By Alvin C. Harrell* · By Alvin C. Harrell* The 2010 Program featured both scheduled and...

Journal of Consumer & Commercial Law 87

Teaching

Part Five

ConsumerLaw

By Alvin C. Harrell*

The 2010 Program featured both scheduled and im-promptu comments on the causes, effects, and possible solutions to current problems in the mortgage and other credit markets.

I. Introduction Withimpeccabletiming,inthemidstofperhapsthe greatest-ever turmoil in American credit marketsandconsumerprotectionlaw,onMay21-22,2010theUniversity of Houston and its Center for ConsumerLaw(incooperationwith theNationalAssociationofConsumerAdvocates(NACA)andwiththesupportofthe Houston law firm of Moriarty Leyendicker, P.C.)presenteditsfifthbiannualprogramonTeachingCon-sumerLaw(the2010Program).1

88 Journal of Consumer & Commercial Law

Whilethemassivechangesunderwayintheconsumerfinancefieldwere,inasense,the800poundgorillaintheroom(which could not be ignored), and the 2010 Program featuredbothscheduledandimpromptucommentsonthecauses,effects,andpossiblesolutionstocurrentproblemsinthemortgageandothercreditmarkets,aswiththepriorprogramsinthisseriesthefocusofthe2010Programwasteachingconsumerlaw.Inyourauthor’sexperience,itisverydifficulttomaintainthefocus,direc-tionandqualityofaprogramserieslikethisoneoveraperiodthatnowapproachesa fulldecade.2ThattheUniversityofHoustonLawCenteranditsCenterforConsumerLawhavebeenabletodoso,under the leadershipof itsDirector,AssociateDeanandConferenceChairRichardAlderman, isa singularachievementthatmarksauniquecontributiontothedevelopmentandteach-ingofconsumerlaw.3 Thisisnottosuggestthatthe2010Program,anymorethan the previous ones, was a love-fest of consensus on any ofthesematters.4Quite thecontrary, asusualandespeciallyas topolicy issues, as this article will attest, the disagreements weremanifest;afterall,theparticipantsareinlargemeasuretriallaw-yers,consumeradvocates,andacademics.Anyonewhohasprac-ticed consumer law, or attended a law school faculty meeting,probablyknowswhatthismeans--thisisnotexactlyaprofessionknownforitsreticence. Butit iscleartoyourauthorthatDeanAldermanhaslaboredmightily tomaintain theacademic focus,diversity,andquality of these programs, and his success in doing so was es-sentialtotheuniquenatureofthe2010Programanditsvaluetotheteachingprofession.HeandtheUniversityofHoustonLawCenteraretobecongratulatedontheseeffortsandresults. Asusual,thisreportlargelyreflectsyourauthor’spercep-tions regarding the2010Programpresentations;yourauthor isresponsibleforanyerrors,andthesecommentsshouldnotbeat-tributedtoanyotherpersonabsentdirectconfirmation.Yetatthesametimethisarticleisinsignificantmeasureajointeffortofthe2010Programparticipants.Yourauthorappreciatestheassistanceofallofthosewhoreviewedandcontributedtothisarticle(whichincludesmostallofthosenamedthroughoutthistext).

II. The Consumer Debt/Credit Crisis A. Welcome and Introductions Dean Alderman commenced the 2010 Program withopening remarks and a welcome to the participants, includingbriefcommentsdescribingthehistory,focusandscopeofthePro-gram.HethenturnedovertheProgramtoDavidLander,ofSaintLouisUniversitySchoolofLawinMissouri,tochairandspeakinthefirstsession,entitled“TheConsumerDebt/CreditCrisis.”AfterintroductionsofthepanelmembersbyDavidLander,yourauthorwasallowedtobeginthissessionwithabriefdescriptionofhisperspectiveonthecausesandeffectsofthecrisis,followedbypresentationsoftheothertwopanelists(DavidLanderandAn-gelaLittwinoftheUniversityofTexasSchoolofLawinAustin)and,asnotedbelow,commentsfromtheaudience. B. Causes of the Crisis Yourauthorbeganbybrieflynotingtherelevanceofthecreditcrisis toavarietyof lawschoolcoursesand subjects.Forexample,theUniformCommercialCode(UCC)Article3holderinduecourseruleplaysaroleinthesecuritizationofmortgageloans; bankruptcy, mortgage law, and debtor-creditor remediesareobviouslyofincreasedimportanceasforeclosuressoar.TruthinLendingandrelatedconsumerlawissuesbecomeparamountaspotentialdefenses in foreclosurecases.5Arbitrationcasesandlitigationissueshavemultipliedandareapparentlybeingtrans-

formed.6Evenbasiccontractandtortlawissuesareimplicated.7Notmanyteachershaveadedicatedcourseonthecreditcrisis,8butalmosteverycommercialorconsumerlawcourseisaffectedinsomeway.Itis,therefore,importantforthoseteachingintheseareasoflawtohaveagraspoftheissuesandargumentsrelatingtothesedevelopments. Theremainderofyourauthor’scommentswereinlargemeasureasynopsisofthoseincludedinarecentsymposiumofre-latedlawreviewarticlespublishedintheGeorgia State University Law Review.9Theseremarkswillnotberepeatedhere,excepttosaythatyourauthorattributesthe1993-2006housingandmort-gagecreditboom(or“bubble,”ifyoulike),andinturnitssubse-quentcollapse,tosixprimaryfactors:(1)excessivelyaccommoda-tiveFederalReserveBoard(FRB)monetarypolicies(whichmadeitvirtuallyirresistibletobuyhousesoncredit);(2)federalpoliciesintendedtopromotehomeownershipandsubprimecreditavail-ability; (3) thegrowthandpoliciesofFannieMaeandFreddieMac;(4)securitization;(5)mortgagefraud;and(6)theincreasingpublicpolicyattackonsubprimecreditthatfollowed,especiallyafter2006,whichhelpedtopuncture thebubble.Thefirstfivefactorscontributed to the“bubble,” the sixthessentiallyhelpedpunctureitbytippingthelegalbalanceagainsttheorigination,refinance,andenforcementofsubprimemortgageloancontractsand liens for consumers who were already dangerously overex-tended.10Theresultwasapolicy-inducedcreditbubble,followedbyapolicy-inducedcreditcrunchthatpuncturedthebubble(andcontinuestothisday).Yourauthorpointedlynotedthatthereislikelytobedisagreementontheseissues,anddisclaimedanyef-forttoassignblameonaproportionatebasis.11

Whileyourauthorconsiders this analysis tobe soundand perhaps even apparent, there is seldom full agreement onsuchmatters, andof course there areotherperspectives.12Yourauthorexpectedsuchtobeairedatthe2010Program,andwasnotdisappointedinthisregard.SessionModeratorDavidLanderimmediately labeled the foregoing presentation “controversial,”and there were others in the audience who also disagreed. ThemostvocalofthesewasPrentissCox,aclinicianattheUniversityof Minnesota Law School in Minneapolis. He responded fromthefloor,andthenusedsomeofthetimeinhissessionthenextday to respond further.13 His comments are capsulized here astheyrelatetothissubject,ratherthanbeingpresentedintheusualchronologicalorder. The thrust of Professor Cox’s remarks was that thenonprime mortgage bubble and its collapse, with the resultingbroadeconomicconsequences,wascausedbyalackofadequateregulationofconsumercreditandrelatedsecondarymarkets.Inparticular,hecitedhisownlistoffivefactors:(1)thefailuretoregulatenonbankfinancial entities, especially the lackof safetyandsoundnessreviewfortheseentitites;(2)the“almostcompleteidentification”offederalbankingregulatorswithindustryinter-ests,andaresultinghostilitytoconsumerprotection,aswellasafailureofregulatorstoseethedangersofnonprimelendinguntiltoolate,includingthefailureoftheFRBtouseitsbroadHOEPAauthorityuntil after thecrash; (3) thecombinedeffortsof fed-eralregulators, federalcourtsandsecondarymarket institutionstopreemptorotherwisesuppressstateregulatoryreformsaimedatcontrollingabusivemortgagelending;(4)theprivatizationofFannieandFreddieandafailuretoregulatethesecondarymort-gagemarkets;and(5)mortgagefraud. Regarding your author’s comments, Professor Cox re-spondedthathe“couldnotdisagreemore.”Specifically,hestatedthat: theFRB’saccommodativemonetarystancewasa“periph-eral”issuethatdidnotsignificantlyaffectthequantityorqualityofnonprimemortgage loansbecausenonprime lending thrivedinbothhighandlowinterestrateenvironments,andFRBpolicy


