Law Commons^™

The Truth About Fibs (Financial Institution Bonds) In Mississippi: When Express Terms Conflict With Statutory Requirements, Ronald J. Rychlak

Mississippi College Law Review

In Mississippi, Financial Institution Bonds (FIBs) are statutorily-required financial instruments that cover officers or employees of a bank (or other financial institution) to protect financial institutions against losses caused by matters such as dishonesty; forgery; fraud; kidnapping, ransom, or extortion; and counterfeiting. State statutes set forth the terms that are to be included in the FIB, but standard forms are promulgated by the Surety Association of America (SAA) or on special forms drafted by the surety.

A problem can arise if the terms on the executed bond form do not coincide with the requirements of the state statute.

Fenceposts Without A Fence, Katherine E. Di Lucido, Nicholas K. Tabor, Jeffery Y. Zhang

Vanderbilt Law Review

Banking organizations in the United States have long been subject to two broad categories of regulatory requirements. The first is permissive: a "positive" grant of rights and privileges, typically via a charter for a corporate entity, to engage in the business of banking. The second is restrictive: a "negative" set of conditions on those rights and privileges, limiting conduct and imposing a program of oversight and enforcement, by which the holder of that charter must abide. Together, these requirements form a legal cordon, or "regulatory perimeter," around the U.S. banking sector.

The regulatory perimeter figures prominently in several ongoing policy …

Penerapan Prinsip Business Judgement Rule Dalam Melaksanakan Kegiatan Perkreditan Dengan Menganut Prinsip Kehati-Hatian Pada Kasus Kejahatan Perbankan Di Indonesia, Dewi Maya Br Ginting

"Dharmasisya” Jurnal Program Magister Hukum FHUI

In a more complex and simplistic sense, abuse (abnormal use) of power can be interpreted as a result of the failure of internal control. Within the banking industry itself, the prudential principle is the main benchmark in the formation and maintenance of relations between the Bank and the public. Although Directors and Commissioners bear legal responsibility with their respective portions, there are certain limitations regarding when directors and commissioners cannot be held liable for the risk of decisions or supervisory actions that they have taken. When faced with a case of alleged banking crime, the Panel of Judges can use …

The Federal Reserve As Agent To Another Principal: Monetary Penalties 1997-2022, David Zaring

Indiana Law Journal

Enforcement is how agencies make policy, but the Federal Reserve Board, perhaps the country’s most important independent agency, and certainly its most important regulator of banks, does most of its enforcement in secret. This secrecy means that it is difficult for outside observers to see what the Fed is prioritizing. One exception to the secret sanction paradigm is the civil monetary penalty: once the Fed decides to fine a bank or a banker, no matter how small the amount, it must publicize the fine and the basis for it. We read twenty-five years’ worth of civil monetary penalty orders to …

Prinsip Kerahasiaan Bank Dan Self Assessment System Dikaitkan Dengan Undang-Undang Akses Informasi Keuangan Sebagai Upaya Penegakan Kepatuhan Pajak, Salsabila Aufadhia Ilanoputri

"Dharmasisya” Jurnal Program Magister Hukum FHUI

Indonesia is a country that is actively carrying out development aimed at advancing the welfare of the community, one of which is in the economic sector. Banking and taxation are sector capable of supporting the national economy. Banks as financial services institutions that directly withdraw funds from the public based on customer trust, so that bank secrecy is the soul of the banking system. In addition, the economic rate in Indonesia is also supported by the facilities and infrastructure built through funds obtained from various state fees, one of which is taxes based on Self Assessment System (SAS). The principle …

Taking It To The Bank: The Need For A Federal Legislative Safe Harbor For Financial Institutions Offering Services To State-Legal Marijuana-Related Businesses, Andrew Bloomfield

Journal of Civil Rights and Economic Development

(Excerpt)

Imagine that you are a small business owner. Rather than opening a new coffee shop, craft brewery, or chic clothing store, you decide to enter one of the fastest-growing industries in the country: marijuana (also referred to herein as “cannabis”). Your state, Washington, has recently legalized recreational use of marijuana, and your new marijuana-related business (MRB), Plantworks, has joined thousands of other licensed producers to supply the new growing market.

You and your business partner lease 2,500 square feet of industrial workspace in Seattle’s North End and produce several pounds of high-quality “craft” cannabis for distribution to local dispensaries. …

Too Many To Fail: Against Community Bank Deregulation, Jeremy C. Kress, Matthew C. Turk

Northwestern University Law Review

Since the 2008 financial crisis, policymakers and scholars have fixated on the problem of “too-big-to-fail” banks. This fixation, however, overlooks the historically dominant pattern in banking crises: the contemporaneous failure of many small institutions. We call this blind spot the “too-many-to-fail” problem and document how its neglect has skewed the past decade of financial regulation. In particular, we argue that, for so- called community banks, there has been a pronounced and unjustifiable shift toward deregulation, culminating in sweeping regulatory rollbacks in the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018.

