Consumer Financial Services Basics – ABA Conference

The National Law Review is pleased to bring you information regarding the upcoming Consumer Financial Services Basics Conference sponsored by the ABA:

When

October 08 – 09, 2012

Where

American University

Washington College of Law

Washington, DC

Program Description

Facing the most comprehensive revision of federal consumer financial services (CFS) law in 75 years, even experienced consumer finance lawyers might feel it is time to get back in the classroom. This live meeting is designed to expose practitioners to key areas of consumer financial services law, whether you need a primer or a refresher.It is time to take a step back and think through some of these complex issues with a faculty that combines decades of practical experience with law school analysis. The classroom approach is used to review the background, assess the current policy factors, step into the shoes of regulators, and develop an approach that can be used to interpret and evaluate the scores of laws and regulations that affect your clients.Program FocusThis program will explain each of the major sources of regulation of consumer financial products in the context of the regulatory techniques and policies that are the common threads in a complex pattern, including:

  • Price regulation and federal preemption of state price limitations
  • Truth in lending and disclosure requirements
  • Marketing, advertising and unfair or deceptive conduct
  • Account servicing and collections
  • Regulating the “fairness” of financial institution conduct
  • Data security, fraud prevention and identity protection
  • Consumer reporting: FCRA & FACT Act
  • Fair lending and fair access to financial services
  • Remedies: regulators and private plaintiffs
  • Regulatory and legislative priorities for 2012 and beyond

Who Should Attend…The learning curve for private practitioners, in-house lawyers and government attorneys to understand the basics and changes to CFS law is very steep. This program is a great way to jump up that curve for:

  • Private practitioners with 1-10 years of experience who focus on CFS products or providers
  • In-house counsel at financial institutions and non-bank lenders
  • Government attorneys, in financial practices regulatory agencies
  • Compliance officers (who may be, but need not be, attorneys)

Consumer Financial Services Basics – ABA Conference

The National Law Review is pleased to bring you information regarding the upcoming Consumer Financial Services Basics Conference sponsored by the ABA:

When

October 08 – 09, 2012

Where

American University

Washington College of Law

Washington, DC

Program Description

Facing the most comprehensive revision of federal consumer financial services (CFS) law in 75 years, even experienced consumer finance lawyers might feel it is time to get back in the classroom. This live meeting is designed to expose practitioners to key areas of consumer financial services law, whether you need a primer or a refresher.It is time to take a step back and think through some of these complex issues with a faculty that combines decades of practical experience with law school analysis. The classroom approach is used to review the background, assess the current policy factors, step into the shoes of regulators, and develop an approach that can be used to interpret and evaluate the scores of laws and regulations that affect your clients.Program FocusThis program will explain each of the major sources of regulation of consumer financial products in the context of the regulatory techniques and policies that are the common threads in a complex pattern, including:

  • Price regulation and federal preemption of state price limitations
  • Truth in lending and disclosure requirements
  • Marketing, advertising and unfair or deceptive conduct
  • Account servicing and collections
  • Regulating the “fairness” of financial institution conduct
  • Data security, fraud prevention and identity protection
  • Consumer reporting: FCRA & FACT Act
  • Fair lending and fair access to financial services
  • Remedies: regulators and private plaintiffs
  • Regulatory and legislative priorities for 2012 and beyond

Who Should Attend…The learning curve for private practitioners, in-house lawyers and government attorneys to understand the basics and changes to CFS law is very steep. This program is a great way to jump up that curve for:

  • Private practitioners with 1-10 years of experience who focus on CFS products or providers
  • In-house counsel at financial institutions and non-bank lenders
  • Government attorneys, in financial practices regulatory agencies
  • Compliance officers (who may be, but need not be, attorneys)

FTC Proposes New Rules on Children’s Online Privacy Issues

Michelle Cohen of Ifrah Law recently had an article regarding Children’s Online Privacy published in The National Law Review:

On August 1, 2012, the Federal Trade Commission announced that is issuing a Supplemental Notice of Proposed Rulemaking to modify certain of its rules under the Children’s Online Privacy Protection Act (COPPA). Industry has been waiting on FTC action regarding COPPA, as the agency previously undertook a COPPA rulemaking in September 2011 and proposed modifying certain COPPA rules to account for changes in technology, particularly mobile technology.

The FTC received over 350 comments during that time. After reviewing those comments, the FTC has decided to propose certain additional changes to its COPPA rule definitions.

In summary, COPPA gives parents control over the information websites can collect from their kids. It applies to websites designed for children under 13 – or those that have reason to know they are collecting information from a child. It requires a specific privacy notice and that consent be obtained from parents in many circumstances before children’s information may be collected and/or used.