affected the bubble only by contributing to sustained housingpricegrowththathidtheproblemswithnonprimelending.HeaddedthatFannieandFreddiewerelatetothenonprimemarketandthuswerenotsignificantfactorsinitsgrowth,andthattheyenteredthatmarkettomakeadditionalprofitsbecausetheyhadbeenprivatized.Hesaidthatanti-predatorylendinglawsarepartofthesolution,nottheproblem.Heconcludedbystatingthatitisa“disservice”tothepublicto“rewritehistory”consistentwiththeinterestsofthosewhodrovethederegulatoryagenda;theau-diencerespondedtothisstatementwithvigorousapplause. C. A Seminar Approach AngelaLittwinthendescribedhercourseonunderstand-ingthemortgagemeltdown.Thisisatwocredithourscoursethatincludeseachstudentwritingapaperonthemortgageandcreditcrisis.Thisapproachoffersobviousbenefits,intermsofproddingthestudentstoconducttheirowninquiriesandreachtheirownconclusions(andperhapsminimizingtheneedfortheteachertochooseamongfactorssuchasthosenotedabove). The objective of the course is to consider what wentwrong.Thisrequiresthestudentstoconsiderandunderstandtheroleofsuchthingsas:(1)thevocabularyofcreditlaws;(2)loanterms, such as adjustable mortgage loans (AMLs) and pre-pay-mentpenalties;(3)loanbrokers,includingtheimpactonminori-ties; (4) credit availability issues and thepossibility thathome-ownership is not necessarily good; (5) securitization (includingmisalignedincentives);(6)loanservicers;and(7)mortgagemodi-ficationprograms. A challenging aspect noted by Professor Littwin is thatthisisasmuchafinancialsystemcrisisasaconsumercrisis.Manystudentsaremore interested infinance thanconsumerprotection,andthelatterispoliticallycharged.Inaddition,theseissuesrelatetorecentdevelopments,andmuchoftheliteratureisnotcurrent.Thus,studentsmust rely to some extent onmedia reports and the like;moreover, the students choose theirpaper topicsmidway throughthecourse,beforetheyhaveafullunderstandingoftheissues. Thismustbeoneofthefirstlawschoolcoursesinthecountrytofocusentirelyonthecreditcrisis,andAngelaandtheUniversityofTexasLawSchoolaretobecommendedforbreak-ingthisnewground.Hercourserequiresthestudentstowriteapaperratherthantakinganexam,andthisallowstheteachertograde studentpapers relating tocontroversial subjectsbasedontheformandqualityoftheanalysisratherthanthestudentreach-inga“correct”answer.Evenwithallofthechallenges,itseemsaworthwhileapproach. D. Interdisciplinary Approach DavidLanderthendescribedhisinterdisciplinarycourseon consumer protection law, which approaches these issues bycombiningafocusonhistory,bankruptcy,andtheimpactofcon-sumerprotectiononconsumercredit,withbankruptcyissuestak-ingupaboutone-thirdofthecourse,thencoverageofthecreditcardexplosionandmortgagedebt(withapublicpolicyfocus).14Thereiscoverageofthehistoryofconsumercreditpriortoenact-ment of the federal Consumer Credit Protection Act in 1969,thencoverageofFederalTradeCommission(FTC)materials,fol-lowedbydiscussionofcreditlawbasics,includingsubprimeandprimecredit, refinancing issues,homeequitywithdrawals, autofinance,andcreditreports. Professor Lander then presents social science sessionscovering sociology, economics, andbehavioral economics.Basi-cally, the course combines social sciences, consumer protectionlaw, and bankruptcy, including how to enforce consumer rem-edies (e.g., public versusprivate enforcement).Then the courseendswithinternationalcomparisons.

Sincethecrashthereisanewemphasisonteaserrates(forfurniture,thencreditcards,thenmortgagesandcars).Mort-gagecasesaresaidtobedifferentbecausetheycantiptheen-tireeconomy(eitherupordown,unlike,say,furniture).Buthequeried:couldcreditcardsdothesame?Whataboutautosandmanufacturedhomes?Allofthesepresentimportantopportuni-tiesandrisksforconsumers,andtheeconomy. Ofcourse,asProfessorLandernoted,thetoughpartisfindingappropriatesolutions:Whatshouldtherulesbetobal-ancetherisksandopportunities?Itmightbeaddedthatpolicymakers(andacademics!)oftenseembetteratidentifyingprob-lemsthaneffectivesolutions.

ProfessorLandertheninvitedcommentsandquestions.Geraint Howellsof the Universityof Manchester inthe U.K. offered aBritishperspective:Teach as teams,eachwithexpertisein different fields.Thisrequirescoor-dination, and onemust rememberthatmanystudentshave no back-ground infinance.Healsonotedthatthe new restric-tionsonconsumercreditcameatthewrongtime,attheendoftheboom.15

ProfessorLander thenposited thatbankruptcy law iswhere much consumer protection research is done (ElizabethWarren’sworkisanobviousexample).Perhapsthecrashwillleadtoareexaminationoftheseinterdisciplinaryeffects. The discussion then turned to what students shouldgetoutofsuchacourse.Consumeradvocacy?Bankruptcyex-pertise? Law practice pointers? Policy prescriptions? Audienceparticipants(includingPrentissCox)favoredapolicyfocuscen-teringontheroleofpreemptionandinadequatefederalregula-tion.Therewasalsomentionoftheroleofratingagencies.MarkBudnitzsuggestedbringinginconsumerstoexplainwhathap-penedtothem--citinganeedtodomoretoshowthehumanelements.JeffSovernsuggestedaneedtoconnectthemortgagecrisistoTruthinLending,reflectinganeedtohelpconsumersunderstandcreditterms.

III. Teaching Bankruptcy in a Consumer Law Course OhioStateUniversityMoritzCollegeofLawProfes-sorCreolaJohnsonpresentednext.Sheopinedthatexpertiseinbankruptcy law is increasingly necessary for today’s consumerlawyer.Issuessuchastheautomaticstay,discharge,cramdowns,and Chapter 13 plans are often critical. Bankruptcy clearly isanotherlayerofconsumerprotection.16

Shealsocitedcasesusingconsumerprotectionlawtoreduce creditor claims in bankruptcy, e.g., involving car titleloans,subprimemortgageloans(asgovernedbypredatorylend-ing laws), inadequate loan documentation, payday loans, theFair Debt Collection Practices Act, the Fair Credit ReportingAct,andTruthinLending.17Shesuggestedmaximizingthecon-sumer’sexemptassetsandusing theChapter13cramdown.18This is themagicofChapter13,butProfessor Johnsonnotedthe910daycollateralruleinthe“hangingparagraph”andlimitsonhomemortgagecramdowns.19ShearguedthataconsumershouldbeabletoasserttheTruthinLendingrightofrescission

This must be one of the first law school courses in the country to focus entirely on the credit crisis, and Angela and the University of Texas Law School are to be com-mended for breaking this new ground.


asarecoupmentclaimeventhoughthestatuteoflimitationshasrun.20

IV. Global Response to the Financial Crisis A. U.K. Law MarkD.BaeurofStetsonUniversityCollegeofLawinGulfport,Floridaservedasthechairandmoderatorforthisses-sion,introducingtheotherspeakers.GeraintHowellsspokefirst,notingthatintheU.K.manyschoolsteachconsumerissues,butfewteachconsumercreditlawtostudents.21TheConsumerLawcoursecameoutoftheSalescourse.Noconsumerbankruptcyistaught.E.U.directivesareonlyarecentinfluence.U.K.consumercreditlawisdifficulttomaster,beinghighlytechnicalandbasedonarbitrarydistinctions,withtheresultthatitisverycomplex.Untilrecently,therewaslittlecaselaw.Examplesattheendofastatute areoftenwrong, indicating that even thedrafters couldnotgetitright.Currentlythereisaconsumercreditlitigationex-plosion,oftenbasedonminortechnicalerrors.Thishasspawnedanewlitigationindustry,fueledbyanaturaldesireofcourtstouse technical errors to correct substantive abuses.But itmeansthatU.K.lawistoocomplextoadequatelycoverinalawschoolcourse(welcometotheclub!). OnyekaOsujioftheUniversityofExeterSchoolofLawinCornwell,U.K.,positedthattherearethreenewissuestobecoveredinsuchacourse,derivedfromthecurrentcrisis:(1)howdid it start?; (2)howdidcreditmarketingcontribute?; and (3)howwillbusinessesrespond?Henotedthattheconsumerrem-ediesmayincludelegaltheoriesbasedon:

• businessharassmentofconsumers;• tort--noneedtoprovephysicalorpsychiatricinjury;• emotionaldistress;• negligence;• privacy;and/or• defamation(injurytoreputation).22

B. Australia EileenWebb,oftheUniversityofWesternAustraliainPerth,notedthatAustraliahasfaredbetterthanmostcountries,duetofactorssuchaslesssubprimelendingandsecuritization,abudgetsurplus,andtheChinaboom.ButshenotedsomerecentlegislativedevelopmentsthatparallelthoseintheU.S. ProfessorWebbqueried:Howeffectivelywill thenewAustralianuniformconsumercredit lawrestrainpredatorycon-duct? Australia has had something like the American UniformConsumerCreditCode(U3C)since theearly1990s(e.g.,gov-erningdisclosure).Thisisstatelaw.Thenew,nationalConsumerCreditProtectionPackagehastwophases:(1)licensingmortgagelenders and brokers (now); and (2) responsible lending regula-tions, including a substantive obligation to assure that there isnosubstantialhardshipandtoassuresuitability.23Nooneknowswhatsubstantialhardshipmeansorwhatthe impactwillbeoncredit availability.Adryingupof credit availabilitywillbedif-ficult for first time homebuyers and small businesses. The sec-ondphasewillbeeffectivein2011.Thiswillalsoimpactreversemortgages,pointofsalelending,andsmallbusinesslending.ThissuggeststhepossibleemergenceofissuessimilartothecreditlawproblemsintheU.S.,astheAustralianU3C(liketheAmericanU3C)isbasedpartlyontheU.S.TruthinLendingAct.Anunan-sweredquestionis:AretheAustralianstateswithpredatorylend-ingstatutesthatgobeyondtheU3Cfaringbetter?Inanyevent,andwithoutansweringthatquestion, inAustraliathestatesaregivinguptheissuetothefederalgovernment,muchasintheU.S. Another concern is the hardship for consumers goingforwardasAMLsadjustupward,especiallyifconsumersareun-