As this Article demonstrates, this deregulatory trend rests …

The Role Of The Board Of Financial Services Firms In Improving Their Firm's Culture, Ciaran Walker

Seattle University Law Review

In this Article, we look at the role the board is expected to play under regulatory requirements and guidance; we then look specifically at the failings of boards in a number of the recent “scandals.” Finally, we offer a number of suggestions on ways in which the board can have a more effective role in improving firms’ culture. In this latter regard, we specifically focus on industry (rather than firm-specific) initiatives that could enable the board to have a more effective role, particularly in light of the setting up of the industry-funded Banking Standards Board in the U.K. and the …

Regulating Banking Ethics: A Toolkit, David Zaring

Seattle University Law Review

There is little doubt that culture matters for institutions—entities ranging from economics departments to soccer teams spend plenty of time thinking about the cultures they hope to foster—and that culture is also exceedingly hard to measure or define. Regulators now have had a decade since the financial crisis to operationalize their approach to guiding and improving the ethics and culture of the banks they oversee. Understanding what they have chosen to do makes it easier to assess the value of the effort to make cultural transformation an important part of a regulatory program. It also offers lessons to the broader …

O Tell Me The Truth About Bail-In: Theory And Practice, Marco Ventoruzzo, Giulio Sandrelli

The Journal of Business, Entrepreneurship & the Law

In this perspective, the purpose of this Article is to analyze the functioning of the European regulatory framework for the crisis of credit institutions in the light of its early applications, and with a special focus on the bail-in tool. We investigate how the new resolution mechanisms—rooted in the principle of private sector involvement in banking restructurings—have interplayed with (and tried to re-shape) legal and institutional contexts still characterized by an attitude to bail-out rescues and by non-harmonized national insolvency legislations.

Venezuela Undermines Gold Miner Crystallex's Attempts To Recover On Its Icsid Award, Sam Wesson

Loyola of Los Angeles International and Comparative Law Review

No abstract provided.

Financial Repression In China: Short-Term Growth But Long-Term Crisis, Guangdong Xu, Michael Faure

Loyola of Los Angeles International and Comparative Law Review

No abstract provided.

Fintech Industrial Banks And Beyond: How Banking Innovations Affect The Federal Safety Net, Cinar Oney

Fordham Journal of Corporate & Financial Law

The FinTech industry has been utilizing technological innovations to provide services traditionally offered by the banking and financial industry. Until now, many FinTech firms engaging in these activities had non-bank state licenses. The uncertainties surrounding their current business models and the desire to expand the operations led some of these firms to apply for industrial bank charters. An industrial bank charter is one of the few ways for a commercial firm to control a depository institution and allows FinTech firms to retain their technological investments that are not directly related to banking. However, access of these industrial banks to the …

Hb 192 - Banking And Finance, Caroline G. Mayson, Jesse C. Moore

Georgia State University Law Review

The Act changes the provisions relating to the responsibilities and standard of care for directors and officers of banks, trust companies, and corporations. The Act codifies the business judgment rule. The operative liability standard for directors and officers is gross negligence, as opposed to simple negligence, and directors and officers may rely on other individuals in the performance of their duties. A rebuttable presumption exists that directors and officers act in good faith.

Online Lenders Shouldn't Get Mad Over Madden, Benjamin Lo

The Journal of Business, Entrepreneurship & the Law

The Second Circuit’s surprising decision in Madden v. Midland Funding caused consternation within the financial services industry. There, the Madden Court held that the National Bank Act’s pre-emption of state usury law did not apply to consumer debt sold by banks to third parties. Under the Second Circuit’s ruling, third-party buyers could not be certain of loan values, potentially making consumer finance markets less liquid. This decision immediately sparked concerns from the alternative finance industry, which worried that the secondary market for consumer debt would dry up and reduce consumer credit availability. It also alarmed financial technology startups such as …

Foreclosure Diversion And Mediation In The States, Alan M. White

Georgia State University Law Review

The recent mortgage foreclosure crisis, whose economic effects are well known, transformed state legal structures governing the mortgage foreclosure process. What had been a relatively routine system of default judgments and auction sales has evolved into a negotiation and workout practice in which homeowners contest foreclosures, demand loan modifications and short sales, and propose other alternatives to foreclosures.

A profusion of state laws and court orders were adopted between 2008 and 2014 with the aim of promoting negotiated foreclosure alternatives. These laws have produced a variety of experiments in the “laboratories of democracy.” The defaults—whether home loans are renegotiated, defaults …

The New Era Of Doing Business With Iran: Iran’S International Commercial Transactions And Global Security, John Changiz Vafai

Pace International Law Review

On January 17, 2016, in a statement following his signing of the Joint Comprehensive Plan of Action (JCPOA) with Iran, President Obama addressed that country’s people, stating that “yours is a great civilization, with a vibrant culture that has so much to contribute to the world – in commerce, and in science and the arts.” While the former U.S. President’s evaluation of the Iranian people’s greatness is indisputable, there are questions concerning doing business with Iran which transcend conventional legal issues and commercial problems.