The FTC has proposed several changes that are of interest. Some are meant to “tighten” the COPPA rule, others are meant to provide some additional flexibility to operators.

  • The proposed change would make clear that an operator that chooses to integrate the services of third parties that collect personal information from visitors (like ad networks or plug-ins) would itself be considered a covered “operator” under the Rule.
  • The FTC is also proposing to allow websites with mixed audiences (e.g., parents and over 13) to age-screen visitors to provide COPPA’s protections only to those under 13. However, kid-directed sites or services that knowingly target under-13s as their primary audience or whose overall content is likely to attract kids under that age could not use that method.
  • Also, the FTC has proposed modifying the definition of what constitutes “personal information” relating to children to make it clear that a persistent identifier falls within that definition if it can be used to recognize a user over time or across different sites or services. The FTC is considering whether activities like site maintenance and analysis, use of persistent identifiers for authenticating users, maintaining user preferences, serving contextual ads, and protecting against fraud and theft should not be considered the collection of “personal information” as long what’s collected is not used or disclosed to contact a specific individual, including through the use of behaviorally-targeted advertising.

Comments on the FTC’s proposed rule changes are due by September 10, 2012.

© 2012 Ifrah PLLC

Consumer Financial Services Basics – ABA Conference

The National Law Review is pleased to bring you information regarding the upcoming Consumer Financial Services Basics Conference sponsored by the ABA:

When

October 08 – 09, 2012

Where

American University

Washington College of Law

Washington, DC

Program Description

Facing the most comprehensive revision of federal consumer financial services (CFS) law in 75 years, even experienced consumer finance lawyers might feel it is time to get back in the classroom. This live meeting is designed to expose practitioners to key areas of consumer financial services law, whether you need a primer or a refresher.It is time to take a step back and think through some of these complex issues with a faculty that combines decades of practical experience with law school analysis. The classroom approach is used to review the background, assess the current policy factors, step into the shoes of regulators, and develop an approach that can be used to interpret and evaluate the scores of laws and regulations that affect your clients.Program FocusThis program will explain each of the major sources of regulation of consumer financial products in the context of the regulatory techniques and policies that are the common threads in a complex pattern, including:

  • Price regulation and federal preemption of state price limitations
  • Truth in lending and disclosure requirements
  • Marketing, advertising and unfair or deceptive conduct
  • Account servicing and collections
  • Regulating the “fairness” of financial institution conduct
  • Data security, fraud prevention and identity protection
  • Consumer reporting: FCRA & FACT Act
  • Fair lending and fair access to financial services
  • Remedies: regulators and private plaintiffs
  • Regulatory and legislative priorities for 2012 and beyond

Who Should Attend…The learning curve for private practitioners, in-house lawyers and government attorneys to understand the basics and changes to CFS law is very steep. This program is a great way to jump up that curve for:

  • Private practitioners with 1-10 years of experience who focus on CFS products or providers
  • In-house counsel at financial institutions and non-bank lenders
  • Government attorneys, in financial practices regulatory agencies
  • Compliance officers (who may be, but need not be, attorneys)

Illinois Employers Beware: New Law Prohibits Employers from Seeking Social Media Password Information

The National Law Review recently published an article regarding Social Media Passwords and Illinois Employers written by Norma W. Zeitler of Barnes & Thornburg LLP:

Employers in Illinois will be prohibited from seeking social networking password information from employees and applicants starting Jan. 1, 2013, now that Illinois Governor Pat Quinn has signed into law Public Act 097-0875, which is an amendment to the Right to Privacy in the Workplace Act, 820 ILCS 55/10.

As we previously reported , the legislation makes it unlawful for an employer to require an employee or applicant to disclose passwords or other related social networking account information in order for the employer to access information that might otherwise be considered private by the employee or applicant. However, employers are not barred from accessing information that is in the public domain

Illinois becomes the second state, after Maryland, to enact such a law, according to a press release from Governor Quinn’s office announcing that he signed the legislation into law on August 1. The new law does not limit an employer’s right to promulgate and maintain otherwise lawful workplace policies regarding the use of the employer’s computer equipment, Internet use, social networking site use, and electronic mail use.

Illinois employers should consider reviewing existing policies and practices with an eye toward ensuring compliance with this new law.

