News from the Law Professors’ Conference

I thought I could channel techno-guru Bob Lawless and blog live from the AALS program on Creditors' and Debtors' Rights, but I couldn't so here's what went on at our conference yesterday. Our own Katie Porter (Iowa) organized this year’s panel, entitled "Broke, but not Bankrupt," a provocative and entertaining program about other (non-bankruptcy) laws affecting the down and out. Other panelists included Ronald Mann (Columbia) of credit card fame, Richard Alderman (Houston) who runs the FABULOUS consumer law conference at Houston every other May, and the always informative and entertaining consumer law maven Cathy Mansfield (Drake). Topics ranged from arbitration clauses that hurt consumers (and most do since according to Richard, businesses win 97% of the cases against consumers that go to arbitration, consumers have a hard time finding lawyers for arbitration, and businesses choose the arbitrators), race and the sub-prime crisis (lawyers should consider using the equal credit opportunity act to deal with credit discrimination, or as Cathy called it, credit apartheid), solutions to the sub-prime crisis, securitization, and fair debt collection or a total lack thereof (as Ronald pointed out, it is far more profitable to violate the collection laws than to comply with them).

If you missed the conference, you can order the tapes from the AALS (e-mail me if you don’t know how) because this was a great program. There is too much to revisit here, but here are a few highlights and interesting facts from the program.

The group discussed how preemption makes it difficult for states to protect consumers, how the consumer credit counseling and repair agencies are still out there defrauding people, and how creditors are getting away with garnishing federally exempt public benefits. Numerous solutions to the sub-prime mess were tossed around, and Ronald noted that it was obvious that not all borrowers could pay back these loans, since 8% never even make a payment.

The panelists also discussed the typical American solution to consumer creditor abuses, namely disclosure. Cathy called this a bizarre and unique method of regulating consumer debt. "As long as we tell you we’re going to screw you, we can screw you. We are the only the country in the world who regulates in this way."

Finally, there was an informative discussion about whether the middle class is in deeper trouble than ever (yes, we think so….). As the t-shirt Cathy saw proclaimed, at least the war on the middle class is going well.