able to refinancedue toa lackofcredit availability.Again, thissuggestsaparalleltotheU.S.experience. C. Vietnam NguyenThiVanAnhofHanoiLawUniversityinViet-namdescribednewVietnameseconsumerprotectionlegislation.There was essentially none before 1989. By the 1990s, a widerangeoflegaldocumentationrequirementstoprotectconsumershadbeenimposed,butdeficiencieswereevident,soVietnamisintheprocessofdraftinganewconsumerprotectionlaw. Until now, teaching consumer protection has not re-ceived sufficient attention in Vietnam. Today, however, eleven“traininginstitutions”plancoursesonthissubject,includingHa-noiLawUniversity(thefirstone),officiallybeginninginOctober,2011.Thecontentofthenewcourseincludes:overview;pre-saleprotections;sales;anddisputeresolutionmechanisms. D. Other Comments Frank Devlin, an Adjunct Professor at the UniversityofHoustonLawCenter,notedatrendtowardtheconvergenceofworld-widelegalenvironments,andqueried:Whatisthegoalof law schools in this?ProfessorOsuji responded:TheE.U. il-lustrates the difficulty of, among other things, reconciling thefreemarketversusregulation,andculturaldifferences.ProfessorWebbaddedthat it isevendifficult toachieveconvergencebe-tweencoursesinthesameschool,muchlessinternationally.Ger-aintHowellscounteredthatmanycountriesarefacingthesamekindsofproblems,forexample,e-commerceissuesandbalancingtheneedforconsumerprotectionagainsttheadverseimpactoncreditavailability,andthatsomesimilarapproachesareevident.TheE.U.isseekingharmonization,andtherearesomecommonconcepts. ArnoldRosenberg,AssistantDeanandDirectoroftheWalterH. andDorothyB.DiamondGraduateProgram in In-ternationalTaxationandFinancialServicesatThomasJeffersonSchoolofLawinSanDiego,notedthatsomelegalconceptsarealientootherjurisdictions,e.g.,civillawversuscommonlaw.Thebiggest difference is enforcement (e.g., litigation versus regula-tion and licensing). Professor Katheran Garcia, of the Erasma-musUniversiteitRotterdamSchoolofLaw in theNetherlands,notedthechallengeoftranslationoflaws,andrelatedill-definedconcepts.GeraintHowellscitedusuryceilingsasexamples:Thereisnoconsensuson theeffectsre theblackmarket, etc.; andhecitedtheconceptofan“unfairrelationship,”whichisintention-allyundefinedintheU.K.EileenWebbnotedsimilarproblemswith“unconscionable”contractsinAustralia.TheLisbon,Portu-gal-E.U.directive,choiceoflawruleaddressesthisbyallowingapplicationoftheconsumer’slaw.GeraintHowellnotedthatthisis very protective of consumers, and requires harmonization inordertoavoidunfairnesstobusinessesinsuchtransactions.

V. Settlement, Collection and Modification A. Right of Rescission ProfessorMichaelGreenfieldofWashingtonUniversityLawSchoolinSt.Louis,authorofawell-knownConsumerLawcasebook,servedasModeratorofthissession. ProfessorLeaKrivinskasShepardofLoyolaUniversityChicagoSchoolofLawspokefirst,describingtherightofrescis-sionundertheTruthinLendingAct(TILA);24shesummarizedtheTILArulesandtherightofrescission(essentiallylimitedtoa non-purchase-money lien on the borrower’s residence),25 andraisedcertainissues,forexample:Howdoestheborrowerfinancethe re-tender obligation? By sale or refinance? She noted that,withsomanymortgageloansunderwater,thismaynotbepos-


sibleorevendesirable.Howthentofulfillthetenderofpaymentobligation,withanunderwatermortgage?TILAreversesthecom-monlaworder:thecreditormustreleasethemortgagebeforetheborrower’stender.Butthiscreatesaseriousriskforthecreditor.Forexample,ifthecreditorreleasesthemortgage,thenthedebtorfilesbankruptcy.Thisisviewedasanend-runaroundthebank-ruptcyprohibitiononmodifyingahomemortgage,26andcourtsthus revert to the common lawmodelon equity grounds,kill-ingtherescissionrightforunderwatermortgages:Iftheborrowercannottender,therescissionrightislost.27 Shesuggestedapossiblesolution:Thecourtshoulduseequitablerescissiontoallowtheborrower’stenderininstallments.Mostrescissionplaintiffsarerespondingtoaforeclosure,notdis-closureerrors.TILAisdesignedtobeliberallyinterpretedinfavorofborrowers.Otherwise,TILArescissionwillbecomeobsoleteinasofthousingmarket. B. Debt Counseling Professor Greenfield discussed credit counseling pro-gramsasaresponsetothecreditbubbleandcollapse.Hearguedthatrisk-basedpricingandotherfactorsallowedanexpansionofcredit and the resulting problems when that bubble collapsed.Companies and agencies may offer help in the form of creditcounseling and debt settlement arrangements. Credit counsel-ing may result in a debt management plan (i.e., a voluntarycomposition). He said that nonprofit Consumer Credit Coun-seling (CCC) agencies are now being supplemented by privateentities masquerading as nonprofits. The policy responses haveincludedtheCreditRepairOrganiza-tion Act (CROA)28 and the UniformDebtManagementServicesAct(UD-MSA).29 Most states outlaw privatefor-profit debt settlement companies,butnotall.Thefor-profitdebtsettle-mentcompaniesfocusintheremain-ing states. But similar, not-for-profitdebtsettlementservicesareoftenavail-able in other states. Professor Green-fielddescribed thesedebtadjustersascreditcounseling“light”(becausetheynegotiate for consumersbut are lightoncounseling).Thenthereareforeclo-sure rescuefirms.30He said thatmis-representationsarerampantandunfairpracticescommon(suchasover-charg-ing, and equity stripping), adding toconsumers’ problems instead of pro-vidingsolutions.

ProfessorGreenfieldnotedthatsolutionsareavailable:In2002,NCCUSLbeganauniformlaweffort,coveringcreditcounselinganddebtadjustment.TheresultingUDMSAincludesrequirementsfor:registrationandlicensing;disclosure;substan-tive contract restrictions; private and public enforcement; andpricecontrols.Consumergroupsopposedauniformactbecausetheypreferredanoutrightban,buttheynowsupportfederalleg-islation.TheUDMSAhasbeenadopted in six states; theFTCandstateattorneysgeneralhaveenforcedother,existinglaws.TheFTCproposed two federal regulations,not applicable tobanksandnon-profits.31Theyapplytoattorneys,prohibitmisrepresen-tations,requiredisclosures,andimposetimelimits,andbanpay-mentofcompensationbeforedebtisrestructured.Nofeecanbechargedunlessthelenderagreestoamortgagemodificationforatleastfiveyears.Inaddition,SenateBill3264proposesfederallegislation(similartotheUDMSA).32

C. Debt Buyers ProfessorMarySpectoroftheSouthernMethodistUni-versityDedmanSchoolofLawspokenext,describingherrecentstudyoflitigationtocollectconsumerdebts.WithassistancefromanAmericanBarAssociationgrant,shegatheredempiricaldatafromDallasCounty regardingcredit cardcollectioncases initi-atedbydebtbuyers.Sheexplainedthatbecausethedebtbuyeroftenpurchasesthepastduedelinquentdebtforpenniesonthedollar, the buyer often receives only a list of files, not the filesthemselves.Shereportedgrowingconcernsabouttheconductoflitigationbasedon thesefiles, and the legitimacyof judgments

Scenes from the May conference.


awardedwhenthedebtbuyersuesonthebasisofthislistalonewithout offering the underlying evidence to support its legalclaims. Usingcluster sampling,ProfessorSpectorgathered in-formation from511debtbuyercases,which representedabouttwenty-fivepercentofallcasesfiled inDallasCountycourts in2007andabouthalfofalldebtcasesfiledinthejurisdiction.Inherstudy,justfivedebtbuyerswereresponsiblefortwo-thirdsofthe cases, and largebanks involved in issuing credit cardswerethe largestdebtoriginators.ProfessorSpector reported that, al-thoughnearly40percentofthecasesresultedinadefaultjudg-ment,abouthalfweredismissedwithoutprejudice.Whileonlyone-in-four(twenty-fivepercent)ofthedefendantsenteredanap-pearance,theirappearanceappearedtoincreasethelikelihoodofadismissalandwheretheconsumerwasrepresentedbyalawyer,seventy-threepercentofthecasesweredismissedwithoutpreju-dice.Althoughattorneyrepresentationdidnotmeanthedefen-dantprevailed,itoftenmeantthatthesuitwentaway;moreover,thissuggeststhatdebtorsunableorunwillingtosecurelegalrep-resentationmayobtainafavorableresult,i.e.,adismissal,simplybymakinganappearanceinthelitigation. Professor Greenfield asked if there was evidence of“sewerservice”(i.e.,falseservice).ProfessorSpectorindicatedthattherewasnosuchevidenceandsuggestedthatthehighrateofdis-missalsmightsuggestthatsewerservicewasnotaprobleminthejurisdiction.ProfessorMarkBudnitzofGeorgiaStateUniversityCollegeofLawnotedthat somedebtbuyersareattorneys,andclaimnottoberegulatedbythestate’sattorneygeneral,butbythebarassociation.ProfessorSpectornotedthatregulationbythebarmaytriggeradditionalprofessionalresponsibilities,andthatthereareproposals,forexample,toenhancelawyers’obligationswhendealing with unrepresented parties. She also noted that somestates,suchasMaryland,considerattorneysactingasdebtbuyerstobedebtcollectorsandrequireregistrationassuch;others,suchasNorthCarolina,placeadditionalrequirementsonpartiesandtheirattorneyswhenfilinglawsuitstocollectconsumerdebts,byrequiringevidenceofthedebttobefiledwithorbeforefilingalawsuit. Thediscussionincludedotherissuesrelatingtotheroleofthecourtsinthecollectionofconsumerdebts.Amongthemwasanapparentincreaseinsomejurisdictionsoftheuseofpost-judgmentdiscoverytoserveasabasisforabenchwarrantthat,inturn,servesasthebasisforthesettingofabondintheamountofthedebt.

