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Full-Text Articles in Law
The Failure Of Market Efficiency, William Magnuson
The Failure Of Market Efficiency, William Magnuson
Faculty Scholarship
Recent years have witnessed the near total triumph of market efficiency as a regulatory goal. Policymakers regularly proclaim their devotion to ensuring efficient capital markets. Courts use market efficiency as a guiding light for crafting legal doctrine. And scholars have explored in great depth the mechanisms of market efficiency and the role of law in promoting it. There is strong evidence that, at least on some metrics, our capital markets are indeed more efficient than they have ever been. But the pursuit of efficiency has come at a cost. By focusing our attention narrowly on economic efficiency concerns—such as competition, …
Predatory Fintech And The Politics Of Banking, Christopher K. Odinet
Predatory Fintech And The Politics Of Banking, Christopher K. Odinet
Faculty Scholarship
With American families living on the financial edge and seeking out high-cost loans even before COVID-19, the term financial technology or “fintech” has been used like an incantation aimed at remedying everything that’s wrong with America’s financial system. Scholars and supporters from both the public and private sector proclaim that innovations in financial technology will “bank the unbanked” and open new channels to affordable credit. This exuberance for all things tech in finance has led to a quiet yet aggressive deregulatory agenda, including, as of late, a federal assault via rulemaking on the ability of states to police the cost …
A Unified Theory Of Data, William Magnuson
A Unified Theory Of Data, William Magnuson
Faculty Scholarship
How does the proliferation of data in our modern economy affect our legal system? Scholars that have addressed the question have nearly universally agreed that the dramatic increases in the amount of data available to companies, as well as the new uses to which that data is being put, raise fundamental problems for our regulatory structures. But just what those problems might be remains an area of deep disagreement. Some argue that the problem with data is that current uses lead to discriminatory results that harm minority groups. Some argue that the problem with data is that it impinges on …
Artificial Financial Intelligence, William Magnuson
Artificial Financial Intelligence, William Magnuson
Faculty Scholarship
Recent advances in the field of artificial intelligence have revived long-standing debates about what happens when robots become smarter than humans. Will they destroy us? Will they put us all out of work? Will they lead to a world of techno-savvy haves and techno-ignorant have-nots? These debates have found particular resonance in finance, where computers already play a dominant role. High-frequency traders, quant hedge funds, and robo-advisors all represent, to a greater or lesser degree, real-world instantiations of the impact that artificial intelligence is having on the field. This Article will argue that the primary danger of artificial intelligence in …
Securitizing Digital Debts, Christopher K. Odinet
Securitizing Digital Debts, Christopher K. Odinet
Faculty Scholarship
The promise of financial technology (“fintech”) and artificial intelligence (“AI”) in broadening access to financial products and services continues to capture the imagination of policymakers, Wall Street, and the public. This has been particularly true in the realm of fintech credit where platform companies increasingly provide online loans to consumers, students, and small businesses by harnessing AI underwriting and alternative data. In 2019 alone fintech lenders represented nearly 50% of total non-credit card, unsecured consumer loan balances in the United States. One of the most prevalent ways fintech credit firms operate is by securitizing the online loans they help originate. …
Regulating Fintech, William Magnuson
Regulating Fintech, William Magnuson
Faculty Scholarship
The financial crisis of 2008 has led to dramatic changes in the way that finance is regulated: the Dodd-Frank Act imposed broad and systemic regulation on the industry on a level not seen since the New Deal. But the financial regulatory reforms enacted since the crisis have been premised on an outdated idea of what financial services look like and how they are provided. Regulation has failed to take into account the rise of financial technology (or “fintech”) firms and the fundamental changes they have ushered in on a variety of fronts, from the way that banking works, to the …