Law Commons^™

Banks And Inner Cities: Market And Regulatory Obstacles To Development Lending, Keith N. Hylton

Faculty Scholarship

Why are poor inner cities underserved by financial institutions, and why is it so difficult to find a solution to this problem? Explanations of the lending shortfall problem range between theories based on discrimination to the view that the lending market is working flawlessly. Drawing largely on the economic development literature, I elaborate an alternative explanation here. The asymmetric information theory I offer yields the prediction that urban minority communities will be underserved by financial institutions even in the absence of discriminatory intent.

I claim that the existing framework of banking regulation is in part responsible for the difficulty in …

The Necessity Of (And The Threat Posed By) Consumer Financial Education For The New Financial Conglomerates, James A. Fanto

Faculty Scholarship

No abstract provided.

The Necessity Of (And The Threat Posed By) Consumer Financial Education For The New Financial Conglomerates, James A. Fanto

Faculty Scholarship

No abstract provided.

Time And Money: One State's Regulation Of Check-Based Loans, Deborah A. Schmedemann

Faculty Scholarship

This article, which is part narrative and part essay, describes one professor's experience working on “check cashing” (or “check-based loans”) cases at the Appalachian Research and Defense Fund in eastern Kentucky. Parts I and II describe the typical check-based loan transaction and its effects on low-income consumers. Part III recounts how the law of check-based loans has developed in Kentucky, during the professor’s time there and since. Part IV sets forth some observations about language and legal process, suggested by the preceding narrative.

Securitizing Insurance Risks, Tamar Frankel, Joseph W. Laplume

Faculty Scholarship

This Article analyzes and evaluates the legal problems that have arisen in connection with this rapidly developing insurance risk securitization. The first part of the Article deals with legal issues concerning the SPVs that undertake insurance and reinsurance contracts with ceding insurers and the other parties to the transaction. The Article addresses the dilemma in choosing the laws applicable to SPVs, the bonds they issue, and the persons and entities that form part of the securitization transaction. These laws involve state insurance laws, bankruptcy and tax laws, the Investment Company Act of 1940 and the Commodity Exchange Act of 1934, …

The Role Of Letters Of Credit In Payment Transactions, Ronald J. Mann

Faculty Scholarship

Common justifications for the use of the letter of credit fail to explain its widespread use. The classic explanation claims that the letter of credit provides an effective assurance of payment from a financially responsible third party. In that story, the seller – a Taiwanese clothing manufacturer, for example – fears that the overseas buyer – Wal-Mart – will refuse to pay once the goods have been shipped. Cross-border transactions magnify the concern, because the difficulties of litigating in a distant forum will hinder the manufacturer's efforts to force the distant buyer to pay. The manufacturer-seller solves that problem by …

Informality As A Bilateral Assurance Mechanism: Comments On Ronald Mann's The Role Of Letters Of Credit In Payment Transactions, Avery W. Katz

Faculty Scholarship

Ronald Mann's study of documentary defects in the presentation of commercial letters of credit1 is a valuable contribution to the commercial law literature in at least three respects. First, it offers a detailed and thorough empirical survey of an important though specialized aspect of commercial practice. Mann collected and coded a data sample of 500 randomly selected letter-of-credit transactions, personally evaluating each transaction to determine whether the documentary presentation by the beneficiary of the letter of credit (i.e., the seller) complied with the letter's formal terms. Then, for each case in which he found one or more documentary defects, Mann …