VI. Teaching Secured Financing in a Consumer Law Course ProfessorWilliamVukowichofGeorgetownUniversityLawCenterinWashington,D.C.describedtheimpactofUCCArticle9,whichgovernspersonalpropertysecuredtransactions.Article9 recognizes self-help repossessionupondefault,andal-lowsaclaimforanydeficiency.33Clearlyasecuredcreditor’s le-verage is superior tothatofanunsecuredcreditor,both inandoutsideofbankruptcy.Inbankruptcy,theArticle9securedpartyisentitledtoasecuredclaim,witheitheraresulting100percentpaymentofthatclaimoralienthat“flowsthroughbankruptcy”andcanbeenforcednotwithstandingthedebtor’sdischarge,34un-lesssubjecttolienavoidanceoracramdown.35 TheArticle9securityagreementtypicallydefinesdefault(but this always includesnonpayment; lackof insurancealso iscommonasaneventofdefaultinconsumertransactions). Replevenisalsoallowedasameansofrepossessionbutusuallyislesseffectiveandmoreexpensivethanself-help.Profes-sorVukowichrecommendedthemovie“RepoMan”(oneofyourauthor’sfavoritesandundoubtedlyamongtheworstmoviesevermade).HealsodescribedtheArticle9dispositionprocess.

VII. Warnings, Disclosures, Behavioral Studies and Virtual Worlds A. Impact of a Duty to Warn RichardAldermanservedasModeratorforthissession.Joanna Luzak of the Universiteit van Amsterdam, the Nether-lands,spokefirst.Shediscussedtheliabilityofaserviceprovider(e.g.,abuilder),aftertheconsumerhasbeenwarnedofariskbutdecidestoproceedanyway.E.g.,abuilderisrequiredtousecer-tainbuildingmaterialsasdemandedbytheconsumer,afterwarn-ingtheconsumerthatthematerialswereinappropriate.Clearlythebuilderhasaduty towarn(and is liable fora failure todoso,e.g.,forabreachofthedutytowarn).Butwhatifthereisawarningandtheconsumerdoesn’tchangehisorherinstructions?Is thebuilder liable, if thebuilder follows the instructions andconstructsadefectivebuilding?Isthereliabilityintort?Contract?InGermany,thecontractormaybeliable,andthusthebuildershouldrefuse;butthenthecontractormaybeliableforbreachofcontract.Likewise,underU.K.law,theremaybeliabilityundercontract and tort, though it is not quite as clear.But in eithercountrythebuildermaybeliableforproceedingornot.Thecon-sumermayeither:(1)notunderstandrisk;or(2)bewillingtoas-sumetherisk.Onekeyforabuilderinthisscenarioistomakethewarningclear,toavoid(1).Arguably,thebuildershouldbeliablein (1),butnot (2).ProfessorLuzak’s seminarmaterialsprovideguidelinesforeffectivewarnings.36

B. Standardized and Simplified Information Disclo-sure Mechanisms in Relation to Consumer Credit Catherine Garcia,37 Erasmus University, RotterdamSchoolofLawintheNetherlands,providedanoverviewofthe“TruthinLending”principleaslaiddownbytheEuropeanCon-sumerCreditDirective38andcomparedtheU.S.TILA,discussingtheexperimentationwiththreespecificformsofmandatoryinfor-mationdisclosureinrelationtofinancialproducts–i.e.,wealthwarnings,comparativetables,andsummaryboxes–asameansofaddressingbehavioralmarketfailures.39Shenotedthattheprob-lemswithdisclosureinclude:

• Informationoverloadisarisk,giventhefactthatanex-cessiveamountofinformationmayconfuseconsumers,astheamountapersoncanholdinshort-termmemoryandeffectivelyprocessislimited.Themaximumhumancapacitytoassimilateisaboutseven“chunks”ofinfor-mation(shecitedbehavioraleconomicsstudies--therearetimeswhenyourauthorwouldfeelfortunatetohitseven);

• thelackofuniformityandsimplicitywithregardtokeyconsumercredit information,whichconfusesthecon-sumerandraisesthethresholdsforsearching;and

• theTILAdisclosuresmaycomeveryshortlybeforethedecision-makingprocess, towhichtheconsumer isal-readyverballyandpsychologicallycommitted.

She noted that there are differences between the U.S.andE.U.disclosuresbuttheproblemsnotedabovearecommontoboth systems.Sheasserted that thechallenge forpolicymak-ers in thisarea is tostrikeabalancebetweentransparency(i.e.,content) and simplicity (i.e., adequacy) ofmandatory informa-tion disclosure, with standardization (i.e., methodology) as thecommonguideline.Thus,sheproposedthatpolicymakersshouldmakethedisclosures:(1)simpler;and(2)easiertoread;and(3)shouldprovidebettertimingtoachievepricetransparency. C. Virtual Worlds Christine Riefa of Brunel University Law School inUxbridge,Middlesex,England,describedtheemergenceofcom-


puter games and virtual worlds as consumer issues. The gamesinclude serious role playing. Popular examples include SecondLife,WorldofWarcraftandEntropia.Someofthesegamesuseseparate(virtual)currencies,forexample,LindendollarsforSec-ondLife. InSecondLife,playersmaypurchasevirtualcurrency,makemoneyinthegame(measuredbythevirtualcurrency),andthenreconvertittorealdollars.Thesevirtualcurrenciesaretrad-edonthe“Lindex”exchange.Thisconstitutesavirtualeconomy,andraisesthequestion:Howtoregulatethesetransactionsintherealworld?Doconsumer lawsapply?Ifso,how?It is,afterall,agame.DoconsumerlawsapplytothegamestrategiesofMo-nopolyplayers?Ifso,towhatextent?Butthesegamescanrelatetorealmoney.(Socananyothergame,ofcourse,butinthiscasethetietorealityissomewhatmoreformal.)Whereisthedivid-ingline?WouldMonopolytransactionsbesubjecttoregulationiftheyusedorcouldbeconvertedtorealmoney? Sales of goods rules (e.g., UCC Article 2) don’t apply--itisallcomputercode(governedbyintellectualpropertylaw).Decisionissuesaredifferentthanintherealworldbecauseit isagame; thus,behavior is skewed.Thismaycutbothways:Ontheonehand,itisonlyagame,andisintendedasanexerciseinfantasy(sothatnormalrulesdon’tapply);ontheotherhand,thismayencourageextremebehaviorthattranslatesintorealfinancialdamages.Thentherearethebasiclegalissues,e.g.:DoestheUni-formComputerInformationAct(UCITA)apply?Howcanoneenforcesuchrulesinavirtualworld?Whatarethedisputeresolu-tionmechanisms?Thesubstantivelegalstandards? D. Behavioral Studies in Remittance Scams Hesakazu Hirose of Aoyama Gakuin University inTokyo spoke on remittance scams. As suggested by behavioralstudiesofthosevictimizedbysuchscams,thefactorsthatinflu-ence consumer susceptibility in these cases include: the impactof prompt versus considered decisions; and possible differencesbasedontheconsumer’sageandgender.40Remittancescamsof-tenrelyonaneedforapromptresponsetoatelephonecall--thissuggestsaneedforawaitingperiod,e.g.,adelayinATMorotherfundstransmission. Otherfactorsworthconsideringincludelimitations inthe consumer’s: power of memorization; ability to distinguishfacts;lengthofattentionspan;andacclimationperiod.Consum-ersmaybedistinguishedonthisbasis.Thusa“coolingoffperiod”mayworkbetterforsomeconsumersthanforothers.Thisillus-tratestheroleofbehavioralscienceincraftingconsumersolutions--butalso thatconsumersarediverse,makingdifficultabroadpublicpolicysolution. E. Questions and Comments ProfessorGreenfieldqueriedProfessorRiefa:Isitimpor-tantthatthevirtualworldlegalstandardsmirrortherealworld,toavoidunrealisticconsumerexpectations?ProfessorRiefarespond-ed:Perhaps,butapurposeofagameis toallowunusual socialnorms.ProfessorLuzakaddedthatplayerspresumablyknowthedifference.

VIII. Teaching Payment System Issues ProfessorMarkBudnitzcoveredthistopic,notingthatpaymentslawdeservestobepartofaConsumerLawcourse,asitgovernsavitalconsumerfinancialfunction.Paymentsareintegraltoconsumertransactions;thedisputeresolutionmechanismsarespecificandofferadditionalavenuesofredress,butcanbecom-plexandtheconsumermayrequiretheassistanceoflegalcoun-sel. The payment processor may also have liability, in additiontotherecipientofthefunds.41TheFRBhasplenarypowerover

mostpaymentsystemissues,e.g.,theFRBhasnowdeclaredthatall checks are “local”underRegulationCC.But this isnow tobesupplementedbyCFPB42jurisdictionoverRegulationsEandDD, under the Dodd-Frank Act.43 This development may cre-atesometension(andperhapsadditionalconfusion)asbetweencompetingpaymentsystems(andregulators).Butallofthisem-phasizes the importanceofpayment system issues in consumertransactions. As an apt example, Professor Budnitz cited shoppingontheweb: thisactivity implicatescontractandconsumer law,includinge-commerce,butalsopaymentlaw.Otherexamplesin-clude:Telemarketers’useofdemanddrafts;paydayloans,whichimplicate an intersectionbetweenUCCnegotiable instrumentslawandconsumerlaw;mortgageloansandtheroleoftheholderinduecoursedoctrineinsecuritizations;governmentbenefitsandthe EFTA; money services for the unbanked; on-line banking;andtheuseofdebitcards, storedvaluecards,andcreditcards.Allinvolvepaymentsystemissuesinthecontextofcommoncon-sumertransactions.ProfessorBudnitzsuggestedapossibleteach-ing approach which hehas used for many years:Createahypotheticalsaleof a cellular telephone(cell phone) in class, andconsiderpaymentbydif-ferent means to illustratethe alternatives.This alsoprovidesaplatformto il-lustrate topics such as:dispute resolution (if thecell phone doesn’t work);privacy(whichpaymentsystemprovidesthemostprivacy?);coststothemerchant(whichpaymentsystemsandregulatoryrequire-ments are the most costly?); theft; and fraud (which laws pro-videthebestliabilitylimitsforunauthorizeduse?).Hesuggestedgivingthestudentswrittenmaterialsinadvancewhichincludeadescriptionof various scenarios the consumermayencounter,44togetherwithapplicablestatutoryprovisionssuchasliabilityforunauthorizedtransfersunderRegulationsZandE.Thematerialsalso should raisepolicy issues suchas the legalprotections thatconsumersmayneedandthecoststhoseprotectionsmayimposeonmerchantsandfinancialinstitutions.

