CFPB Signals New Leadership with $0 Budget Request (Audio)

The anonymous plaintiffs described themselves in court filings as businessmen and want the search engine to take down links to information about their old convictions, one for conspiracy to account falsely and the other for conspiracy to intercept communications. Google says it will defend the public's right to access lawful information. My guest is Craig Newman, chair of the Privacy and Data Security Group at Patterson Bell, Nap Webb and Tyler Craig.

The e use Highest Court ESTA published the Right to be forgotten in a precedent setting ruling in May. What is it exactly? June? What the European Court of Justice said was that if you're an EU resident and if there's something out there on the Internet. That and this is the words of the court, that's either inadequate, irrelevant, or excessive. An EU resident has the right to ask

Google to take that link out of its search engine results. Now, the judge in these cases has said the plaintiffs are not celebrities or politicians and have been rehabilitated since their convictions, and the cases are separate, but the issues are related. What are the plaintiff's claims here? The plaintiffs claims are that they both have criminal records about a decade old in each case, and what they've said is that these records are just tooled to be relevant anymore and they

shouldn't be subject to search results. I mean, the fallacy in the argument is that there really is no right to be forgotten, because what they're simply asking for is the search engines to remove the results. The original source data, whether it's in a newspaper or government website or news website, it's still going to remain out there in the Internet. They're simply trying to get the search engines to delete

those results when someone puts in their name. When you say there is no right to be forgotten, where does that put the EU you use highest courts decision that there is such a right. Well, that's why it's such a fallacy because what what essentially the EU Court is saying is that he used an example of walking into the New York City Public Library. Um, if you can find a book on the shelf by your own effort,

that's fine. But the EU Court basically said, look, you can't ask the librarian, you can't look in a card catalog, an index, which is essentially the search engine. But if you can find it on your own by going to a news website, you can do that. So that that's why it's almost a counterintuitive rulings. The data still remains out there in the digital ether, just a question of

how to find it. So a Google spokeswoman said, we work hard to comply with the right to be forgotten, but we take great care not to remove search results that are clearly in the public interest. What's Google's position about these old convictions. Well, I think the statistics are probably where we should start tune. It's interesting. In the about three and a half years since the High Court ruling, Google's received about two million requests to delete links for information,

and of those two million requests. They've granted about of them. That's over links that have been taken down, and they've denied at about sixty about fifty six of those requests, So a fair number of those requests are are being granted. Really, the real question for Google is applying a very ambiguous legal standard two different sets of facts. This ultimately that's a judgment call, and it begs a bigger question. You know, our search engines really well suited to make these sorts

of judgment calls. Are regulators, are courts. So what is Google saying in response? Google's view is that if these individuals are allowed to have their private their information that they believe is now outdated or embarrassing taken off search engine results, that it actually creates somewhat of a misleading impression. Because if you plug someone's name into a Google search engine in the EU and you find no results, you're going to the only inferences that there's no information out there.

So you take an example of say a doctor, and you've gotten you resident doing some diligence on whate or not they want to go to a particular doctor. That person has had some nefarious contact with the law in the past. I certainly want to know about it, and under this court ruin that doctor would have the right to petition Google and eventually the local data authorities to take that information down. So this is the first time an English court is going to decide this issue of

the right to be forgotten. But tell us about Google's battles in European courts and with privacy regulators over the principle. Just Street sure the bigger issue and they I think the bigger fight is being fought in France because they're Google is fighting with the French data protection authorities and this ultimately as a question that will be before the European Court of Justice later this year as to how

broad this right to be forgotton goes. The Google position now is that they're trying to confine these rulings to each individual country. But France's view is there should be a global right to be forgotten. So if an EU resident makes a request to delete their name or their search results from an engine, the French government wants it to be applied globally, and that I think that's a

stretch point that's going on now. George Brock, a journalism professor at City University of London said, Google has been opaque about its approach to making these decisions about taking things down that are supposedly connected to the right to be forgotten. Are there any standards that are obvious because here you have um a case where the English law is designed to rehabilitate offenders by putting these things in

the background. It's actually a clash of privacy cultures because in Europe, and there's yellow professor who's written quite a bit about that, the right of privacy is rooted in the sense of personal honor and wanting to have standing in your community, and any embarrassing search results, even if they're absolutely true, can undermine this this cultural norm. And obviously in the United States we take a polar opposite view of privacy with our free speech rights and freedom

of the press. So you really are view viewing this through the lens of two different continents with with startling different privacy norms. Just briefly about thirty seconds the trial. One trial will start on February second, on March thirteenth, So that does that mean the judge is going to be considering the actual facts in his determination of each

person's case. It's not just the broad issue right, So in each of the two separate trials June, the judge is going to have to apply this this okay legal standard from the European Court of Justice and decide in each case which involves separate businessmen whether those links are inadequate, irrelevant or excessive. And what a judge in in the UK might decide, interestingly, could differ from what a judge

in another U country might decide. So ultimately, it's a judgment judgment called that the courts are now going to have to make. All right, thank you for being here, Craig. That's Craig Newman, a partner partner at Patterson Bell Now. Last quarter, the former director of the Consumer Financial Protection Bureau, Richard Cordray, requested two hundred seventeen point one million dollars

