The People's Lawyer Consumer News Alert
Center for Consumer Law
  Volume 49 Number 6

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The People’s Lawyer’s Tip of the Day

Never give your social security number to someone you do not know. Identity theft requires a social security number. Protect yours.  Click here for more.

Texas Consumer Laws Prevented Banking Crisis

Paul Krugman's editorial in the New York Times today compares the results of the financial crisis in Georgia with Texas, noting that Texas did not face similar problems. He states, "Why didn’t the same thing happen in Texas? The most likely answer, surprisingly, is that Texas had strong consumer-protection regulation. In particular, Texas law made it difficult for homeowners to treat their homes as piggybanks, extracting cash by increasing the size of their mortgages. Georgia lacked any similar protections (and the Bush administration blocked the state’s efforts to restrict subprime lending directly). And Georgia suffered from the difference." Krugman is correct that throughout the 1990s, Texas law prohibited home equity loans and made it difficult for consumers to get over their heads in what appeared to be low interest rate debt. What he doesn't note, however, is that Texas has since amended its law to permit home equity loans. Although the Texas law does have some consumer protections, I don't think we will fare as well in the next economic crisis. Click here for more.

Video Recording & Traffic Stops

Have you ever been pulled over? If so, you've probably never tried to record the incident on video. Pulling out a camera on an officer can be confrontational and disrespectful. At the same time, it could be extremely beneficial. Is it legal? In most states, there is no expectation of privacy in a public place (check your state laws for more information). However, if you attempt to record the incident, you should expect the officer to follow the letter of the law. You probably won't get any breaks (the law doesn't give "breaks"). Ultimately, there are many factors to consider before recording a traffic stop. To watch a video and read officer opinions on the matter,  Click here for more.

IRS: Avoid an Audit

According to the IRS, audits are on the rise. Although just over 1% of all individual returns are audited, it remains important to be very diligent when reporting your taxes. While there is no one factor that triggers an audit, there are are number of points that will increase the scrutiny of your return. For example, deductions that are very large compared to your income will likely warrant a closer look. What factors can lead to an audit? How can you avoid an audit? Click here for more.

Your Money

What is your debt-to-income ratio? Click here for more.

For the Lawyers

Arbitration ban on class action is valid. The U.S. District Court for Northern Virginia held that an arbitration agreement was valid and enforceable despite the agreement’s ban on class actions. Click here for more.


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