau and What It Can Do

Gail Hillebrand, Consumers Union

Ms. Hillebrand will focus on Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act. She will describe the statutory design of the new Consumer Financial Protection Bureau (CFPB) and the types of financial products, services, and providers under the jurisdiction of the CFPB. She will describe the powers and obligations of the CFPB conferred by the new law; the role of the CFPB in bank and non-bank supervision and enforcement; and the transfer of authorities under certain existing federal consumer financial protection statutes.To view a downloadable and complete abstract for Gail Hillebrand, follow this link.

     Gail Hillebrand PowerPoint Slides
     Consumers Financial Protection Bureau Fact Sheet, Consumers Union
     Faces of Foreclosure mortgage videos and other videos posted by Consumers Union
     Modernizing Bank Supervision and Regulation
     The Proposed Consumer Financial Protection Agency
     Protecting Our Wallets 
     The Role of the States Under the Wall Street Reform and Consumer Protection Act of 2010     
     Special Double Issue on the Dodd-Frank Financial Reform Bill, NCLC Reports, Deceptive Practices and Warranties Edition