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Articles 1 - 23 of 23
Full-Text Articles in Law
The Promise And Perils Of Algorithmic Lenders’ Use Of Big Data, Matthew Adam Bruckner
The Promise And Perils Of Algorithmic Lenders’ Use Of Big Data, Matthew Adam Bruckner
Chicago-Kent Law Review
Tens of millions of Americans lack access to traditional forms of credit and must rely on payday and pawn loans instead. “Algorithmic lending 2.0” promises to enable fintech companies to lend to those excluded from traditional forms of credit. Version 2.0 algorithmic lenders claim to use Big Data and machine learning to increase credit access by making better predictions about prospective borrowers’ creditworthiness and decreasing the cost of credit. Supporters also claim that algorithmic lending 2.0 removes human bias from the financial services sector. Detractors have cast doubt on both claims, arguing that there is scant evidence that algorithmic lending …
Time Bandits: The Seventh Circuit Gets It Wrong By Allowing Debt Purchasers To Escape Fdcpa Liability For Filing Time-Barred Proofs Of Claim In Chapter 13 Bankruptcies, Jeffrey Michalik
Chicago-Kent Law Review
Debt purchasers can use debtors’ bankruptcies to profit from stale, otherwise unenforceable debt. Although state statutes of limitations bar legal enforcement of this debt, predictable breakdowns of the bankruptcy process mean that the debtor might be forced to pay anyway. Courts have determined that this scheme does not violate the Fair Debt Collection Practices Act, allowing debt purchasers to continue this scheme without repercussion.
The Rise Of Automated Investment Advice: Can Robo-Advisors Rescue The Retail Market?, Benjamin P. Edwards
The Rise Of Automated Investment Advice: Can Robo-Advisors Rescue The Retail Market?, Benjamin P. Edwards
Chicago-Kent Law Review
Different types of financial advisers serve the massive and widely dispersed retail investment market. In a market riddled with conflicts of interests, many advisers exploit retail customers by pitching suboptimal products, leading to lower investment returns and lower overall growth—but also to greater profits for the financial advisers collecting kickback-style commissions. New financial technology firms, commonly known as Robo-Advisers, may disrupt this market and these exploitative practices. Still, these potentially disruptive automated investment advice firms face significant regulatory risks.
New Art For The People: Art Funds & Financial Technology, Brian L. Frye
New Art For The People: Art Funds & Financial Technology, Brian L. Frye
Chicago-Kent Law Review
Fine art sales have reached record levels, with the global art market achieving annual sales of over $60 billion. However, the art market is extremely risky and the most lucrative investment opportunities are typically at the high end of the market. In recent years, financial industry professionals with an interest in the art world have increasingly formed art investment funds, intended to enable smaller investors to take advantage of the opportunity to invest in the art world and diversify their portfolios. Some art funds also allow art investors to borrow against certain assets. About 45 art investment funds currently exist, …
Regtech, Compliance And Technology Judgement Rule, Nizan Geslevich Packin
Regtech, Compliance And Technology Judgement Rule, Nizan Geslevich Packin
Chicago-Kent Law Review
This Article focuses on the rise of Financial Technology, which revolutionized consumer financial service products, and challenged policymakers with regulating the rapidly evolving financial industry. In particular, it explores Regulatory Technology, also known as RegTech, which is the finance industry’s use of technology, especially information technology, in the context of regulatory monitoring, reporting and compliance. RegTech is designed to solve industry needs for a more effective and efficient way to automate corporate governance and compliance processes. Not only has FinTech proven to be a vital revenue source, especially in connection with lending or money transmission services, but it also helps …
Fintech's Double Edges, Christopher G. Bradley
Fintech's Double Edges, Christopher G. Bradley
Chicago-Kent Law Review
This symposium essay examines the double-edged nature of financial technologies in financial transactions, especially transactions involving consumers. There are both benefits and risks—often undiscovered or hidden at first—in each new round of financial technologies. A FinTech tool may benefit consumers and then, applied later or in a different context, threaten consumer interests; a tool that harms consumer interests may then lead to development of a tool that favors them. This double-edged nature is an important but unappreciated structural feature of financial technologies. From the perspective of consumer protection, then, FinTech can neither be fully embraced as friend nor restricted as …
