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Full-Text Articles in Law
Comment Of Legal Scholars On Authority To Require Supervision And Regulation Of Certain Nonbank Financial Companies, Financial Stability Oversight Council Rin 4030-Aa00, Daniel Schwarcz, Patricia A. Mccoy, Jeremy Kress
Comment Of Legal Scholars On Authority To Require Supervision And Regulation Of Certain Nonbank Financial Companies, Financial Stability Oversight Council Rin 4030-Aa00, Daniel Schwarcz, Patricia A. Mccoy, Jeremy Kress
Patricia A. McCoy
Professor McCoy coauthored this comment on a proposal by the Financial Stability Oversight Council to overhaul systemic risk regulation for nonbank financial firms.
Comment Of Professor Patricia A. Mccoy On Docket No. Cfpb-2019-0039, Patricia A. Mccoy
Comment Of Professor Patricia A. Mccoy On Docket No. Cfpb-2019-0039, Patricia A. Mccoy
Patricia A. McCoy
In this comment letter, Professor McCoy responds to the Advance Notice of Proposed Rulemaking on Qualified Mortgages issued by the Consumer Financial Protection Bureau.
Inside Job: The Assault On The Structure Of The Consumer Financial Protection Bureau, Patricia A. Mccoy
Inside Job: The Assault On The Structure Of The Consumer Financial Protection Bureau, Patricia A. Mccoy
Patricia A. McCoy
Soon after the 2016 election of Donald Trump as President of the United States, while Republicans controlled Congress, opponents of the fledgling Consumer Financial Protection Bureau (CFPB) opened a campaign against the Bureau. Their target was less the substance of federal consumer financial protection laws than the structure of the CFPB itself. This emphasis on structure was a response to the fact that Congress in 2010 had given special thought to the design of the CFPB to safeguard the Bureau and its mission.
In 2017, after legislation to weaken the Bureau’s structure failed in Congress and constitutional challenges to the …
Comment Of Legal Scholars On Occ's Community Reinvestment Act Anpr (Docket Id Occ-2018-0008), Vincent Rougeau, Patricia A. Mccoy
Comment Of Legal Scholars On Occ's Community Reinvestment Act Anpr (Docket Id Occ-2018-0008), Vincent Rougeau, Patricia A. Mccoy
Patricia A. McCoy
Comment submitted to the federal government on a proposal to revise the rule implementing the Community Reinvestment Act.
Brief Of Amici Curiae Finance Regulation Scholars In Support Of Plaintiff's Motion For A Preliminary Injunction In English V. Trump, Patricia A. Mccoy
Brief Of Amici Curiae Finance Regulation Scholars In Support Of Plaintiff's Motion For A Preliminary Injunction In English V. Trump, Patricia A. Mccoy
Patricia A. McCoy
Professor McCoy was the lead author of an amicus brief in support of the lawsuit by CFPB Deputy Director Leandra English against the Trump Administration, asserting that she lawfully became the Acting Director of the Consumer Financial Protection Bureau under the Dodd-Frank Act.
Why Cyclicality Matters To Access To Mortgage Credit, Patricia A. Mccoy, Susan M. Wachter
Why Cyclicality Matters To Access To Mortgage Credit, Patricia A. Mccoy, Susan M. Wachter
Patricia A. McCoy
Virtually no attention has been paid to the problem of cyclicality in debates over access to mortgage credit, despite its importance as a driver of tight credit. Housing markets are prone to booms accompanied by bubbles in mortgage credit in which lenders cut underwriting standards, leading to elevated loan defaults. During downturns, these cycles artificially impede access to mortgage credit for underserved communities. During upswings, these cycles make homeownership unnecessarily precarious for many who attain it. This volatility exacerbates wealth and income disparities by ethnicity and race. The boom-bust cycle must be addressed in order to assure healthy and sustainable …
Has The Mortgage Pendulum Swung Too Far? Reviving Access To Mortgage Credit, Patricia A. Mccoy
Has The Mortgage Pendulum Swung Too Far? Reviving Access To Mortgage Credit, Patricia A. Mccoy
Patricia A. McCoy
In the wake of the financial crisis, mortgage lending to lower-income and minority borrowers overcorrected and has not recovered. Although homeownership is a riskier investment than previously realized, still it remains a proven path to increased wealth on balance for lower-income households. There are a number of reasonable reforms that could achieve greater access to credit while containing default risk. These include strategies to reduce down payments safely and to keep monthly payments manageable, combined with fixed-rate loans. Prepurchase counseling is important to preparing applicants for the financial demands of homeownership and strengthening their credit histories, while rapid foreclosure prevention …
Foreword, Patricia A. Mccoy
Foreword, Patricia A. Mccoy
Patricia A. McCoy
In the wake of the financial crisis, mortgage lending to lower-income and minority borrowers overcorrected and has not recovered. Although homeownership is a riskier investment than previously realized, still it remains a proven path to increased wealth on balance for lower-income households. There are a number of reasonable reforms that could achieve greater access to credit while containing default risk. These include strategies to reduce down payments safely and to keep monthly payments manageable, combined with fixed-rate loans. Prepurchase counseling is important to preparing applicants for the financial demands of homeownership and strengthening their credit histories, while rapid foreclosure prevention …
A New Coalescence In The Housing Finance Reform Debate?, Patricia Mccoy, Susan Wachter
A New Coalescence In The Housing Finance Reform Debate?, Patricia Mccoy, Susan Wachter
Patricia A. McCoy
This policy brief examines recent proposals for reform of the housing finance system.
