October 12, 2016
The United States Court of Appeals for the District of Columbia issued a decision in PHH Corporation v. Consumer Financial Protection Bureau, No. 15-1177 (October 11, 2016), that found an important aspect of the structure of the CFPB to be unconstitutional: the insulation of the Director from Presidential supervision. While this decision will almost certainly be appealed, even if it is upheld, it will allow the the CFPB to continue functioning much as it has.
I was interviewed about the decision on NPR’s All Things Considered in a segment titled, Appeals Court Orders Restructuring Of Consumer Financial Protection Bureau (audio available). The transcript reads,
AUDIE CORNISH, HOST:
A federal appeals court has mandated big changes to the Consumer Financial Protection Bureau. The three-judge panel says the consumer watchdog agency is set up in a way that’s unconstitutional. In its ruling, the court says the agency will have to restructure. NPR’s Yuki Noguchi reports.
YUKI NOGUCHI, BYLINE: The suit was brought by a mortgage lender called PHH, which asked the court to invalidate a $109 million enforcement action against it and scrap the agency, too. The D.C. Court of Appeals sent the fine back to the bureau for review.
But it also ruled that the CFPB’s director has too much power to write and enforce rules without enough oversight from another branch of government. The remedy, the panel says, is that the CFPB should fall under the president’s control. And the president should be able to remove the director at will.
The CFPB’s opponents in the financial services industry declared victory. Bill Himpler is executive vice president for the American Financial Services Association.
BILL HIMPLER: Our issue is still with the authority given to a single director. That is, as the court pointed out, not subject to a lot of oversight.
NOGUCHI: Himpler instead supports a CFPB run by a bipartisan commission, similar to others like the Securities and Exchange Commission. David Reiss, a law professor at Brooklyn Law School, says the ruling is not an existential challenge to the CFPB or its past decisions.
DAVID REISS: The decision does not invalidate the CFPB’s actions. This is more about its structure going forward.
NOGUCHI: Reiss says an appeal to the Supreme Court is all but guaranteed. Indeed, the CFPB says it disagrees with the conclusion. In an emailed statement, a spokesperson says the ruling does not change its mission and that it is, quote, “considering options for seeking further review of the court’s decision.”
Dennis Kelleher is CEO of Better Markets, a group that advocates for stronger financial regulation. He says the bureau’s actions on banks have made the financial sector more determined to undercut the agency.
DENNIS KELLEHER: They do not want a consumer watchdog on the Wall Street beat. That’s what this fight is about.
NOGUCHI: The decision was not unanimous on all the issues. Judge Karen Henderson dissented in part, saying the panel overreached in calling the bureau’s structure unconstitutional. Yuki Noguchi, NPR News, Washington.
- Childhood Housing and Adult Earnings: A Between-Siblings Analysis of Housing Vouchers and Public Housing, Anderson, Haltiwanger, Kutzbach, Palloni, Pollakowski, & Weinberg
- Housing and Mortgage Dynamics: Evidence from Household Surveys, Jansen
- Mortgage Market, Housing Tenure Choice and Unemployment, Lisli
- The Time Value of Housing: Historical Evidence on Discount Rates, Bracke, Pinchbeck, & Wyatt
October 11, 2016
Realtor.com quoted me in How to Break a Lease Early. It reads,
It’s Murphy’s Law, rental edition: You find the perfect apartment, sign the lease, move in, start to get settled in, then something happens. Maybe you get transferred to another state for work, maybe you meet the love of your life and decide to shack up together (congrats!), or perhaps your parents fall ill and you need to move closer to them.
Unfortunately life and rental laws don’t always coincide, all of which might mean you may have to entertain the idea of breaking a lease. What would happen if you do? Answers are ahead, along with some advice on how to handle this sticky scenario.
First things first: Read your lease
If you find yourself needing to break your lease, your first step should be to read it again—carefully. You could get lucky: Some leases have an “opt out” clause, meaning that you can terminate early for an agreed-upon fee. Depending on that financial amount, it might make sense for you to just pay the penalty and make a clean break, says David Reiss, academic program director for the Center for Urban Business Entrepreneurship.
