Table of Contents

HMDA, Housing Segregation, and Racial Disparities in Mortgage Lending

Charles M. Lamb, State University of New York (SUNY) at Buffalo - Department of Political Science

Lending to Sensation-Seeking Households

Khrystyna Bochkay, University of Miami - School of Business Administration
Indraneel Chakraborty, University of Miami
Roman Chychyla, University of Miami - School of Business Administration
Alok Kumar, University of Miami - School of Business Administration

Discussion Draft of a Directive on Online Intermediary Platforms

Christoph Busch, University of Osnabrück - European Legal Studies Institute
Gerhard Dannemann, Humboldt University of Berlin - Faculty of Law
Hans Schulte-Nölke, European Legal Studies Institute Osnabrueck / Radboud University Nijmegen
Aneta Wiewiórowska-Domagalska, Universität Osnabrück - European Legal Studies Institute
Fryderyk Zoll, Universität Osnabrück

Regulating Arbitration

David L. Noll, Rutgers Law School

Australian Plain Packaging: Its Functional and Legal Flaws and an Alternative Without Them

Bojan Pretnar, Independent

Do the Second Circuit's Legal Standards on Class Certification Incentivize Forum Shopping?: A Comparative Analysis of the Second Circuit's Class Certification Jurisprudence

Shrey Sharma, Fordham University, School of Law, Students, Fordham University - Fordham Law Review


CONSUMER LAW eJOURNAL

"HMDA, Housing Segregation, and Racial Disparities in Mortgage Lending" 

CHARLES M. LAMB, State University of New York (SUNY) at Buffalo - Department of Political Science
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Housing segregation and discrimination remain tenacious problems in America. This Article first explores the passage of the Home Mortgage Disclosure Act (HMDA) of 1975 and its 1989 amendments in order to clarify their objectives and requirements for providing data to the public that potentially may be used to combat redlining and lending discrimination in the nation's housing market. Given this background, this Article then relies on HMDA data to investigate the following question: Are racial minorities in America's largest metropolitan statistical areas (MSAs) more likely to receive government-insured mortgages rather than conventional mortgages if they reside in more segregated metropolitan areas?

The analysis indicates that housing segregation has a significant negative effect on African Americans' ability to receive conventional mortgages, thereby distinguishing them from Asians, Hispanics, and whites. If African Americans are unlikely to receive conventional mortgages in more segregated areas, this suggests that in the future, highly segregated MSAs are likely to remain segregated along black-white lines and that African Americans will continue to be the mast segregated racial group in the country. Based on this analysis, the Article concludes that HMDA should be amended to require additional data from commercial banks in order to determine the extent to which lending discrimination is occurring and thus perpetuating-and possibly even increasing-housing segregation in the United States. At minimum this data should include such basic information as applicants' total financial assets, credit scores and history, number of dependents, value of the property to be purchased, and size of down payments required Banks routinely collect this data during the mortgage application process, so it should be relatively easy to include in their lending disclosure forms.

"Lending to Sensation-Seeking Households" Free Download

KHRYSTYNA BOCHKAY, University of Miami - School of Business Administration
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INDRANEEL CHAKRABORTY, University of Miami
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ROMAN CHYCHYLA, University of Miami - School of Business Administration
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ALOK KUMAR, University of Miami - School of Business Administration
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Using the propensity to engage in extra-marital activities as a proxy for sensation seeking behavior, we show that sensation-seeking households exhibit riskier economic behavior. They are more likely to obtain a home loan and, conditional upon borrowing, they choose larger loans. Banks are at least partially aware of the financial implications of sensation-seeking behavior. They supply larger credit due to higher demand, but at higher rates due to greater perceived risks. The resulting separating equilibrium has higher loan defaults as the perceived risk is realized.

"Discussion Draft of a Directive on Online Intermediary Platforms" Free Download
Research Group on the Law of Digital Services, Discussion Draft of a Directive on Online Intermediary Platforms, 5 (2016) Journal of European Consumer and Market Law 164-169 (Publishers: C.H.Beck, Nomos and Wolters Kluwer)

CHRISTOPH BUSCH, University of Osnabrück - European Legal Studies Institute
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GERHARD DANNEMANN, Humboldt University of Berlin - Faculty of Law
HANS SCHULTE-NÖLKE, European Legal Studies Institute Osnabrueck / Radboud University Nijmegen
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ANETA WIEWIÓROWSKA-DOMAGALSKA, Universität Osnabrück - European Legal Studies Institute
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FRYDERYK ZOLL, Universität Osnabrück
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The rapid growth of online intermediary platforms such as Airbnb, Uber or Amazon Marketplace has not only brought new challenges for existing business models. It has also triggered a debate on whether there is a need to adjust EU consumer and market practices law in order to take into account the changing market structure caused by the rise of the ‘platform economy’. The aim of this Discussion Draft, which has been elaborated by network of legal scholars from several European Member States, is to make a contribution to this debate.