© 2012 BARNES & THORNBURG LLP

‘Your Baby Can Read,’ Targeted for Dubious Ads, Closes Its Doors

An article by Rachel Hirsch of Ifrah Law‘Your Baby Can Read,’ Targeted for Dubious Ads, Closes Its Doors, was recently featured in The National Law Review:

After nearly a decade of persuading hundreds of thousands of parents that their babies were geniuses, the popular company, Your Baby Can Read, is shutting its doors. Its demise is the result of an FTC investigation prompted by the Campaign for a Commercial-Free Childhood advocacy group, which challenged claims by the company that newborns have the ability to absorb reading and spelling skills when they are as young as three months old. According to the company’s website, the cost of fighting these legal battles has left the company with no option but to close.

Your Baby Can Read consists of interrelated videos, flash cards and books designed to teach infants as young as three months old to read. Developed in the late 1990s by Robert Titzer, an educator with a Ph.D. in human performance from Indiana University, the product claims that babies have a small window in which they absorb spelling at an extraordinary pace. Although these claims have never been substantiated through any kind of credible research, fans of the products, which are priced at $200, have given them glowing reviews. More than a million families have used the products, which the company extensively advertised on TV, at exhibitions, and on its own website, Facebook page and YouTube channel.

In April 2011, a class of consumers who purchased the educational programs filed a class action complaint against the company in California challenging the effectiveness of the product. Additionally, the Boston-based Campaign for a Commercial-Free Childhood (CCFC) filed a complaint against the company with the FTC, leading the way for a series of campaigns against what critics call the “genius baby” industry. The national watchdog group previously successfully campaigned against the way that the “Baby Einstein” program marketed its products. In its complaint with the FTC, CCFC argued that Your Baby Can Read’s claims of teaching infants to read lacked scientific support. The group requested that the FTC stop the company from continuing its allegedly deceptive marketing practices and that the company offer full refunds to “all parents who have been duped.” According to CCFC director Dr. Susan Linn, the company “exploited parents’ natural tendency to want what’s best for their children” by making grandiose promises that find no support in science.

The problem with these types of educational products appears to be twofold. First, doctors and scientists who have tested the products have reportedly found that infants using the products are not reading, but rather are memorizing the shapes of the letters presented. Second, as the CCFC points out, the program can actually be harmful to children, as it encourages them to sit in front of television screens and computer monitors, getting them “hooked on screens” too early in life. In fact, the group notes that if parents follow the “Your Baby Can Read” instructions, by nine months, babies would have spent more than a full week of 24-hour days in front of a screen.

Although the company is going out of business, the FTC will not automatically cease its investigation. The FTC says it aims to protect the most vulnerable classes in society — and perhaps none are more vulnerable than young children, or, in this case, their overachieving parents who just want their bragging rights. It will be interesting to see which group of consumers will come out on top in the FTC investigation – the thousands of parents who were satisfied with the product or the class-action parents whose children were perhaps not as smart as they believed them to be.

© 2012 Ifrah PLLC

Advertising and Marketing Law Alert – Pinterest Gets Stuck With Disclosure Requirements

Recently The National Law Review published an article by Joan L. Long of Barnes & Thornburg LLP regarding Pinterest:

“Pinning” on the popular website Pinterest may amount to unlawful consumer endorsement or testimonial

Consumer endorsements and testimonials have recently garnered a lot of attention from the National Advertising Division (NAD) and Federal Trade Commission (FTC). There has been a renewed interest in assuring that advertisements containing an endorsement or testimonial are truthful and not misleading, that if an advertiser does not have proof that an endorser’s experience represents what consumers will achieve when using the product the ad must clearly and conspicuously disclose the general expected results in the depicted circumstances, and, if there’s a connection between the endorser and the marketer of the product that would affect how people evaluate the endorsement, that connection should be disclosed.

Social media websites certainly do not receive special treatment from the NAD or FTC when it comes to consumer opinion regarding products and services. This is especially true for advertisers of dietary and nutritional products. Testimonials claiming specific results usually will be interpreted to mean that the endorser’s experience is what others can expect. Statements like “Results not typical” or “Individual results may vary” won’t change that interpretation. If the results are not typical, an advertiser must clearly and conspicuously disclose the generally expected performance in the circumstances shown in the ad.

Recently NAD issued a decision regarding the newly popular website Pinterest. Pinterest is a virtual bulletin board, often described as a social photo-sharing website where users create and manage theme-based image collections by “pinning” digital content they find on the web to their personal boards. NAD began following Nutrisystem, Inc.’s weight-loss success stories pinned to such boards. These stories had express claims regarding consumer’s weight loss success, including the consumer’s name, total weight loss, and a link to the Nutrisystem website.

