Our Consumer Finance Monitor podcast continues to cover the most important industry issues. In anticipation of the American Law Institute (“ALI”) considering the Restatement of the Law, Consumer Contracts (the “Restatement”) at its Annual Meeting in Washington, DC on Tuesday, May 17, we plan to release an episode about the Restatement with guest Steven Weise, a member of ALI’s Council on Monday, May 16. Mr. Weise will be interviewed by Alan Kaplinsky, former Chair of Ballard Spahr’s Consumer Financial Services Group and a member of ALI’s Board of Advisors to this Restatement project.
The Restatement is the culmination of an 11-year effort by ALI to create a special Restatement focused on selected aspects of consumer transactions, such as when consumers will be bound by online contracts (including changes in terms) and defenses to the enforceability of consumer contracts such as unconscionability. In many instances, the Restatement’s formulation of “law” will differ from the common law of particular states. BECAUSE COURTS WILL OFTEN LOOK TO RESTATEMENTS TO GUIDE THEIR DECISION MAKING, ALL COMPANIES THAT CONTRACT WITH CONSUMERS MUST BECOME INTIMATELY FAMILIAR WITH THIS RESTATEMENT SINCE IT MAY REQUIRE IMMEDIATE CHANGES TO CONSUMER CONTRACTS. Our podcast is intended to provide a roadmap for industry to use in conforming their contracts to the new Restatement’s requirements.
This ALI project has largely flown under the radar throughout its existence. It has gotten very little media attention. That is about to change very soon if ALI’s members approve the Restatement on May 17. We are proud to be at the forefront of reporting on this enormously important development.
We will also be releasing a new podcast on Thursday of this week (May 12) on the CFPB’s recent announcement that it plans to invoke its “dormant authority” to supervise nonbanks that present a risk to consumers.