Whether the current changes in the digital single market justify any regulatory action is an open question. The researchers involved in the elaboration of the Discussion Draft have different opinions with regard to this question and how to strike the right balance between consumer protection, market freedom and innovation. However, they share the view that the debate, which has so far been conducted on a rather abstract level, may benefit from a ‘visualisation’ that provides a clearer picture how a concrete regulatory instrument – if necessary – might look like. In this sense, the text presented here is not meant as a plea for regulation, but rather as an instrument that could give a new ‘focal point’ to the debate on the platform economy.

Most of the researchers involved in the network hold the view that if regulation is considered to be necessary, the appropriate level of regulation should be European rather than national in order to avoid obstacles to the digital single market that could arise from diverging national regulatory requirements for online platforms. Therefore the draft has been conceived as a ‘Directive on Online Intermediary Platforms’.

"Regulating Arbitration" Free Download
California Law Review, Forthcoming

DAVID L. NOLL, Rutgers Law School
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Arbitration is everywhere, as are calls to regulate its use in consumer and employment contracts. But when should Congress and federal administrative agencies do so? That is, what is the policy rationale for regulating arbitration through federal legislation and agency action? This Article reveals an overlooked set of consequences caused by the growing use of arbitration -- its impact on the implementation of federal statutory policy -- and argues that these effects should be a focus of policymakers' efforts to regulate arbitration through legislation and agency action. In hundreds of statutes, Congress has created financial incentives for private litigants to enforce the law through civil litigation. The enactment of such incentives allows litigants to assert claims that would be too expensive to prosecute under ordinary procedural rules, and, more importantly, allows Congress to calibrate enforcement of federal law. By mandating specific forms of dispute resolution procedure, arbitration can dramatically alter the returns from enforcement of statutes with incentives for private, civil litigation, and, in so doing, subvert or completely undermine congressional efforts to mobilize and calibrate private statutory enforcement. These "enforcement effects" threaten Congress's ability to accomplish substantive regulatory objectives through private, civil litigation but have received little attention. To illustrate how greater attention to them would affect efforts to regulate arbitration, the Article analyzes the Consumer Financial Protection Bureau’s proposed arbitration regulation under section 1028 of the Dodd-Frank Act and explains how it falls short of ensuring that consumer financial protection laws are enforced in the manner contemplated by Congress.

"Australian Plain Packaging: Its Functional and Legal Flaws and an Alternative Without Them" Free Download

BOJAN PRETNAR, Independent
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This study explores the potential impact of the Australian Plain Packaging Act 2011 (APPA) on public health by analyzing its functional and legal properties.

Ch. 1 is devoted to the analysis of functional properties of APPA. By preventing socially beneficial functions of trademarks, APPA is bound to generate two significant threats to public health. The first threat represents creation of an uncontrollable "brandless" tobacco market, which is bound to generate much the same harmful effects known from the black "brandless" market for illegal drugs. The second threat represents creation of chaotic situation on the marketplace called counterfeiting legalization. Bearing in mind that even noted plain packaging advocates acknowledge the "little effect" of plain packaging in the course of trade, it then follows that APPA is likely to worsen public health.

Ch. 2 is devoted to legal aspects. While Article 11 of the Framework Convention on Tobacco Control (FCTC) represents a perfectly acceptable legal basis for combating inappropriate marketing practices, it is shown that APPA extends well beyond its scope. Moreover, it contains a cardinal self-contradiction, because it unmistakably recognizes that none of prohibited tobacco trademarks is either false, misleading or erroneous in the sense of Article 11 FCTC (and in the sense of Article 6quinquies of the Paris Convention). And the analysis of APPA in respect of the TRIPS Agreement reveals that it generates a substantial impact on a much greater number of the Agreement's articles, well beyond those containing provisions on trademarks.

Ch. 3 is devoted to the analysis of the claim put forward by a leading Australian plain packaging advocate, who justifies tobacco trademark limitations in the course of trade in order to prevent their most harmful effect outside the course of trade. Though the claim is not supported by evidence and disregards the principle of exhaustion of trademarks, the main point is that the claimed harmful "biggest effect" can be effectively eliminated by an alternative solution without the need to prohibit use of trademarks in the course of trade. By this, the solution does not generate any public health threats inherent to current plain packaging regime and is fully consistent with FCTC and TRIPS Agreement.