Computer As Confidant: Digital Investment Advice And The Fiduciary Standard, Nicole G. Iannarone
Computer As Confidant: Digital Investment Advice And The Fiduciary Standard, Nicole G. Iannarone
Chicago-Kent Law Review
Digital investment advisers are the fastest growing segment of financial technology (fintech) and are disrupting traditional investment advisory delivery models. The computer-led investment advisory service model may be growing particularly quickly due to a confluence of social and political factors. Politicians and regulators have increasingly focused on the standards of care applicable to investment advice providers. Fewer Americans are ready for retirement and many lack access to affordable investment advice. At the same time, comfort with digital platforms have increased, with some preferring electronic interaction over human interaction. Claiming that they can democratize retirement service by pro- viding advice meeting …
Fintech: Antidote To Rent-Seeking?, Jeremy Kidd J.D., Ph.D
Fintech: Antidote To Rent-Seeking?, Jeremy Kidd J.D., Ph.D
Chicago-Kent Law Review
Innovations in financial technology, or Fintech, has been ongoing for decades but has recently begun to accelerate. Some observers have argued that it will soon begin to outstrip the ability of regulators to keep pace. If those predictions are accurate, what would the world look like with a financial sector that cannot be effectively regulated? One possibility—drawn from public choice economics—is that rent-seeking will be inhibited or eliminated. Rent-seeking is the distortion of law and regulation for the benefit of special interests, who expend resources to guarantee those distortions in their favor. Rent-seeking is inefficient and inhibits growth and innovation, …
Madden V. Midland Funding Llc: Uprooting The National Bank Act’S Power Of Preemption, Andrew Silvia
Madden V. Midland Funding Llc: Uprooting The National Bank Act’S Power Of Preemption, Andrew Silvia
Chicago-Kent Law Review
No abstract provided.
Abstention Doctrine And The Fair Debt Collection Practices Act, Michael J. Wood
Abstention Doctrine And The Fair Debt Collection Practices Act, Michael J. Wood
Chicago-Kent Law Review
A survey of cases where federal courts abstain from hearing cases related to existing state court cases under the Fair Debt Collection Practices Act (FDCPA) reveals varying approaches and theories underlying those courts’ abstentions. This article attempts to distinguish FDCPA claims related to the validity of the underlying debt from claims arising out of debt collectors’ conduct in collecting a debt, and recommends that federal courts avoid abstaining from the latter. When Congress passed the FDCPA, it intended to provide access to a forum of the consumer’s choice to enforce their rights under the Act by serving as “private attorneys …
Third Party Funding Of Personal Injury Tort Claims: Keep The Baby And Change The Bathwater, Terrence Cain
Third Party Funding Of Personal Injury Tort Claims: Keep The Baby And Change The Bathwater, Terrence Cain
Chicago-Kent Law Review
In the early 1990s, a period of high-risk lending at high interest rates, a new entrant emerged in civil litigation: the Litigation Finance Company (“LFC”). LFCs advance money to plaintiffs involved in contingency fee litigation. The money is provided on a non-recourse basis, meaning the plaintiff repays the LFC only if she obtains money from the lawsuit through a settlement, judgment, or verdict. If the plaintiff recovers nothing, she will not owe the LFC anything. When she does repay the LFC, however, she could end up paying as much as 280% of the amount advanced by the LFC. As one …
An Economic Perspective On Subprime Lending, Michael H. Anderson
An Economic Perspective On Subprime Lending, Michael H. Anderson
Chicago-Kent Law Review
This article aims to provide a concise economic overview of several interesting subprime financing mechanisms, which are becoming increasingly common on the U.S. financial landscape. In particular, rent-to-own, payday lending, pawn broking, and (vehicle) title loans are considered. Generally speaking, a common thread with these loans is their relatively small size and short duration as well as the absence of a credit check or any of the traditional processes for determining credit-worthiness. Due to the ready availability of these loans, they appeal to low-income consumers, including the “working poor,” and to those who have suffered financial setbacks. Because the natural …
Legal Uncertainty And Aberrant Contracts: The Choice Of Law Clause, William J. Woodward Jr.