IX. Teaching Arbitration RichardAldermancoveredthistopic,whichisoneofhisspecialties.Henotedthatarbitrationisincompetitionwithmanyother important issues for attention in aConsumerLawcourse,including (as noted above): payment systems; secured transac-tions;andbankruptcy.Butthosearesometimesleftoutduetotimeconstraints(andperhapsduetocoverageinothercourses),whilearbitration is now commonly included as an essential subject inconsumerlaw.Butsometimesitisputattheendofthecourse,andconsequentlygets leftout.DeanAldermansaid it shouldnotbe--becauseitisoneofthe“hottest”consumerlawissues. He said thatmost studentsdonothave abasicunder-standingofconsumerarbitration,despitetheexpansionofAlter-nativeDisputeResolution (ADR) courses in law schools.There-fore,thereisaneedtocoveratleastthebasicsinaConsumerLawcourse,anddistinguishitfromcommercialarbitration.Onebasicissueis:Didtheconsumerreallyagreetoarbitration?Ifthearbitra-tionclauseishiddeninthefineprint,thereisprobablynoconsent.Anotherbasicquestionis:Whenandhowisarbitrationimposed?DeanAldermansaidtheU.S.maybeuniqueonthisissue,asothercountrieshaverejectedmandatoryarbitration,e.g.Vietnam. The possibility of a lawsuit to challenge arbitration is

Payments law deserves to be part of a Con-sumer Law course, as it governs a vital consum-er financial function.


nottheconsumer’sbestremedy;DeanAldermanarguedthatcon-sumersshouldnothavetosue.Statesvaryonthis:TheCalifor-nia cases are favorable to consumers,but arenot representativeofotherstates,regardinghowandwhenarbitrationcanbechal-lenged.However,arightofappealisanessentialpartoftherighttolitigate. WhydoesarbitrationmatterinaConsumerLawcourse?DeanAldermanpositedfourprimaryreasons:

• Arbitrationaffectsthesubstanceofthedispute,notmerely the forum (e.g., due to the “repeat player”advantage,theabsenceofsubstantivelawrules,andthelackofajudicialrecordandopinion;moreover,arbitrationcostsdeterclaims);

• therearenoclassactions(waiversareenforced).Thisisareasonformanyarbitrationclauses--itallowscreditorstoignoremassviolations;

• thereisnocommonlawdevelopmentofsubstantivelawinarbitration;and

• itisrapidlydeveloping,withmanystatevariations.45

Theproposed federalArbitrationFairnessAct46wouldprohibitmandatorypredisputeconsumerarbitrationclausesandalsodealwithotherissues;itwouldcontinuetoallowarbitrationinemploymentandsecuritiescases(wherelargeramountsareatissue and arbitrationworksbetter).However, thefinal scope iscurrentlyunclear. Inaddition, theDodd-FrankActcastsdoubtonthefutureofconsumerarbitration,e.g.,directingtheCFPBtostudyandregulate(orevenprohibit)arbitrationclausesasneed-ed.47

X. View from Clinicians A. The Houston Clinic TheModeratorforthissessionwasLauraBoeckmanofFlorida Coastal School of Law in Jacksonville. She introducedRichardMcElvaney,ProgramDirectorattheCenterforConsum-erLawattheUniversityofHoustonLawCenter,whospokefirst.HenotedthattheUniversityofHoustonhasmultipleconsumerclinics,andasurveypracticecourse(alongwithanumberofcom-munityandconsumerservicesprogramssponsoredbytheCenterforConsumerLaw).Wheredoesaclinicget its clients?This isnoproblem,hesaid,asthereisnooranominalfeeandmultiplesources for cases, e.g.: the Texas Consumer Complaint Centerand Legal Aid provide referrals; the volunteer lawyer program;studentsandprofessors;formerclientsandword-of-mouth;andconsumereducationalevents. AtypicalclinicalscopeandstructureisillustratedbytheHoustonclinic:Theclinic isopen to thepublicduring regularbusinesshours(withtwostaffmeetingseachweek;onetoreviewcasesandoneforsubstantiveteaching).Theareascoveredinclude:landlord-tenantrelations;variousscams;bankruptcy;familylaw;debtor-creditor relations;wills anddeath issues. Student activi-ties cover theprocess from the initial intake to jury trials.Theclinichasresponsibilitieswithregardtobothclientsandstudents.Currentactivecasesinclude:debtcollectionandmortgagefraud;legislative advocacy work; teams of students working on largeprojects;andrelatedclassroomsessions.Thebenefitsinclude:in-tegrationofpolicyandtraining;trainingthatcrossessubstantiveareas of law; training that develops thinking like a lawyer; andpre-trialandtrialwork. B. Florida Clinical Consumer Law Course ProfessorBoeckmandescribedherfirstandsecondse-mestersubstantiveConsumerLawcourse(likeadoctrinalcoursebutcoveringlesspolicy),combiningclinicalandsubstantiveele-ments.48Thiscourseincludesanoverviewofconsumerrightsand

remedies, foreclosuredefenses, anddebtcollection issues as thelargestpartsofthecourse.LegalAidisthesourceofthecasesandissues covered (they do intake, which is time-consuming). ThestudentsthendolegalresearchinsupportoftheLegalAidcaseload.Aconcernisthetypicallengthofacase:Foreclosuredefensecasescan take twoyears,andoften includedepositionanddis-covery;thedownsideisthatstudentsgraduateandtheturnoverhurts.Studentsthusmaylosethesenseofhowlongtheprocesstakes.Also:Lawyersontheothersideoftenlackcompetence,sothestudentsmaynotseegoodexamples.Thecasesseldomgototrial,insteadusuallysettle. ProfessorBoeckman’s classmeets twice eachweek, fortwohoursineachsession;thisteachesgroupworkandteamef-forts.Theprocess of obtaining state approval (clearance certifi-cation)foreachstudentistime-consumingandissometimesadeterrenttoout-of-statestudents.However,thisdoesnotpreventout-of-statestudentsfromapplying;allofthestudentsinthepro-gramreceivetheirclearancecertificatefromtheFloridaBarAsso-ciationbeforebecomingacertifiedlegalinternandpracticingincourt.ItisaCROAviolation49iftheclinictakesafee,asagoaloftheclinicistocorrecttheconsumer’screditreport(sotheschooldoesnotchargeafee).Theclassislimitedtoeightstudentsduetothelevelofsupervisionneeded.Studentssaytheexperienceisthebestthinginlawschool. C. Minnesota Clinic PrentissCoxoftheUniversityofMinnesotaLawSchoolstated that his law school’s consumer clinic has many similari-tieswiththeprogramsattheUniversityofHoustonandFloridaCoastal.TheMinnesotaclinicalsotakesdebtcollectionabuseandotherindividualconsumermatters.Eachstudentrepresentsoneormoreindividualclientswithaconsumerprotectionconcern.Eachstudentalsoparticipatesinoneteamthatworksoneitherapolicyprojectoralargerpieceoflitigation,andProfessorCoxfocusedhisremarksonthispartoftheclinic’swork.Hegaveasanexampleofpolicyworkadebtmanagementbillthatwasre-searchedanddraftedbyclinicstudents,andsubsequentlyenactedbytheMinnesota legislature.Healsomentionedhisclinic’s in-volvementasco-counselinaclassactionsuitinvolvingareales-tatebroker.ProfessorCoxnotedthattheclinicwasabletoworkespeciallywell inhelping to formulate the legal theories of thecase anddrafting the complaint, although itwasmoredifficultto manage effective clinic participation as the case progressedthroughmotionsanddiscovery. D. Questions and Comments A question from the audience raised concerns aboutdrawing the attention of adverse legislation if a clinic succeedsin cases against important constituents. This was regarded as aparticularriskwithregardtoclassactionsandotherhighprofilecases.ButProfessorBoeckmanreportedthatherDeanandfacultyfully support the clinic; she said this is an essential part of thesuccessoftheprogram.Shesaidthatattorneyfeesareclaimediftheclientsupportsit.Butattorneyfeescanbewaivedifneededinordertosettle,attheclient’schoice.Whataboutcontingentfees?Thiswasadvocatedasameanstohelpcreatearealisticscenario,butitwasnotedbyCoxandothersthatthisraisesotherissuesandcomplexity.Butsomeonenotedthatitmighthelpbudgets. MarySpectornotedthatconflictsarepossiblewithre-gardtoclinicstudentswhointernat lawfirmswithclientcon-flicts.Thefirmcould challenge sucha conflict,but sheopinedthatoftenthefirmsaresodisorganizedtheydon’trecognizetheconflict.ShesuggestedcreatingaChinesewalltoisolatestudentsfromcaseswithconflicts. PrentissCoxrespondedtoaquestionaboutthestature


ofclinicsinlegaleducationbynotingthatoneoftheonlytwonon-plenarysessionsinthe2010ProgrampittedtheCliniciansPanelagainstanalternativebreak-outsessionforthoseinterestedinapplyingtoteachconsumer law(yourauthordidnotattendthelatteranditisnotdescribedhere).Heopinedthatthisseemedoddbecause it requiredanattendee interested in teachingcon-sumer lawinaclinical settingtochoosebetweenthetwomostimportantsessionsofthe2010Program.Hesaidthisseemedtoreflectaninappropriatehierarchicalbiasabouttherelativevalueofclinicalteachersintheacademy.ProfessorCoxopinedthatthelawschoolhierarchyisthereverseofwhatwouldbeoptimal:theprioritiesshouldbe:(1)researchandwriting;(2)theclinic;(3)doctrinallawteaching.Instead,henoted,thehierarchytradition-allyistheoppositeatmanyschools. Other common challenges for a clinic were also dis-cussed,e.g.:beyondsimplecases,theclinicalprofessormustguidethestudentsandthereisarisktheymaybecomemere“go-fers.”It is a labor-intensive process to lead students without beingoverbearing.Somesuggesteda focuson small cases,which stu-dentscanlead;obviously,largercasesrequiremoredirection;butatrade-offisthatstudentslearnmoreincomplexcases,thoughsomebelievethis isoutsidethetraditionalclinicmodel.Othersopinedthatafocusonsmallcases istheoppositeofwhattheirclinicdoes.

