Week in Review

IN THE NEWS

• The U.S. Supreme Court ruled that the federal government may limit the award of retroactive disability benefits to veterans. The Court observed that the government offers benefits to veterans for “service-connected disabilities.” The Court denied a veteran’s request for retroactive benefits going back decades, concluding that federal law allows retroactive rewards, but only for one year and only if the application is submitted within one year of the veteran’s discharge.
• The Biden Administration announced actions to increase rental affordability and housing quality nationwide. The announced actions included the U.S. Department of Housing and Urban Development publishing a notice of proposed rulemaking to require public housing owners to provide at least 30-days’ notice before terminating a lease for nonpayment of rent. In addition, the U.S. Federal Trade Commission (FTC) and U.S. Consumer Financial Protection Bureau (CFPB) will collect information on practices such as algorithmic tenant screenings that can unfairly prevent applicants from accessing housing.
• The U.S. Department of Agriculture (USDA) announced a final rule that will provide protection from road development for the Tongass National Forest in Alaska. The final rule will repeal the 2020 Alaska Roadless Rule, which exempted the Tongass from roadless protections, and return to the prior version of the rule, which prohibits road construction and timber harvesting in the area. Protecting the Tongass—the largest intact temperate rainforest in the United States—from development is “key to conserving biodiversity and addressing the climate crisis,” according to USDA Secretary Tom Vilsack.
• The U.S. Food and Drug Administration (FDA) proposed new guidelines for maximum lead limits in baby food. The proposal is part of FDA’s “Closer to Zero” action plan, which aims to reduce the prevalence of toxic substances in food intended for young children. FDA’s proposal would cap lead levels at 10 parts per billion for most types of foods created for babies and young children and 20 parts per billion in dry infant cereals and root vegetables in baby food products. FDA Commissioner Robert M. Califf said that the proposed guidelines would “result in long-term, meaningful and sustainable reductions in the exposure to this contaminant from foods.”
• The Federal Communications Commission (FCC) issued a declaratory ruling that enables agencies to send Medicaid enrollment texts and calls without violating the Telephone Consumer Protection Act. The FCC’s ruling responded to a letter from U.S. Department of Health and Human Services Secretary Xavier Becerra requesting guidance on whether encouraging individuals to follow up with or enroll in state Medicaid programs by sending texts and prerecorded calls to individuals’ phones would be permissible under the Act. The Act protects individuals from unwanted solicitation by requiring consent before sending prerecorded calls or texts. The FCC confirmed that individuals who provide their phone number while applying for Medicaid consented to be contacted about enrollment eligibility, which is acceptable under the Act.
• The CFPB requested public input on the state of the U.S. consumer credit card market. A federal law requires the CFPB to review the consumer credit card market every other year to “establish fair and transparent practices related to the extension of credit.” The most recent review in 2021 found that consumers’ applications for new credit cards and satisfaction with credit card issuers decreased significantly during the COVID-19 pandemic. For the upcoming review, the CFPB called for public feedback on issues related to the practices and risks associated with different credit card issuers, product innovation in the credit card market, and consumer access to information about credit card fees and terms.
• The Farm Credit Administration (FCA) issued an advance notice of proposed rulemaking that seeks comment on whether or how to update capital requirements for the Federal Agricultural Mortgage Corporation (Farmer Mac) to ensure Farmer Mac has enough money to continue lending, even during periods of economic stress. Farmer Mac—which is regulated by the FCA—promotes access to credit in agricultural and rural communities by operating as a secondary market for agricultural real estate and rural housing loans. The FCA called for public comment on whether it should require Farmer Mac to comply with more stringent capital requirements, such as capital buffers, adopted from other existing regulatory frameworks, and, if so, what adaptations to those requirements would properly consider Farmer Mac’s unique position in agricultural and rural markets.

WHAT WE’RE READING THIS WEEK

• In a chapter in the forthcoming book, The Oxford Handbook of AI Governance, Nikita Aggarwal, postdoctoral research fellow at UCLA School of Law, analyzed the impacts of artificial intelligence (AI) and data privacy regulation in an increasingly automated financial sector. Aggarwal noted that increased use of AI in the financial sector represents conflicting ideas about data privacy. On one hand, as more personal data is processed for consumer financial decision-making, consumers lose sole control over their data, but on the other hand, more data increases the accuracy of credit scoring, which could reduce lending discrimination, according to Aggarwal. Aggarwal concluded that regulators must continue to monitor AI’s costs and benefits to consumers as its role in the consumer financial sector grows.
• In a note in the Michigan Law Review, Sarah M.L. Bender, a student at the University of Michigan Law School, described the role AI plays in election administration. Bender noted that some states use AI to automate certain processes, such as voter roll updates and absentee ballot signature verification. Bender observed, however, that AI can produce “inaccurate and biased results” due to flawed design and inadequate training. Bender urged election administrators to reduce these risks and noted that the decentralized nature of election administration nationwide may complicate efforts to do so.
• In a working paper, Daniel Solove, professor at George Washington University Law School, discussed the fiction of consent in data privacy law. Solove noted that privacy laws’ treatment of consumer consent as permission for companies to collect user data poses two problems: first, companies struggle to prove that users actually consented to the use of their private information and second, that users even have the capacity to consent to such practices in the first place. Solove cautioned that removing consent from privacy laws could reduce individual autonomy. Instead, Solove proposed what he calls “murky consent”: a “middle ground” solution in which privacy regulators impose “guardrails” on platforms. These “guardrails” include limitations on how much data platforms can collect once users have given their consent and a legal obligation to protect individuals from certain risks and harms.

EDITOR’S CHOICE

• In an essay in The Regulatory Review, Samuel Becher, professor and associate dean at Victoria University of Wellington and Yehuda Adar, law faculty at University of Haifa, argued that regulatory agencies should better screen standard-form consumer contracts to prevent consumer exploitation. According to Becher and Adar, most business-to-consumer relationships are governed by standard-form contracts that often include non-negotiable or one-sided terms, which can exploit or harm consumers. Becher and Adar posited that regulatory agencies should try to reduce harm to consumers by collecting samples of standard-form contracts, analyzing them for exploitative terms, and instructing businesses whose contracts contain the challenged terms to modify, justify, or remove them.