Legal Uncertainty And Aberrant Contracts: The Choice Of Law Clause, William J. Woodward Jr.
Chicago-Kent Law Review
Legal uncertainty about the applicability of local consumer protection can destroy a consumer’s claim or defense within the consumer arbitration environment. What is worse, because the consumer arbitration system cannot accommodate either legal complexity or legal uncertainty, the tendency will be to resolve cases in the way the consumer’s form contract dictates, that is, in favor of the drafter. To demonstrate this effect and advocate statutory change, this article focuses on fee-shifting statutes in California and several other states. These statutes convert very common one-way fee-shifting terms (consumer pays business’s attorneys fees if business wins but not the other way …
Females On The Fringe: Considering Gender In Payday Lending Policy, Amy J. Schmitz
Females On The Fringe: Considering Gender In Payday Lending Policy, Amy J. Schmitz
Chicago-Kent Law Review
Payday lending may provide a much-needed safety net for some consumers in need of quick cash for emergencies. However, data suggest that most payday loan borrowers become repeat users caught in a cycle of high-cost debt. Furthermore, empirical evidence indicates consistent overrepresentation of women, including many single mothers, among payday loan borrowers. This takes a toll not only on these women and their families, but also on society as a whole. Indeed, context matters in payday lending debates. It is thus time to think creatively and consider contextualized programs that aim to increase women’s and all consumers’ safe borrowing options, …
Interest Rate Caps, State Legislation, And Public Opinion: Does The Law Reflect The Public's Desires?, Timothy E. Goldsmith, Nathalie Martin
Interest Rate Caps, State Legislation, And Public Opinion: Does The Law Reflect The Public's Desires?, Timothy E. Goldsmith, Nathalie Martin
Chicago-Kent Law Review
In scholarly circles, debates about the benefits and burdens of high-costs lending are prevalent, as are debates about whether to cap interest on certain kinds of consumer loan. Despite this scholarly interest, few scholars actually know what the general public thinks or knows about interest rates on common consumer credit products. This article tries to close this gap through an empirical study of consumer attitudes about interest rates in the state of New Mexico, a state in which high-cost loans such as payday loans and title loans are ubiquitous. Our data show that the general public overwhelmingly supports interest rate …
An Economic Investigation Of Rent-To-Own Agreements, Michael H. Anderson
An Economic Investigation Of Rent-To-Own Agreements, Michael H. Anderson
Chicago-Kent Law Review
Rent-to-own (RTO) allows immediate access to goods without a credit check and provides an opportunity for eventual acquisition. Yet goods can be returned at any point without penalty or other adverse financial consequence. RTO is attractive to financially distressed consumers due to its ready availability as well as the options embedded in the contract. These options include the ability to cancel, early purchase, reinstate following a consumer return, and, possibly, choose the frequency of payments. In this article, a body of research on RTO is brought together and summarized. The bulk of this work is empirical, applying statistical techniques to …
Some Economic Insights Into Application Of Payments Doctrine: Walker-Thomas Revisited, James W. Bowers
Some Economic Insights Into Application Of Payments Doctrine: Walker-Thomas Revisited, James W. Bowers
Chicago-Kent Law Review
Contractual relations frequently involve multiple transactions, which might give rise either to a single aggregate debt, or else to multiple differing obligations. This conflict creates the application of payments problem. Unsurprisingly, the common law developed long-standing rules for the application of partial payments to multiple, but remedially distinguishable debts. The subject is made timely again by the recent enactments of the 1999 revision of Article 9 of the Uniform Commercial Code. Article 9 instructs courts how to solve the application of payments problem when some partial payments might satisfy “purchase money” security interests. The enactments repealed the common law application …
Situational Duress And The Aberrance Of Electronic Contracts, Nancy S. Kim