XI. Regulating Consumer Credit A. The Dodd-Frank Act University of Houston Law Professor Jim HawkinsservedasModerator(andaspeaker)forthissession. Jeff Sovern of St. John’s University School of law inJamaica,NewYork ledoff thepanelof speakers,with apoint-by-point explanation of the bills that subsequently became theDodd-FrankWallStreetReformandConsumerProtectionAct(Dodd-FrankAct).50Hedescribedthestatusofthebills,whichpreviously would have created a federal Consumer FinancialProtectionAgency (CFPA)butwere reconstituted tocreate theBureauofConsumerFinancialProtection(CFPB)asanautono-mousunitwithintheFederalReserveSystem(FRS),independentofanyinfluencebytheFederalReserveBoard(FRB).TheDirec-torof theCFPB is to appoint aConsumerAdvisoryBoard, toadvisetheDirector.TheDodd-FrankActalsoprovidesforasepa-rateFinancialStabilityOversightcouncil(FSOC),withauthor-ityoverthesafetyandsoundnessof thefinancial system(S&S)(andauthoritytooverturnaCFPBruleifthatrulethreatensthatS&S).ProfessorSovernnotedthepotentialtensionbetweencon-sumerprotectionandS&S. Heexplained that the autonomyof theCFPB is sup-ported by an independent budget within the FRS, keyed toFRS revenues (and currently estimated at about $500 millionper year). Presumably the Consumer Advisory Board memberswill come fromconsumer representatives.This iswhollydiffer-entfromthecurrentFRBconsumeradvisoryboard,whichwillcease toexist.TheCFPBhas jurisdictionover the full rangeofconsumerprotectionstatutes,includingTILA,ECOA,etc.51TheCFPBalsohastheauthoritytoissuesubstantiverulestoprevent“unfair,deceptiveorabusivepractices.”IntheHousebill,“abu-sive”wasdefined as: (1) the act orpractice is reasonably likelyto result in a consumer’s inability tounderstand the termsandconditionsofafinancialproductorserviceortoprotecttheirowninterestsinselectingorusingafinancialproductorservice;and(2)thewidespreaduseoftheactorpracticeisreasonablylikelytocontributetoinstabilityandgreaterriskinthefinancialsystem.TheSenate bill had adifferent standard, e.g.,withno systemicriskfactor.Bothversionsincludedauthoritytorestrictconsumer

creditarbitration,andtheDodd-FrankActincorporatesthisandprohibitsitoutrightinsomecircumstances.52Bothversions(andthefinalbill)restrictprepaymentpenaltiesandamendtheTILAtorestrict,butnotentirelyeliminate,yield-spreadpremiums. Likeprior law,theDodd-FrankActrequiresmortgagelenderstoverifyaconsumer’sabilitytorepaytheloan,withapre-sumptionofrepaymentabilityifthecreditorusesafully-indexedrate, subject to exceptions for loans with certain features. TheCFPB has extensive power to issue further regulations, orders,andguidanceontheseandrelatedissues. ProfessorSovernthendescribedtheexclusionsfromtheDodd-FrankAct.TheentitiesexcludedfromdirectCFPBsuper-visoryjurisdictioninclude:

• retailerswhodon’tselltheirdebt;• debtcollectionbycreditorsthatdon’tselltheirdebt

(asundertheFDCPA);• smallFDIC-insuredbanks;• realestateagents;• lawyers;and• certaincategoriesofautodealers.

However,someoftheseentities(e.g.,smallbanks)aresubjecttothesubstantiveregulationsissuedbytheCFPB(e.g.,TILA)eventhoughenforcementandsupervisionare largely limitedtostateandfederalbankregulatoryagencies. TheCFPBcannot imposenewusury limitsor require“plain vanilla” products. The Dodd-Frank Act also reduces thepreemptionauthorityoftheOCCandOTS.53

B. Rationale for the Dodd-Frank Act Jim Hawkins discussed the background and rationalefor the Dodd-Frank Act. This included arguments that therewere toomanyfinancial regulatoryagencies,creatinga“race tothebottom”intermsofsupervision.However,healsonotedthatsupervisionremainssomewhatdispersed(e.g.,forbanksandautodealers),andsubstantiverule-makingauthoritywasalreadycen-tralized (e.g.,TILA at theFRB).Moreover, itmaybe easier tohave major industry players “capture” a single agency.To yourauthor,itissomewhatsurprisinghoweagerthestates(andtheirelectedrepresentatives)havebeentoturnoversuchcomprehen-siveauthoritytoafederalagencywithnewpreemptionauthority(thoughIrecognizetheapparentlimitsonthatpreemptionandtheexpectedconsumer-friendlyresults,itcansurelybeconcededthattheselimitsandresultsarenotabsoluteorinevitable). Of course, as noted by Professor Hawkins, the statedandmostimportantrationalefortheDodd-FrankActwastopre-vent another economic meltdown like that of 2007-2010, andprotect consumers from poor credit decisions. If private credittransactionscauseexternalharm,thisisapolicyreasontoregu-lateandpreventthem.Thisappliestomortgagesandcreditcards,but why were payday lenders included? The answer of courseis that the Dodd-Frank Act became something of a Christmastreeofprovisionsfavoredbythosewhowanttorestrictaccesstocertainformsofconsumercredit.Thereissomeironyinthis,asthe“meltdown” itself is characterizedby sucha reduction (e.g.,asmanyhomeownershavebeenunabletorefinanceorselltheirhomes,andareconsequentlyinforeclosure). Professor Hawkins noted that credit cards are yet an-other matter, as they somewhat divorce the credit transactionfromthespecificpurchase,andalsoallowcredittermstobefinelytunedtoreflecttherisk,basedonacreditscore,therebyallowinganexpansionofcreditavailability.Theamountofpotentialdebtis veryhigh, and there isnoguaranteeof abilityorwillingnesstorepay.Thus,thereissomepotentialmacro-economicimpact.Payday loans, pawns and title loans,however are verydifferent--thesecoververyspecificitemsandlimiteddebtamounts(asset


orincome-based),andarestructuredforpaymentfromcollateralorregularincome(therefore,e.g.,itisimpossibletotakeonexces-sivepawndebt).ThestatedrationalefortheDodd-FrankActandCFPBfailsinthiscontext. InpassingtheDodd-FrankAct, theroleofbehavioraleconomicswasnot emphasizedpolitically. It is anobvious fac-tor,butitwasnotdeemedpoliticallyuseful(perhapsbecauseitemphasizestheneedtoconstrainconsumers’accesstocredit,atatimewhenreducedcreditavailabilityisatthecenterofthecur-rentcreditcrisis).54

C. Payday Lending Nathalie Martin of the University of New MexicoSchoolofLawinAlbuquerquecontinuedthediscussionofpay-dayloans,asking:Doconsumersunderstandpaydayloans?Herarticleinthe2010Programbookanswersthequestion:No.55Thebiggest problem she identified is rollover; she said thebusinessplanistokeeppeopleindebt,notrepayment.Shereportedthatarecently-enactedNewMexicolawpurportedtolimitthechargesonpayday loans to417percent and toprevent rolloverbut inrealityhadlittleeffectoninterestratesbecausetheloanscoveredby the new law were defined as those that were 14-35 days induration,orthoseinvolvingpost-datedchecksorautomaticdebittransactions.Shesaidtheindustrysimplybeganofferingnewloanproducts outside this definition the next day. Professor Martincitedthefollowingasproblemswithpaydayloans:

• rollovers;• multipleloans;• highfees;• unclearterms;and• thesocio-economicstatusofcustomers(Professor

Martin noted that the industry claims a middleclassclientele,butshedisagreed).

ShesaidthatmostofmiddleAmericadoesnotknowaboutthisindustryandseemstohavenoideathatpeopleborrowmoneyat500or600percent interest,or that such loansare legal.Manypeople seem to think there are stillusuryand fee caps inmoststates,whichisuntrueformanysmallloans.Thetypicalloanis$400-500untilpayday,witha$100fee.Thecustomercanthenpay interestonly (e.g.,$100)every twoweeks.Another trick istooffertheconsumermoremoneyuponrenewal.Thecustomersoon loses the ability to repay. Some consumers have multipleloans. Payments received by the creditor over a two or two-and-a-half month period often repay the loan principle; there-after, tothisextent, there isnorisktothe lender.Defaultratesarelowduetoaggressivecollectionefforts.ProfessorMartinsaidtheseloansshouldbecurtailedbytheCFPB. ProfessorMartinalsonotedthattheindustrydoesnotbelievetheyshouldevenbegovernedbytheCFPB,because,(asnotedbyProfessorHawkins)theyargue:Paydaylendingdidnotcause thefinancial crisis; theCFPBwill put themoutofbusi-ness;andtheindustryprovidesshorttermemergencyloansthatconsumersneed(andpeoplewillbehurtbyalackofaccess).Sheopinedthat,whileshealsoisworriedaboutwherepeoplemightgoforcashifallthesesourcesdryup,noneofthesearevalidrea-sonstoavoidregulationandprotectionofconsumers. D. Questions and Comments Inresponsetoaquestionfromtheaudience,ProfessorSovern furtherdiscussedpreemptionbytheCFPB,asprovidedintheDodd-FrankAct.56HenotedthatthiscodifiesMarquette(credit cards) andCuomo.57Preemption re statebanks is some-whatlessclear,butclearlythereisapotentialforcontinuing,orevenincreasedpreemption.