Testimonials which tout atypical results must be qualified by a clear and conspicuous disclosure noting the results the consumer can generally expect to achieve using the product in the circumstances depicted. Such disclosures should appear close in proximity to the claims they are intended to qualify. NAD found that it was undisputed that these pins represented consumer testimonials, and, as such, these pins should be accompanied by a clear and conspicuous disclosure noting the typical results consumers can expect to achieve using the Nutrisystem weight loss program.

Companies need to be aware that both NAD and the FTC closely scrutinize social media sites, such as Pinterest, Facebook, and Twitter. As social media websites become more sophisticated and allow for consumers to become increasingly intertwined with a company’s advertising message, companies need to have reasonable programs in place to monitor and inform members of their network of what can and cannot be said about products or services.

© 2012 BARNES & THORNBURG LLP

Consumer Financial Services Basics – ABA Conference

The National Law Review is pleased to bring you information regarding the upcoming Consumer Financial Services Basics Conference sponsored by the ABA:

When

October 08 – 09, 2012

Where

American University

Washington College of Law

Washington, DC

Program Description

Facing the most comprehensive revision of federal consumer financial services (CFS) law in 75 years, even experienced consumer finance lawyers might feel it is time to get back in the classroom. This live meeting is designed to expose practitioners to key areas of consumer financial services law, whether you need a primer or a refresher.It is time to take a step back and think through some of these complex issues with a faculty that combines decades of practical experience with law school analysis. The classroom approach is used to review the background, assess the current policy factors, step into the shoes of regulators, and develop an approach that can be used to interpret and evaluate the scores of laws and regulations that affect your clients.Program FocusThis program will explain each of the major sources of regulation of consumer financial products in the context of the regulatory techniques and policies that are the common threads in a complex pattern, including:

  • Price regulation and federal preemption of state price limitations
  • Truth in lending and disclosure requirements
  • Marketing, advertising and unfair or deceptive conduct
  • Account servicing and collections
  • Regulating the “fairness” of financial institution conduct
  • Data security, fraud prevention and identity protection
  • Consumer reporting: FCRA & FACT Act
  • Fair lending and fair access to financial services
  • Remedies: regulators and private plaintiffs
  • Regulatory and legislative priorities for 2012 and beyond

Who Should Attend…The learning curve for private practitioners, in-house lawyers and government attorneys to understand the basics and changes to CFS law is very steep. This program is a great way to jump up that curve for:

  • Private practitioners with 1-10 years of experience who focus on CFS products or providers
  • In-house counsel at financial institutions and non-bank lenders
  • Government attorneys, in financial practices regulatory agencies
  • Compliance officers (who may be, but need not be, attorneys)

The FDA Safety and Innovation Act: Much More Than Just User Fees

The National Law Review recently published an article by Hae Park-Suk and Lynn C. Tyler, M.S. of Barnes & Thornburg LLP regarding The FDA Safety and Innovation Act:

 

 

 

 

With almost no fanfare, President Obama signed the FDA Safety and Innovation Act (SIA) into law earlier this month. The popular and legal media coverage of the bill leading up to its enactment seemed to focus on the reauthorization of user fees for prescription drugs and medical devices and the creation of new user fees for generic drugs and biosimilars. As usual, the user fees are accompanied by performance goals for the FDA’s review of the related applications. But the SIA also contains a host of other provisions relating primarily to drugs and medical devices.

With respect to medical devices, § 601 of the SIA precludes the FDA from refusing to approve an Investigational Device Exemption simply because it determines that the proposed study alone will not support an approval to market the device. Section 602 refines the “least burdensome” provisions to specify that FDA can only request the “minimum required information” to support clearance or approval to market a device. Section 603 requires the FDA to document the rationale for “significant decisions” in connection with IDEs, 510(k)s, and PMAs.

Section 604 requires FDA to withdraw a draft guidance on when a modification to a device requires a new 510(k) and to submit a report to Congress on a new approach. FDA may not issue a new guidance until at least 12 months after it submits the report. Other sections require FDA to improve the device recall program, authorize clinical holds on IDEs, allow a sponsor to seek a de novo classification directly rather than only after pursuing a 510(k) and receiving a “not substantially equivalent” determination, allow FDA to reclassify a device category by administrative order, reauthorize third-party reviews and inspections, revise the Humanitarian Device Exemption to allow a manufacturer to make a profit in more circumstances, require FDA to issue a proposed rule for a unique device identification system (which it recently has), expand the drug “Sentinel” system to medical devices, add timing requirements to post-market surveillance orders, and revise the definition of a “custom” device, among other changes.

