When the 2010 Amendments to Regulation E to the Electronic Funds Transfer Act mandated an opt-in regime for bank overdraft programs for debit cards, the fix seemed a good solution. See, Jennifer Martin, How Your $4 Coffee Can Cost You $39 or More if You Use Your Debit Card! Federal Level Consumer Protection and Modern Payments Transactions, Memphis L. Rev. (2009). A July 2014 Study of the Consumer Financial Protection Bureau suggests that the fix may not have worked. The study found that consumers are still incurring overdraft charges in large numbers and on transactions of $24 or less. Approximately twenty percent (20%) of those consumers who do opt-in are incurring more than ten annual overdrafts. The CFPB is looking at new regulation on debit overdrafts. It would seem that at the least revisions to the model form for such services is likely. Perhaps a cap on fees might also be warranted on debit overdrafts.
Wednesday, April 8, 2015
Thursday, April 2, 2015
My annual survey of noteworthy sales cases arising under Article 2 during 2014 is now available on SSRN , 71 Bus. Law. (forthcoming Aug. 2015). There is the usual cadre of good formation cases, such as Grandoe Corp. v. Gander Mountain Co. (formation under section 2-204 based on oral agreement where buyer had its terms and conditions posted on its web site) and Nebraska Machinery Co. v. Cargotec Solutions, LLC (formation under sections 2-206 and 2-207 based upon conduct of delivery, payment and use of engines. There were also a number of good remedies cases in 2014. In particular, the case of Peace River Seed Co-Operative, Ltd. v. Proceeds Marketing, Inc. took up the difficult issue of a seller which wants to claim a market-based remedy under 2-708 after a favorable resale. While the Code is not clear on these types of resales, this case is wrong, as it fails to give full effect to the policy of limited compensation under the Code and the doctrine of mitigation.