ArnoldRosenbergcommentedonpaydaylending,not-ingthataUniversityofChicagoBusinessSchool studyshowedthat “de-biasing”disclosures,by juxtaposing the costofpaydayborrowingandthecostofborrowingthesameamountonacreditcard,reducedpaydayborrowingbymorethantenpercent.58ButProfessorMartinrespondedthat,ifso,thisdefeatstheargumentthat payday loans are necessary for emergencies. Jim Hawkinsaddedthatmoststudiesindicatethatdisclosureisnotenoughtoprecludepaydaylending,becausetheemergenciesarereal.Profes-sorMartinarguedthattheonlyeffectiveanswer,inlightoftheindustry’send-runaroundwhateverstatutesarepassed,mightbeanabsoluteusurycap.ButProfessorHawkinsrespondedthatthisistantamounttoafullban,e.g.,inNewYorkthereisathirty-sixpercentcapandnopaydaylending.59 Anotherparticipantasked:Howcanpoliticalinfluencebe limited at theCFPB, e.g., on issues like arbitration?Profes-sorSovernnoted that thefive-year termof theCFPBDirectorisdesignedtolimitthis.Ofcourse,onecanneverbesureaboutsuchthings--andthehistoryofsuchmattersisnotentirelyen-couraging,fromanyperspective.So,itwillbeinterestingtoseehow this works out. At best, increased uncertainty, unforeseenconsequences, andpolicyvolatility seem likely,with thepoten-tial formajorchangeseveryfiveyearsorso.It isnotclearhowthirty-year transactions (e.g., mortgage loans) can be prudentlyconductedinsuchanenvironment,butmaybethatdoesnotmat-terasvirtuallyallsuchloansarenowbeingfundedbythegovern-mentanyway.60ProfessorMartinsaidthat,withregardtopaydaylending,thereisnomorerent-a-charter,butnationalbanksnowdothisdirectly(e.g.,throughoverdraftprograms),andgenerateconsumer demand by marketing. This may change under theCFPB.Butatleasttheseareshort-termtransactionsthatcanbequicklycurtailedbasedonchangesinthelaw,withoutwidespreadmacro-economiceffect.Thesamecannotbesaidwithrespecttomortgagelending. Jeff Sovern noted that there is no private right of ac-tionintheDodd-FrankActorCFPBregulations,butasunderpriorlawstateUDAPstatutesmayprovidesuchanaction,andindividuallawsprovideremedies,e.g.,TILA;alsothereisthepos-sibilityofstateAttorneyGeneralenforcementactions(enhancedundertheDodd-FrankAct).

XII. View from the Trenches A. Supreme Court Litigation Deepak Gupta, with the Public Citizen LitigationGroup (Public Citizen) in Washington, D.C., noted that thelitigationbranchofPublicCitizenwasfoundedbyRalphNad-er some fortyyears ago.PublicCitizenhelps consumer lawyersaroundthecountry,tooffsetthespecializedSupremeCourtbarin Washington, D.C. He said that consumer advocacy interestgroups typically don’t focus on the certiorari stage of SupremeCourtlitigation;thisisaspecializedareawhereconsumerlitigantsneedhelp.Thisexpertiseisimportant,e.g.,tokeepcasesoutoftheSupremeCourtwheretheCourtisknowntobehostile(e.g.,arbitration).PublicCitizenalsoconductsmootcourtproceedingstohelppreparelitigantcounselfororalarguments. RecentSupremeCourtcasesincludeJerman,61holdingthat there is no defense for a mistake of law in the Fair DebtCollectionPracticesAct,62butalsothattherearenodamagesfortechnical violations.63 Public Citizen thought that this was thewrongcase,withbadfactsfortheconsumer,anddeclinedtohelpwiththepetitionfor certiorari,buthelpedonthesubstance.Theconsumer then won, despite the adverse facts. But there was astrongdissentraisingissuesthatremainproblematicforconsumerplaintiffs.


Other recent cases of interest include Stolt-Nielsen64(involvingtherighttoclassactionarbitration;holdingthatclassactionarbitrationscannotbeimposedabsentbothparties’agree-ment);andRent-a-Center65(involvingtherightofanarbitratortodecidethevalidityofarbitration;notyetdecided).Anotherunre-solvedissueiswhetherastatecanstrikedownaclassactionbanonunconscionabilitygrounds(atthetimeofthe2010Program,thiswasonappealfromtheNinthCircuit). In the Milavetz case,66 attorneys were deemed to beBankruptcyCode“debtreliefagencies”underthe2005BAPCPAamendments,andthereforecannotadvisedebtorstoincurdebt.

XIII. Conclusion Thebroadscopeofthe2010Programandthediverseviewpoints presented are apparent from this report. Academ-ics,legalservicesattorneys,clinicians,andpractitionersfromallovertheUnitedStatesandnumerousothercountries,represent-ingsometimesdramaticallydiverseculturesandviews,gatheredto discuss common and unique issues, practices, prospects andproblems. This itself is unusual (and certainly commendable),giventhatsomanylaw-relatedprogramsaredevotedtoasingleperspective and lack this intellectual diversity.Theparticipants’contributionstothisarticlefurtherevidencethisdiversity,andarecommendablegiventhestrongdisagreementsonmanyoftheseissues.Moreover,thecommentsofparticipantsduringthe2010Programweregenerallycivilandrestrained;thisisatestamenttotheparticipantsandtheacademicenvironmentfosteredbyDeanAldermanandtheUniversityofHoustonLawCenter. Asonewouldexpectfromanysuchgathering,however,somediscordwasevident.Inthisenvironment,disagreementsovermattersrelatingtoteachingandlegaleducationingeneralareadd-ed todifferingperspectivesonpublicpolicy, current events, andtheroleoflaw.67Forexample,thereappearstobesomepotentialfortensionbetweenclinicalanddoctrinalteaching,anditisalwaysachallengetomaintaincivilityinfacultyrelations,68perhapsevenmoresowhenthefacultyconsistsoflawyerstrainedinadvocacy.69The increasing roleofclinics in legal education,with their focusonadvocacyaswellaseducation,bringstheseissuesintofocusandultimatelymayresultinare-examinationofthetraditionalhierar-chiesinlegaleducation,assuggestedduringthe2010Program. Asindicatedinthisreport,thepresentationsandrelateddiscussionsatthe2010Programwerewide-ranging.Despitethisbreadthofcoverage,however,thegorillaintheroomremainedthecontinuingcreditandeconomiccrisis,andtheU.S.solutionasil-lustratedby theDodd-FrankAct andCFPB.There is nodoubtthat fundamental change has now arrived. Now the question is:Whathappensnextandhowdowe,asteachers,helpthestudentsexploreandunderstandit?Whileperhapsnotprovidingdefinitiveanswerstoeveryaspectofthisquestion,the2010Programcertainlyilluminatedtheissuesincontentionandtheirrolesintheclassroomenvironment.Asalways,therestisuptous,aslawteachers. YourauthorwouldagainliketothankRichardAlderman,theUniversityofHoustonLawCenter,andtheothersponsorsofthe2010Program,forprovidingaplatformallowingusaslawfac-ultyandotherinterestedpersonsto“vent”asnotedinthisarticle,andwouldalsoliketoagainthankthe2010Programparticipantsforassistingwiththisarticledespitetheobviouspointsofdisagree-mentwithrespecttomanyoftheissuesbeingdiscussed.

*AlvinC.HarrellistheRobertS.Kerr,Sr.DistinguishedProfes-sorofLawatOklahomaCityUniversitySchoolofLaw,whereheteachescoursesinbankruptcy,commercialpaperandbankdepos-itsandcollections,electroniccommerceandconsumerlaw.