Representations And Warranties: Why They Did Not Stop The Crisis, Patricia Mccoy, Susan Wachter
Representations And Warranties: Why They Did Not Stop The Crisis, Patricia Mccoy, Susan Wachter
Patricia A. McCoy
During the run-up to the 2008 financial crisis, representations and warranties (contractual statements enforceable through legal action) may have given investors false assurance that mortgage loans were being properly underwritten. This assurance in turn may have contributed to overinvestment in mortgage-backed securities in two ways. First, the assumption that legally enforceable penalties associated with reps and warranties would deter lax underwriting may have led to less monitoring of these contracts than would otherwise have occurred. In turn, the lack of monitoring of actual underwriting practices enabled the spread of lax lending practices. The existence of these reps and warranties and …
Countercyclical Regulation And Its Challenges
Countercyclical Regulation And Its Challenges
Patricia A. McCoy
Degrees Of Intermediation, Patricia A. Mccoy
Access To Mortgage Credit 2.0, Patricia Mccoy
Access To Mortgage Credit 2.0, Patricia Mccoy
Patricia A. McCoy
Market Conduct Regulation And Regulating By Risk, Patricia Mccoy
Market Conduct Regulation And Regulating By Risk, Patricia Mccoy
Patricia A. McCoy
Testimony Before Federal Banking Regulators On Regulatory Relief, Patricia Mccoy
Testimony Before Federal Banking Regulators On Regulatory Relief, Patricia Mccoy
Patricia A. McCoy
What Loss Mitigation Taught Us About Housing Finance Reform, Patricia Mccoy
What Loss Mitigation Taught Us About Housing Finance Reform, Patricia Mccoy
Patricia A. McCoy
This blog post describes the implications of the recent US loss mitigation experience for housing reform.
Banking Law Manual: Federal Regulation Of Financial Holding Companies, Banks And Thrifts (Semi-Annual Supplement)
Patricia A. McCoy
No abstract provided.
Systemic Risk Oversight And The Shifting Balance Of State And Federal Authority Over Insurance
Systemic Risk Oversight And The Shifting Balance Of State And Federal Authority Over Insurance
Patricia A. McCoy
Moderator, Regulation: Systemically Important Financial Institution (Sifi) Designations
Moderator, Regulation: Systemically Important Financial Institution (Sifi) Designations
Patricia A. McCoy
Moderated a roundtable discussion on proposals to subject the asset management industry to systemic risk oversight.
Countercyclical Regulation And Its Challenges
Countercyclical Regulation And Its Challenges
Patricia A. McCoy
The paper presented examines legal and institutional challenges to implementing countercyclical regulation in financial services. Also presented in June 2014 at a Suffolk University Law School Faculty Workshop in Boston, MA.
Market Conduct Supervisors And Their Interactions With Prudential Authorities
Market Conduct Supervisors And Their Interactions With Prudential Authorities
Patricia A. McCoy
This presentation addressed potential commonalities and conflicting interests of market conduct and prudential supervisors.
Rethinking Disclosure In A World Of Risk-Based Pricing, Patricia Mccoy
Rethinking Disclosure In A World Of Risk-Based Pricing, Patricia Mccoy
Patricia A. McCoy
In response to subprime loan abuses, it is common for policymakers to exhort consumers to comparison-shop for residential mortgages. This policy prescription ignores the fact that price revelation works differently in the prime and subprime markets, impeding search in subprime. In the prime market, lenders reveal firm prices for free, without requiring consumers to first submit loan applications. This dynamic, combined with Truth-in-Lending Act (TILA) disclosures that standardize prices, make it easy to comparison-shop for prime mortgages. In contrast, in the subprime market featuring risk-based pricing, consumers must reveal their creditworthiness before lenders can determine loan prices, which allows lenders …
Turning A Blind Eye: Wall Street Finance Of Predatory Lending, Kathleen Engel, Patricia Mccoy
Turning A Blind Eye: Wall Street Finance Of Predatory Lending, Kathleen Engel, Patricia Mccoy
Patricia A. McCoy
Today, Wall Street finances up to eighty percent of subprime home loans through securitization. The subprime sector, which is designed for borrowers with blemished credit, has been dogged by predatory lending charges, many of which have been substantiated. As subprime securitization has grown, so have charges that securitization turns a blind eye to financing abusive loans. In this paper, we examine why secondary market discipline has failed to halt the securitization of predatory loans.