Then again, some leases will say that you’re responsible for the rent due for the remainder of the term of your lease. Still, even in this worse-case scenario, you may have some wiggle room based on how benevolent your landlord is.
Talk to your landlord
If there is no opting out or the fees are too steep for you to financially absorb, it would probably behoove you to speak directly with your landlord or rental company.
“Your landlord may be willing to let you out of the lease early,” says Reiss. “You could also try to negotiate a lower amount for early termination than the lease calls for by forfeiting your security deposit.”
All in all, it never hurts to ask (and pray you catch your landlord in a good mood). It’s possible he may not mind your moving out since this means he could raise the rent sooner.You won’t know until you ask.
Find a new tenant
Another option is to offer to help your landlord find a new tenant for your apartment.
“It generally is not allowed without landlord consent, but you can discuss it with your management to see if they would consent to a sublease and under what terms,” says Reiss. You may also need to check local laws that may be applicable to subleases. If it is allowable, you might try a site like Flip, where renters can post leases they need to break in search of qualified renters who are looking for someplace to live.
Don’t just walk out
The one thing you absolutely cannot do without legal ramifications is just walk out and stop paying your rent. You won’t be trading your apartment for a cell with bars (it’s a civil, not criminal, matter), but Reiss warns you can get in a lot of financial hot water if you handle this incorrectly.
“You cannot be arrested for nonpayment of rent—unless you live in 19th-century London—but you can be sued in court; have a judgment against you; have your wages garnished; and [have] liens placed on your property to satisfy the judgment,” says Reiss.
Did we mention that this will mess up your credit scores? It will mess up your credit scores.
That said, there are a couple of cases where you could break your lease without consequences, but they are extenuating circumstances.
“If the apartment becomes unlivable—for instance, no heat in the winter—you could argue that you have been constructively evicted from the unit,” says Reiss. “Also, some states allow domestic violence survivors to break a lease in order to ensure their safety.”
- New York City’s mayor plans to change the affordable housing requirements so that more people are eligible regardless of their credit history or housing court disputes.
- Policy makers in New York analyze the sale of homes in New York that are delinquent in taxes. Public advocates found that many of the homes for sale were in extremely poor conditions which they deemed unacceptable.
October 10, 2016
In honor of the explorer’s drive to plunge into the unknown, take a look at Elon Musk’s plans to colonize Mars. They are stunning, visually and otherwise. His immediate mission objectives give you a tiny sense of the challenges he faces:
- Learn how to transport and land large payloads on Mars
- Identify and characterize potential resources such as water
- Characterize potential landing sites, including identifying surface hazards
- Demonstrate key surface capabilities on Mars
Who knows, maybe we will celebrate Columbus Day on Mars one of these years . . .
- A local Connecticut resident will not allow her home to be foreclosed by CitiMortgages, Inc. The local resident recently filed suit in a Connecticut court alleging the company has violated state and local foreclosure laws.
- An Arkansas couple will not let Bank of America and Nationstar Mortgage Holdings off the hook. The parties are in court over a dispute regarding inflated mortgages. The couple are the first to argue this case in front of a judge; however, a potential class action suit is arising.
October 8, 2016
REFinBlog has been nominated for the second year in a row for The Expert Institute’s Best Legal Blog Competition in the Education Category. Please vote here if you like what you read, or click on the image above.
The competition will run from October 3rd until the close of voting at 12:00 AM on November 14th.
Each blog will compete for rank within its category, while the three blogs that receive the most votes in any category will be crowned overall winners.
Some of the other lawprof blogs that have been nominated are
- Eric Posner Blog
- Jonathan Turley Law Blog
- Law Professors Blogs Network
- Stanford Law School Blog
- University of Chicago Law School Faculty Blog
- Volokh Conspiracy
Please vote here if you like what you read, or click on one of the images below.