The SIA makes many changes to the regulation of drugs also. Similar to the unique device identification system, FDA must create a unique facility identification system for drug facilities and maintain an electronic database of their registration and listing information. A drug is now adulterated if it is made, packaged or stored in a facility that delays, denies, or limits an inspection. The biennial inspection schedule for drug facilities will be replaced with a “risk-based” system. FDA may require manufacturers to furnish records in advance of an inspection. FDA now has ex-US jurisdiction over any violation of the Food, Drug & Cosmetic Act (FDCA) related to an article to be imported into the US. FDA may require an importer to submit records in advance of importation showing compliance with the FDCA. FDA now has authority to detain drugs an inspection reveals may be adulterated or misbranded.

The SIA makes permanent the Best Pharmaceuticals for Children Act and its six months of marketing exclusivity in exchange for conducting pediatric studies. It also makes permanent the Pediatric Research Equity Act which requires pediatric studies for most drugs and biologics. The SIA also includes several provisions to encourage the development of antibacterial and antifungal products, including an additional five years of marketing exclusivity for a product designated by FDA as a “Qualified Infectious Disease Product.”

Other drug-related provisions include § 901 which expands the products that qualify for fast track review and the endpoints that may be used to gain fast track approval. Section 902 allows FDA to accelerate approval of “breakthrough therapies” defined as those which may show “substantial improvement over existing therapies on one or more clinically significant endpoints.” The SIA requires FDA to “implement a structured risk-benefit assessment framework in the new drug approval process.” It creates a “priority review voucher” as an incentive to develop treatments for rare pediatric diseases.

The SIA includes provisions designed to mitigate the recent drug shortages. Manufacturers are required to notify FDA at least six months, or as soon as is “practicable,” before they discontinue or interrupt manufacture of a particular drug to an extent that may cause a disruption in supply. FDA must consider the impact of any warning letter or other enforcement action on the supply of a drug. FDA must create a task force to develop and implement a strategic plan to prevent and mitigate shortages. The Comptroller General must study drug shortages and their causes.

The SIA contains several miscellaneous provisions as well. Within two years, FDA must issue a guidance on the use of the internet (including social media) to promote regulated products. FDA is to work with regulators from other nations to develop uniform, scientifically driven clinical trial standards. FDA is to research the use of nanomaterials in regulated products. FDA cannot further delay the effective date of its final rule on over-the-counter sunscreens. The SIA clarifies and modifies the time frame within which an ANDA must receive tentative approval to avoid forfeiting the 180 day marketing exclusivity. The time for FDA to respond to certain citizen petitions related to generic drugs and biosimilars is shortened from 180 to 150 days. There are changes to the conflict of interest rules for FDA advisory committees.

The SIA contains other provisions, as we have mentioned only those we thought most likely to be of interest. Anyone subject to FDA regulation may wish to investigate the act, which can be found here, more thoroughly for items of potential relevance to their business.

© 2012 BARNES & THORNBURG LLP

Still Waiting for Guidance on Informed Consent of Decisionally-Impaired Subjects

A July 11, 2012 article by Gina Kolata in the New York Times describes a recent discovery of a rare gene mutation that protects people from Alzheimer’s disease by slowing the production of beta amyloid.  Excessive amounts of beta amyloid in the brain are believed to cause Alzheimer’s.  The discovery bolsters hope that drugs, currently in development, that reduce levels of brain amyloid will prove effective in slowing the progression of Alzheimer’s.

The lack of clear guidelines for enrolling in clinical research decisionally-impaired subjects, or those who may become impaired over the course of a study  may hinder efforts to conduct trials of Alzheimer’s drugs.  In 2010, an Institute of Medicine summary  of a workshop on the state of clinical trials in the United States noted that 27% of investigators in the U.S. failed to enroll any subjects in trials in which they agreed to participate, and 90% of all clinical trials worldwide fail to enroll the target number of subjects on time and must extend their enrollment periods.  Though the federal Office for Human Research Protections and the Secretary’s Advisory Committee on Human Research Protections have considered the issue of participation of decisionally-impaired subjects in research in recent years, no guidance has been released.  Further, few states’ laws explicitly address who has authority to consent to research participation on behalf a decisionally-impaired individual.

In the absence of clear guidance, to be in the best position to participate in Alzheimer’s research and other research involving subjects who are or may become decisionally-impaired, institutions and their IRBs should develop their own policies on enrollment of and consent for decisionally-impaired subjects and subjects whose capacity may diminish over the course of a study.  Having policies in place before opportunities to participate in such studies arise will help ensure consistent and efficient review by institutions and IRBs.  Individuals who have a strong interest in participating in Alzheimer’s research studies should complete health care power of attorney documents, record their wishes in writing, and discuss them with their designated health care agents.

©2012 Drinker Biddle & Reath LLP