When investors buy securities backed by predatory loans, they face a classic lemons problem in the form of credit risk, prepayment risk, and litigation risk. Securitization …
The Cra Implications Of Predatory Lending, Kathleen Engel, Patricia Mccoy
The Cra Implications Of Predatory Lending, Kathleen Engel, Patricia Mccoy
Patricia A. McCoy
Traditionally, policymakers, communities, and industry have regarded the Community Reinvestment Act ("CRA") as a positive mandate for banks and thrifts to do good by increasing investment in low- and moderate-income ("LMI") neighborhoods. When Congress enacted CRA, it was inconceivable that LMI neighborhoods might eventually receive too much credit in the form of abusive mortgages. However, by the late 1990s, predatory mortgages- exploitative high-cost loans to gullible borrowers-were ravaging the inner cities. We address the question: given the surge in predatory lending, how should CRA respond? CRA and federal subsidies to regulated lenders can create perverse incentives for lenders to engage …
The Home Mortgage Foreclosure Crisis: Lessons Learned
The Home Mortgage Foreclosure Crisis: Lessons Learned
Patricia A. McCoy
From 2007 through 2011, the United States housing market suffered a severe imbalance in supply and demand due to an excessive number both of foreclosed homes and homes awaiting foreclosure in the shadow housing inventory. Foreclosure prevention can help reduce the shadow housing inventory by keeping troubled mortgages from entering that inventory to begin with. The loan modification experience post-2008 yielded four main lessons about the best way to optimize foreclosure prevention. First, servicers should design loan modifications to lower monthly payments, including through principal reduction whenever appropriate. Second, servicers should evaluate loss mitigation as soon as possible following delinquency. …
Barriers To Foreclosure Prevention During The Financial Crisis
Barriers To Foreclosure Prevention During The Financial Crisis
Patricia A. McCoy
The number of modifications to distressed residential loans following the 2008 financial crisis has been disappointingly low compared to the number of foreclosures. This raises concerns about the presence of artificial barriers to loan modifications in situations where foreclosure should be avoidable. There are three pressing reasons to care about what the real barriers to foreclosure prevention are. First, foreclosures that could have been avoided inflict enormous, needless losses on borrowers, investors, and society at large. Second, overcoming artificial barriers to foreclosure prevention will result in loan modifications with higher rates of success. Finally, knowing what to fix is necessary …
Keeping Tabs On Financial Innovation: Product Identifiers In Consumer Financial Regulation
Keeping Tabs On Financial Innovation: Product Identifiers In Consumer Financial Regulation
Patricia A. McCoy
The financial crisis of 2008 gave rise to renewed discussion about whether financial innovations should undergo higher scrutiny for potential harm and, if so, what type? In this Article, the authors propose a new system for monitoring financial innovations through a system of registration, data collection and analysis using unique product identifiers. Creating product identifiers would increase monitoring abilities substantially at relatively low cost by facilitating the linkage of separate databases. The assignment of unique product identifiers would also minimize errors in the identification and classification of different financial products. These identifiers would be available to both the government and …
The Consumer Financial Protection Bureau: Financial Regulation For The 21st Century
The Consumer Financial Protection Bureau: Financial Regulation For The 21st Century
Patricia A. McCoy
After existing regulatory systems failed to prevent the recent financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, a sweeping reform designed to alleviate the crisis and prevent its recurrence. Out of this Act, the Consumer Financial Protection Bureau was born. This new agency is charged with making markets for consumer financial products and services work for Americans, a task that was previously spread out among seven different federal agencies with varying priorities. This Article describes, with a series of concrete case studies, four key principles that have guided the Bureau as it strives to fulfill …
Federal Preemption And Consumer Financial Protection: Past And Future
Federal Preemption And Consumer Financial Protection: Past And Future
Patricia A. McCoy
Starting in 1995 and throughout the subprime boom during the next decade, Congress failed to take action to curb predatory mortgage lending. Many states and cities filled the void by passing anti-predatory lending laws of their own. Lenders, worried about potential liability, quickly organized a full-scale attack on the state and local initiatives. Their most potent strategy lay in challenging the laws and ordinances under federal preemption rules for national banks and federal savings associations that precluded states from enforcing their anti-predatory lending laws.
The Dodd-Frank Act curtailed the preemption rules by establishing that state consumer financial laws can only …
Public Engagement In Rulemaking: The Consumer Financial Protection Bureau’S New Approach
Public Engagement In Rulemaking: The Consumer Financial Protection Bureau’S New Approach
Patricia A. McCoy
No abstract provided.