1 TheConferenceChair for this and thepriorprogramswas

UniversityofHoustonLawCenterAssociateDeanandDwightOlds Chair in Law, and Director of the Center for ConsumerLaw,RichardM.Alderman.See http://www.law.uh.edu/ccl/.The2010Programmaterialsareavailableoncompactdiscfromthissource.Id.2 ThefirstprogramintheserieswasheldinMay,2002.See,e.g.,AlvinC.Harrell,Teaching Consumer Law,6J.Tex.ConsumerL.50(2003).3 See supranote1.Fordescriptionsof theotherprograms inthis series, see:Harrell, supranote2;AlvinC.Harrell,Teaching Consumer Law, Part Two,8J.Tex.ConsumerL.2(2004);AlvinC.Harrell,Teaching Consumer Law, Part Three,10J.Consumer&Comm.L.46(2006);andAlvinC.Harrell,Teaching Consumer Law, Part Four,12J.Consumer&Comm.L.8(2008).4 Seediscussionbelowanddescriptionsofpriorprograms, inthesourcescitedsupraatnotes2and3.5 See, e.g., infra PartV.; and, as othershavenoted, there areinternationalimplications.See,e.g.,infraPartVII.B.6 See,e.g.,DeanAlderman’scommentsat the2010Program,describedinfraatPartIX.7 See,e.g.,infraPartVII.Againtherearealsointernationalim-plications.See,e.g.,infraPartsIV.andVII.8 Butsomedo;seeremarksofProfessorLittwin,notedbelowatPartII.C.9 AlvinC.Harrell,The Great Credit Contraction: Who, What, When, Where and Why,26Ga.St.Univ.L.Rev.1209(2010).YourauthorappreciatestheinvitationfromProfessorMarkBud-nitztoparticipateinthislawreviewsymposium,andhopesthatMark’scredibilityamonghisadvocacycolleaguesdoesnotsufferasaresult.Yourauthoralsorecommendstothereaderareviewof theother articles in theGeorgia State University Law Reviewsymposium.10See id.11Whilepermittingmyselfanobservationthat, inmyexperi-enceandfocusingonabroadscope,FRBmonetarypolicyprob-ably was the single most important factor and mortgage fraudprobablywastheleast.12See,e.g.,KathleenE.Keest,Consumer Financial Services Law and Policy: 1968-20?? In the Thick of the Battlefield for America’s Economic Soul,26Ga.St.Univ.L.Rev.1087,1091-92(2010)(ForewordtotheSymposiumnotedsupraatnote9)(listingfac-torsunderconsiderationby the federalFinancialCrisis InquiryCommissionaspossiblycontributingtothe“financialandeco-nomiccrisis.”).13See infraPartX.C.14Amoreextensivedescriptionofthecourseisincludedinthe2010Programmaterials.15See also discussionsupraatPartII.B.16ProfessorJohnson’sportionofthe2010Programmaterialsin-cludesdiscussionandcitationsfortherelevantstatutesandcases.17See,e.g., infranotes24-27(referencingrelevantlegalauthorityandthe2010Programmaterials).18 See 17 U.S.C. § 1322(b)(2); Irena Damnjanoska, Update on Avoidance of Subordinate Home Mortgage Liens in Chapter 13 Bankruptcy Cases,64ConsumerFin.L.Q.Rep.57(2010).19See, e.g.,MayaP.Hill&ThomasA.Hill,Bankruptcy Code Section 1325: 910 Day Creditor Claims in the Post-BAPCPA En-vironment,61ConsumerFin.L.Q.Rep.587(2007);AlvinC.Harrell,Did the Seventh Circuit Make the “Wright” Decision in Resolving the BAPCPA “Hanging Paragraph”?,id.,at598;Damn-janoska,supranote18.20But seeBeachv.OcwenFederalBank,118S.Ct.1408(1998).21The2010ProgrammaterialsincludearelatedmemorandumbyProfessorHowells.22CopiesofDr.Osuji’spower-pointpresentationareincluded


inthe2010Programmaterials.23CopiesofProfessorWebb’spower-pointpresentationarein-cludedinthe2010Programmaterials.2415U.S.C.§§1601-1666j(2010);RalphJ.Rohner&FredH.Miller,TruthinLendingCh.8(2000&2009Suppl.).25See15U.S.C.§1635(a);FRBRegulationZ,12CFRpt.226,at§226.15(a),(f )(2010).26See,e.g.,LeaKrivinskasShepard,It’s All About the Principal: Preserving Consumers’ Right of Rescission Under the Truth in Lend-ing Act,89N.Car.L.Rev.[forthcoming](2010),asincludedinthe2010Programmaterials.27Yamamoto v.BankofNewYork, 329F.3d1167 (9thCir.2003).28 15 U.S.C. § 1679. See, e.g., Eugene J. Kelley, Jr., John L.Ropiequet&AndreaJ.Durkin,The Credit Repair Organization Act (CROA): The “Next Big Thing?”,57ConsumerFin.L.Q.Rep.49(2003).29ProfessorGreenfield’s2010ProgrammaterialsincludeacopyoftheUDMSA,withReporter’scomments,aswellasacopyofproposedfederallegislation(S.3264).30See generallyAshleyHarrell,Mortgage Rescue Fraud and the Subsequent Purchaser,64ConsumerFin.L.Q.Rep.[forthcom-ing](2010).31 FTC, Telemarketing Sales Rule, Proposed Rule, 74 Fed.Reg.41988and42017(Aug.19,2009);FTC,MortgageAssis-tanceReliefServices,ProposedRule,75Fed.Reg.10707(Mar.9,2010)(bothrulesareincludedinProfessorGreenfield’s2010Programmaterials).See alsoFTC,TelemarketingSalesRule,FinalRule,75Fed.Reg.48458(Aug.10,2010);JohnL.Ropiequet&JasonB.Hirsh,The 2010 Amendments to the Telemarketing Sales Rule: Expanding FTC Regulatory Oversight to Debt Relief Services,64ConsumerFin.L.Q.Rep.[forthcoming](2010).32See supranote29.33ProfessorVukowichcitedImpericalDiscountCorp.,38Misc.2d187,238N.Y.S.2d269(1963).See alsoUCCArticle9Part6.Copiesofbothareincludedinthe2010Programmaterials.34See,e.g.,11U.S.C.§506;Damnjanoska,supranote18.35See,e.g.,11U.S.C.§§522(f ),544-548,and1322(b(2);supranote18.36SeeJ.Luzak,You Have Been Warned! . . . Really?,inthe2010Programmaterials.37 Doctoral researcher at the Erasmus University RotterdamSchool of Law in the Netherlands. Within the framework ofthe“BehaviouralApproachtoContractandTortLaw”researchprogramme,herthesisconcerns“Transparency,accessibilityandsimplicityofconsumercredit informationinordertoempowerconsumers:turningtheoryintoreality.”38Directive2008/48/EConCreditAgreementsforConsumers,repealingCouncilDirective87/102/EEC(EuropeanConsumerCreditDirective)enactedin2008,wasexpectedtobeimplement-edonJune11,2010.39Copiesofthepower-pointslidespresentedbyGarciaarein-cludedinthe2010Programmaterials.40The2010Programmaterialsincludereportsonthebehavioralstudiesnotedhere.41ProfessorBudnitzcitedasanexample:FederalTradeCommis-sionv.FTNPromotions,Inc.,Civ.No.8:07-cv-1279-T-30TGW(M.D.Fla.Dec.30,2008)(StipulatedOrderforPermanentIn-junction).42TheBureauofConsumerFinancialProtection(CFPB)wascreatedbyTitleXoftheDodd-FrankAct.See infraPartXI.andnotes50-53.43Id.44Anexampleofsuchahandoutisincludedinthe2010Pro-grammaterials.

45See,e.g.,Ranzyv.ExtraCashofTex.,Inc.,2010U.S.Dist.LEXIS22551(S.D.Tex.Mar.11,2010)(clausesnamingNAFinvalid).46S.931;HR1020.47See,e.g.,Dodd-FrankAct,infranote50,§1028.48The2010Programmaterialsincludematerialsdescribingthecourse,suchasacoursesyllabus,“PolicyandProceduresMemo-randumforLitigationStudents,”anda“RequiredCaseFileOr-ganization”memo.49See,e.g.,Kelley,Ropiequet&Durkin,supranote28.50HR4173,Pub.L.No. 111-203, 124Stat. 1376 (July 21,2010).Theslides forhis talkcanbeviewedathttp://pubcit.ty-pepad.com/clpblog/2010/05/comparing-the-senate-and-house-cfpab-bills.html,andareincludedinthe2010Programmaterials.51See supranote50.SeealsoRobertA.Cook&MeghanMus-selman,Summary of the Mortgage Lending Provisions in the Dodd-Frank Wall Stteet Reform and Consumer Protection Act,64Con-sumerFin.L.Q.Rep.231(2010).52See sourcescitedsupraatnotes47and50-51.53See alsoMatthewDyckman,MatthewS.Yoon&JohnP.Hol-ahan,Financial Regulatory Reform - The Dodd-Frank Act Rolls Back Federal Preemption,64ConsumerFin.L.Q.Rep.129(2010).54Thereisalso,ofcourse,theimpactontheissueofpartyau-tonomy,anissuenotwidelyaddressedatthe2010Programbutdiscussed at the preceding (2008) program. See, e.g., Alvin C.Harrell,Teaching Consumer Law, Part Four,12J.Consumer&Comm.L.8,19(2008).55 See Nathalie Martin, 1,000% Interest-Good While Supplies Last: A Study of Payday Loan Practices and Solutions,inthe2010Programmaterials.56See also suprathistextandnote53.57See,e.g.,Dyckman,et al,id.58 Marianne Bertrand & Adair Morse, Information Disclo-sure,CognitiveBiasesandPaydayBorrowing,available athttp://www.fdic.gov/bank/analytical/CFR/bank_research_conference/annual_9th/Morse_A.pdf.Ofcourse,noteverypaydayborrowerhasaccesstoacreditcard.59See alsoFredH.Miller,Prime Interest Rates for Subprime Bor-rowers?,26Ga.St.Univ.L.Rev.1259(2010).60See,e.g.,Harrell,supranote9,at1210n.3and1238-48.61Jermanv.Castle,130S.Ct.1605(2010).62See15U.S.C.§1692k(c)(bonafideerrordefense).63Jerman,130S.Ct.at1620-21.64Stolt-NielsenS.A.v.AnimalFeeds InternationalCorp.,130S.Ct.1758(2010).65Rent-A-Center,West, Inc.v. Jackson,130S.Ct.2772,177L.Ed.2d403(2010).66Milavetz,Gallop&Milavetz,P.A.v.U.S.,130S.Ct.1324(2010).67ForanicerecentdissertationonthehistoryofanddifferingapproachestolegaleducationandtheroleoflawintheUnitedStates,seeStephenR.Alton,Roll Over Langdell, Tell Llewellyn the News: A Brief History of American Legal Education,35Okla.CityUniv.L.Rev.339(2010).68OneisremindedagainofPresidentWoodrowWilson’scom-menttotheeffectthatacademicpoliticsarevicious.SeeMichaelA.Olivas,The Inception of Modern Professional Education: C. C. Langdell, 1826–1906 (review),81J.HigherEduc.547(2010).69See,e.g.,GeneA.Marsh,Ethical Responsibilities in Teaching Consumer Protection Law,60ConsumerFin.L.Q.Rep.11(2006)(notingtheriskthataConsumerLawcoursewillbecomeanex-ercise inone-sidedadvocacy); see also Harrell, supranote54,at9-10, and18-19 (describingdiscussionsof similar issues at the2008Houstonprogram).

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