Jason Alexander on the recent massacre

Actor Jason Alexander had this to say with regard to the recent massacre:

These weapons are military weapons. They belong in accountable hands, controlled hands and trained hands. They should not be in the hands of private citizens to be used against police, neighborhood intruders or people who don’t agree with you. These are the weapons that maniacs acquire to wreak murder and mayhem on innocents. They are not the same as handguns to help homeowners protect themselves from intruders. They are not the same as hunting rifles or sporting rifles. These weapons are designed for harm and death on big scales.

Continue ReadingJason Alexander on the recent massacre

The limits of disclosure

The Consumer Financial Protection Bureau (CFPB) recently proposed "easier-to-use mortgage disclosure forms that will help consumers make informed decisions when shopping for a mortgage and avoid costly surprises at the closing table. The aim of the CFPB is to expand protections for “high-cost” mortgage loans. Mortgage transactions are inherently complex, however. The CFPB has done some great work proposing the new forms. (to compare, here is a guide to the current version of the document many people struggle to understand, the real estate Settlement Statement -- HUD-1). One might fairly ask whether it is even possible to make these forms (which are still not simple) any easier to read or comprehend. In fact, this is the question asked by Jeff Sovern in a NYT Op-Ed piece, "Help for the Perplexed Home Buyer." Sovern applauds the excellent work of the CFPB, but then gives a brief tour of the proposed new forms:

The loan estimate, which consumers receive early in the application process, spans three pages and includes more than 100 disclosures about things like monthly payments and taxes. That’s a lot for consumers to take in, and if they use the information to comparison shop, as Congress intends, they will multiply the number of disclosures with every loan they consider. The closing disclosures, which include the final loan terms, are even longer, at five pages. . . The newest forms try to address overload by packing the most important information into the first page — but that first page includes more than 40 disclosures, and it still doesn’t tell borrowers the total amount they will pay over the life of the loan or the late payment penalty . . . There’s no way around it: mortgage transactions are complex and involve a tremendous amount of information.

Sovern suggests that written disclosures can only go so far, at least in complex transactions like these. He proposes that the problem can be lessened somewhat, but not completely cured, by making consumer counseling available. I agree with this analysis and this approach, and I also applaud the work of the CFPB. I would add that one of these reasons that this issue of communicating financial information to consumers is that so many of them are afflicted with innumeracy. I've spoken with many consumers as part of my law practice, and I must report that many of them would struggle with 4th grade math. I've had clients who have no conception of how to calculate a simple interest rate (one client couldn't tell me how much interest would accrue in one year based on $100 principal and 10% interest rate). I wish I could hold that hope that any written disclosures could solve this problem, but I assume my anecdote has already made it clear that the problem is multifaceted, involving consumer education and the policing of the mortgage industry. The above discussion also makes me wonder whether we couldn't simply the system much further, and whether path dependence keeps us in the mindset that all of these numbers need to be sprayed all over several pages. When you go to the grocery store, you ask for the price of box of cereal, and you are told a price. You are not told about all of the numbers that go into that price, such as transportation, handling, taxes, mid-level distributors, etc. I am not claiming that I have done any work on this issue of trying to simplify mortgage forms, but I wonder whether a solution might reside in forcing lenders or brokers to figure the many factors internally, and simply give the consumer a price. Then again, that is what the CPFB has done on the first page of the proposed new form. Perhaps my thinking is tainted by my conviction that many system are made to be complex in order to make them opaque to some people and profitable to others (those with teams of lawyers and accountants). Complexity is often not an accident or a necessity. It is often a tactic.

Continue ReadingThe limits of disclosure

US claims it is illegal to challenge illegal spy statute in court

We are definitely living in Orwellian times, based on the following article from the Electronic Frontier Foundation, which I am reprinting in its entirety (it is licensed by Creative Commons): EFF Challenges National Security Letter Statute in Landmark Lawsuit Since the first national security letter statute was passed in 1986, the FBI has issued hundreds of thousands of such letters seeking private telecommunications and financial records of Americans without any prior approval from courts. Indeed, for the period between 2003 and 2006 alone, almost 200,000 requests for private customer information were sought pursuant to various NSL statutes. Prior to 2011, the constitutionality of this legal authority to investigate the records of Americans without court oversight had been challenged in court -- as far as we know -- exactly one time. EFF is today releasing FBI-redacted briefing from a major new ongoing case in which it is challenging one of the NSL statutes on behalf of a telecommunications company that received an NSL in 2011. Not only does this briefing show that the Department of Justice continues to strongly protect the FBI's NSL authority, it highlights a startlingly aggressive new tactic used by the Department of Justice: suing NSL recipients who challenge the FBI's authority, arguing that court challenges to such authority themselves amount to breaking the law. National security letter statutes -- five in all -- are controversial laws that allow the FBI to easily bypass courts and issue administrative letters on their own authority to telecommunications companies and financial institutions demanding information about their customers. The NSL statutes permit the FBI to permanently gag service providers from revealing the fact that the demand was made, preventing them from notifying either their customers or the public. While the statute has many deficiencies, one of the core constitutional issues (already recognized by one federal appeals court) is that it turns the First Amendment's procedural prior restraint doctrine on its head by allowing the FBI to issue a never-ending prior restraint on its own, then requiring the recipient service provider to undertake a legal challenge. Another fundamental problem with the NSL statutes is that courts are all but written out of any part of the process: the FBI can issue demands for records and gag provisions without court authorization, and recipient telecommunications and financial companies have no way to determine whether and how the government might be overreaching or otherwise abusing its authority. Not surprisingly, given these significant structural barriers, legal challenges are extraordinarily rare. EFF brought its challenge on behalf of its client in May of 2011, raising these and other fundamental due process and First Amendment concerns about the structure of these problematic statutes. In response, the Department of Justice promptly filed a civil complaint against the recipient, alleging that by "stat[ing] its objection to compliance with the provisions of" the NSL by "exercis[ing] its rights under" the NSL statute to challenge the NSL's legality, the recipient was "interfer[ing] with the United States' vindication of its sovereign interests in law enforcement, counterintelligence, and protecting national security." While it ultimately agreed to a stay, temporarily suspending its suit against the recipient, the government has moved to compel disclosure of the subscriber information and to uphold the gag. The petition to set aside the NSL is currently pending before the United States District Court for the Northern District of California. Whether the recipient will be permitted to speak out about its specific experiences -- and whether the FBI will be permitted to issue NSLs, at least in one district -- should soon be known.

Continue ReadingUS claims it is illegal to challenge illegal spy statute in court

Proposed new law to protect bloggers from SLAPP suits

Join EFF and the Public Participation Project in calling on Congress to support the PETITION Act, strong federal anti-SLAPP legislation. The concept is simple: when a blogger faces a legal threat for legitimate online content, she can file a motion to get the case dismissed quickly. If the case is found to be frivolous in court, she won't have to pay the legal fees." Here is discussion of a meritless suit against Matthew Inman that illustrates the need for such a law.

Continue ReadingProposed new law to protect bloggers from SLAPP suits