Situational Duress And The Aberrance Of Electronic Contracts, Nancy S. Kim
Chicago-Kent Law Review
This article explains how the aberrant nature of electronic contracts has unique implications, which contract law should recognize. Companies, taking advantage of these unique implications, may use electronic contracts in an unfair and coercive manner, which is why this article proposes expanding the definition of duress to include “situational duress.” Situational duress would not encompass all electronic contracting scenarios, but would be limited to situations where (1) a drafting company uses an electronic contract to block consumer access to a product or service; (2) the consumer has a “vested interest” in that product or service; and (3) the consumer accepts …
Are You Free To Contract Away Your Right To Bring A Negligence Claim?, Scott J. Burnham
Are You Free To Contract Away Your Right To Bring A Negligence Claim?, Scott J. Burnham
Chicago-Kent Law Review
This article explores the enforceability of the exculpatory clause—a contract term in which one party agrees to give up the right to bring a negligence claim against the other party. A spectrum of views on whether a contract containing such a clause is aberrant or not is presented and analyzed, followed by the author’s view of the rubric by which the enforceability of the clause should be measured. The article concludes by deconstructing one contract in which the clause was found.
Does State National Bank Of Big Spring V. Geithner Stand A Fighting Chance?, Devon J. Steinmeyer
Does State National Bank Of Big Spring V. Geithner Stand A Fighting Chance?, Devon J. Steinmeyer
Chicago-Kent Law Review
Two years after the start of the 2008 financial crisis and during one of the worst economic recessions since the Great Depression, Congress passed a law designed to insure a financial crisis of the same magnitude would not occur again, and if it did, it would not have the same wide-reaching effects the 2008 crisis had. The Dodd-Frank Wall Street Reform and Consumer Protection Act sought to, among other things, end “too big to fail,” consolidate the consumer protection agencies, and provide for the orderly liquidation of defaulting systematically important companies. State National Bank of Big Spring v. Geithner, a …
The Duty Of Care And The Data Control Systems In The Wake Of Sarbanes-Oxley, Michael R. Siebecker
The Duty Of Care And The Data Control Systems In The Wake Of Sarbanes-Oxley, Michael R. Siebecker
Chicago-Kent Law Review
The essay examines the wisdom of exempting small public companies from Section 404 of the Sarbanes-Oxley Act of 2002 (SOX), which requires companies to provide management assessment and external auditing of a company's internal control systems over financial data. In particular, the essay questions whether a fiduciary duty of care might require officers and directors to adopt internal control systems, perhaps substantially similar to those envisioned by SOX, even if small public companies were exempt from the ambit of the statute.
Reasons Why We Should Amend The Constitution To Protect Privacy, Deborah Pierce
Reasons Why We Should Amend The Constitution To Protect Privacy, Deborah Pierce
Chicago-Kent Law Review
Threats to consumer privacy are many, and varied. Some threats come from corporate entities such as data aggregators and social networking sites; while others come from panoptics government surveillance systems such as Secure Flight. Not only can the data be compromised, but consumers may be adversely affected by incorrect information in their files. The time may be right to explicitly protect privacy via a constitutional amendment to the U.S. Constitution.
Coding Privacy, Lilian Edwards
Coding Privacy, Lilian Edwards
Chicago-Kent Law Review
Lawrence Lessig famously and usefully argues that cyberspace is regulated not just by law but also by norms, markets and architecture or "code." His insightful work might also lead the unwary to conclude, however, that code is inherently anti-privacy, and thus that an increasingly digital world must therefore also be increasingly devoid of privacy. This paper argues briefly that since technology is a neutral tool, code can be designed as much to fight for privacy as against it, and that what matters now is to look at what incentivizes the creation of pro- rather than anti-privacy code in the mainstream …