"Do the Second Circuit's Legal Standards on Class Certification Incentivize Forum Shopping?: A Comparative Analysis of the Second Circuit's Class Certification Jurisprudence" Free Download
Fordham Law Review, Vol. 85, No. 2, 2016

SHREY SHARMA, Fordham University, School of Law, Students, Fordham University - Fordham Law Review
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The Class Action Fairness Act altered the jurisdictional landscape of class actions by relaxing the barriers to satisfying diversity jurisdiction in federal court. As a result, plaintiff attorneys frequently find themselves filing class actions in federal court, and face the critical question of where to initiate their lawsuit. Many plaintiff attorneys will consider the favorability of legal standards when determining the forum in which to file their class action. Among other substantive and procedural considerations, the applicable class certification standards of the forum are an important forum selection factor.

The Second Circuit, in particular, is a forum that plaintiff attorneys might consider due to its novel class certification standards on a range of unique areas of certification. Plaintiffs seeking certification of very discrete class actions will be mindful of the Second Circuit’s certification criteria when deciding on a forum for their class action. This Note details the Second Circuit’s class certification jurisprudence on the standard of appellate review of interlocutory appeals, satisfaction of the 23(b)(3) predominance requirement in 23(c)(4) single-issue class actions, and certification of defendant classes under 23(b)(2). This Note assesses whether these certification standards encourage forum shopping in district courts within the Second Circuit in light of the contrasting standards that other circuits have adopted on these issues.

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About this eJournal

This eJournal distributes working and accepted paper abstracts of articles, recently published articles, books, legislative reports, conferences, and other publications that address issues of interest to consumer law scholars and practitioners. Coverage includes legal issues pertaining to advertising, consumer reporting (including credit repair organizations), discrimination (including redlining), consumer disclosure (such as the Truth in Lending Act, the Real Estate Settlement Procedures Act, and consumer leasing), consumer fraud (including issues arising under the Federal Trade Commission Act, state UDAP statutes, odometer laws, referral sales, and bait and switch statutes), unconscionability, standard form contracts, consumer privacy (including telemarketing, spam, spyware, phishing, direct mail, financial privacy, common law privacy torts in consumer transactions, and online privacy), identity theft, data protection, cooling off rules (including door to door sales regulation), payment systems (such as credit and debit cards, internet payment issues, stored value cards (including gift cards and phone cards), and electronic transfers), warranties (including UCC warranties, lemon laws, and the Magnuson-Moss Warranty Act), consumer product safety, commercial speech doctrine, debt collection, repossession, predatory lending (including asset-based lending, equity stripping, flipping, balloon payments, negative amortization, loan packing, rate-risk disparities and yield-spread premiums), payday lending, usury, credit insurance, electronic shopping (including electronic signatures and records, formation of contracts, and payments), the holder in due course regulation, mortgages, student loans, repossession, foreclosure, regulation that pertains to consumer markets and enforcement of consumer laws (including class actions, preemption, arbitration, administrative enforcement, small claims courts and attorney's fees). The eJournal does not cover landlord-tenant issues or criminal law. The eJournal welcomes a broad range of methodological approaches, including conventional doctrinal analyses, law and economics approaches, historical discussions, socio-legal analyses, law and society approaches, discussions of consumer psychology that bear on legal issues, international law analyses and comparative law approaches.

Editor: Jeff Sovern, St. John's University

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Advisory Board

Consumer Law eJournal

RICHARD M. ALDERMAN
Associate Dean, Director - Consumer Law Center, Dwight Olds Chair in Law, University of Houston Law Center

JEAN BRAUCHER
Roger Henderson Professor of Law, University of Arizona - James E. Rogers College of Law (deceased)

MARK ELLIOTT BUDNITZ
Professor of Law, Georgia State University College of Law

MICHAEL M. GREENFIELD
George Alexander Madill Professor of Contracts and Commercial Law, Washington University in Saint Louis - School of Law

ALVIN C. HARRELL
Professor of Law, Oklahoma City University - School of Law

CREOLA JOHNSON
Professor of Law, Ohio State University - Michael E. Moritz College of Law

DEE PRIDGEN
Associate Dean and Professor of Law, University of Wyoming College of Law

IAIN D. C. RAMSAY
Professor of Law, University of Kent, Canterbury - Kent Law School

RALPH J. ROHNER
Professor of Law, Catholic University of America - Columbus School of Law

NORMAN I. SILBER
Associate Dean for Intellectual Life and Professor of Law, Hofstra University School of Law