in operating funds from the Federal Reserve. In his January seventeenth letter to Federal Reserve Chair Janet Yellen, the acting director of the Consumer Financial Protection Bureau, Nick mulaney, writes, this letter is to inform you that for second quarter of fiscal year eighteen, the Bureau is requesting zero dollars. This let's call it non request is unprecedented in the history of the consumer watchdog agency. Mulvaney also said that

all the bureau's activities are being put under review. Former Massachusetts Attorney General Martha Coakeley said, because of this shift, many state attorneys general are jumping in to fill the gap, even looking at former staffers from the CFPB to come into their offices. I think the CFPB is going to cut way back. I think you've already seen certain state ages recognize that they may try to take on some

of the efforts to protect consumers. Under the statutory scheme, ages have the authority to bring certain suits on behalf of their states and on consumers. Coakeley says New Pennsylvania a g has put in a division modeled on the CFPB, joining me Is Dallier him Andez, professor at the University of Connecticut School of Law and founding staff mender of

the CFPB Dolliate. Wilvaney writes that no additional funds are necessary to carry out the authorities of the bureau because the agency has one seventy seven point one million dollars in reserve, and he intends to spend down the reserve with expenses of about one million dollars. Does that sound reasonable, Well, I mean it sounds reasonable in the sense that this is what he wants to do to to basically, UM have the bureau do a lot less and um uh. And so if you're doing a lot less, so it

better be a lot cheaper. UM. So it's just it's it's really signaling UM, you know, not that we needed anymore UM signals really, but it's just further example of UM how much he wants to basically neuter the agency. The day before this, the CFPB announced that it was dropping a lawsuit against a group of online pay day lenders and that that suit shook the industry when it was filed last year. It gave no reasons for dropping

the lawsuit. Can you make an educated guess as to why, um? Well, on the law not really it was UM, you know, assuming their allegations are correct, it was a pretty strong case,

I thought, UM. And so that's what kind of showed the industry because that basically the lawsuit was against UM companies that had used American Indian tribes as UM you know, for lack of better term, a front um for UM for their activities and alleging basically that because UM, they were doing their work in American Indian territory, they weren't subject to state regulation, and so they could charge easers interest rates and UM and operate without licenses in those

states in which they were operating. And so that, you know, if they could do that, that's great for them. But I think the Bureau had a very good case that that UM was not uh you know, that that wasn't legal in this particular case, based on their allegations. So why are they dropping it? Well, it goes right in hand with UM their other notice UM recently that they're going to revisit the payday lending rules that the Bureau had just proposed UM just before Mulvaney became you know,

acting director. So Mulvaney is putting the entire operation of the CFPP under review. Besides the payday loans. What areas is he targeting for change or even repeal? UM? It seems like everything is up for grabs. UM. The other recent things. Then he put a hold on prepaid prepaid card rules that were actually finalized in and the Bureau had put a hold on them to basically tweak them and get more commons from the industry. UM and they seem like they were they were going to be effective

in April of this year. UM. And they would have protected consumers for very basic things, so things like if you lost the losers or have your card stolen. Um, you know, there would be some protections for you which aren't there now. Uh. They know, requiring for iters to make the accounts easily be accessible and to basically have better accounts error and resolution uh procedures. I mean that's like, that's the stuff you have if you don't have a pretty bad card, if you have a debit card or

credit card. UM. So in a way, the consumers who have these prepaid cards sent to be people who do not have regular bank accounts um. And you know they're using them as bank accounts. So they're scrapping these rules which are just um, you know, really affecting the most vulnerable among us um. Uh. And the deck collection rules are not rules. UM. They also we're doing a det collection uh information gathering and basically he scrapped that too.

So he he changed the CFPBS mission statement last month, and part of the change was adding helping consumer finance markets work by regularly identifying and addressing outdated unnecessary or unduly burdensome rules. How long? How long I mean he's say he's going to be in there at least three years. It would take a long time to undo the regulations that are in place. Now, what did I mean that has to be public, common period, etcetera. Or is it

easier than that? Well, I mean, I think you can do a lot, uh, you know, before you can do a lot in a short period of time. He's doing it already, Like so one of the things he's done is basically true UM at least I don't think it's finalized yet, but he wants to basically shut down a lot of the UM information gatherings that the Bureau is

doing UM in various ways. And so it's basically the the idea that you know, we're going to regulate by closing our eyes, covering our ears and pretending, uh that nothing's happening to avoid learning bad things some people that we should UM that we should too or we should examine because they're valuating the law. UM. So if you do, you know, if you do that and you basically choose not to bring cases that maybe meritories or perhaps not even to investigate them, you don't really need to change

all the rules. UM. You know, you're basically affecting, uh, affecting both the morale and the personnel that you get UM an agency, UM, and the institutional history. And you're also affecting how the marketplace reacts because then they think, you know, we can get away with more because the the bureau is not interested in basically checking up on us,

which is their entire purpose. UM. What he did with the changing of the miser statement it really is just another uh signaling to the agency to consumers, UM that uh, you know, this is not I'm gonna have to stop you there. We'll we'll pick this up some other time. That's Daliajimenez, professor at the University of Connecticut School of Law. Thanks for listening to the Bloomberg Law Podcast. You can subscribe and listen to the show on Apple Podcasts, SoundCloud,

and on Bloomberg dot com slash podcast. I'm June Brolso this is Bloomberg