Given the juxtaposition of Iran’s duopolistic government structure and ideologically oriented decision-making processes, questions arise as …

The Bridging Model: Exploring The Roles Of Trust And Enforcement In Banking, Bitcoin, And The Blockchain, Catherine Martin Christopher

Nevada Law Journal

No abstract provided.

"Special," Vestigial, Or Visionary? What Banking Regulation Tells Us About The Corporation—And Vice Versa, Robert C. Hockett, Saule T. Omarova

Seattle University Law Review

A remarkable yet seldom noted set of parallels exists between modern U.S. bank regulation, on the one hand, and what used to be garden-variety American corporate law, on the other hand. For example, just as bank charters are matters not of right but of conditional privilege even today, so were all corporate charters not long ago. Just as chartered banks are authorized to engage only in limited, enumerated activities even today, so were all corporations restricted not long ago. And just as banks are subject to strict capital regulation even today, so were all corporations not long ago. In this …

Comment: Maryland State Bank: The Responsible Solution For Fostering The Growth Of Maryland's Medical Cannabis Program, David Bronfein

University of Baltimore Law Forum

In 2013, Maryland passed its initial medical cannabis law.1 Although seemingly a success in the medical cannabis reform movement, the law only allowed for “academic medical centers” to participate in the program.2 In essence, an academic medical center could dispense medical cannabis to patients who met the criteria for participation in their research program.3 The success of this type of program structure was a concern for medical cannabis advocates,4 and the concerns were validated when no academic medical centers decided to participate.5 As a result of this lackluster program, the General Assembly responded by passing a bill6 during the 2014 …

Reforming The Regulation Of Community, Tanya D. Marsh

Indiana Law Journal

The regulatory framework for financial institutions in the United States imposes significant costs on community banks without providing benefits to consumers or the economy that justify those costs. The Dodd-Frank Wall Street Reform and Consumer Protection Act builds on decades of “one-size-fits-all” regulation of financial institutions, an ill-conceived regulatory strategy that puts community banks at a competitive disadvantage as compared with their larger, more complex competitors. The imposition of regulatory burdens on community banks without attendant benefits ultimately harms both consumers and the economy by (1) forcing community banks to consolidate or go out of business, furthering the concentration of …

Transforming China's Traditional Banking Systems Under The New National Banking Laws, Andrew X. Qian

Georgia Journal of International & Comparative Law

No abstract provided.

Libor: Everything You Ever Wanted To Know But Were Afraid To Ask, Michael R. Koblenz, Kenneth M. Labbate, Carrie C. Turner

The Journal of Business, Entrepreneurship & the Law

The goal of this article is to present the reader with a general overview of the LIBOR: its genesis and development, how and why London bankers manipulated the LIBOR, the liability of implicated parties, criminal penalties, the impact of criminal penalties on director and officer insurance carriers, and what the future holds for the LIBOR.

Drastic Times Call For Drastic Risk Measures: Why Value-At-Risk Is (Still) A Flawed Preventative Of Financial Crises And What Regulators Can Do About It, Andrew L. Mcelroy

The Journal of Business, Entrepreneurship & the Law

Bank regulators recently proposed the most fundamental reforms to U.S. banking law in decades, yet the value-at-risk statistic--replete with known deficiencies--remains the basis of the capital adequacy requirement. Consequently, there exists an unresolved tension in the law: the purpose of the banking rules is to require riskier financial institutions to hold additional capital, yet the value-at-risk statistic used to make this assessment induces a perverse incentive to hold the riskiest securities. Overlaid on this framework is the wide latitude afforded to banks in designing their value-at-risk models. This Article explores foreseeable issues with the regulatory reliance on value-at-risk. Moreover, it …

The Common Link In Failures And Scandals At The World’S Leading Banks, Justin O’Brien, Olivia Dixon

Seattle University Law Review

This Article argues that both the root cause of the crisis and the route to restoring trust and confidence is to be found in ascertaining how to regulate culture across mandates, processes, and use of discretion. Part II identifies the internal and external failings of four of the most recent global banking scandals within the CEDAR matrix. Part III discusses the regulatory challenges faced when compliance serves no practical function and the consequent material risk to market integrity. This Article concludes by suggesting that it is unsustainable for regulation to be decided, implemented, and monitored at a national level. Global …

Banking And Competition In Exceptional Times, Brett Christophers

Seattle University Law Review

This Article has two main aims: to provide a critical consideration of this contemporary antitrust “revival” from an explicitly political–economic perspective and to point toward some theoretical resources that might facilitate such an assessment.Part II looks backward at the evolution and application of competition law in the banking sector over the relatively longue durée. In this Part, I invoke the concept of “exception” to understand how antitrust policy has developed, and my chief interlocutors are the perhaps unlikely figures of Giorgio Agamben and Karl Marx. Part III looks forward and considers the central question around which the recent resurgence of …

Pitfalls In Brazilian Bankruptcy Law For International Bond Investors, Jeffrey M. Anapolsky, Jessica F. Woods

Journal of Business & Technology Law

No abstract provided.

Is There A Dual Banking System?, Carl Felsenfeld, Genci Bilali

The Journal of Business, Entrepreneurship & the Law

There is a fierce controversy being waged today about the status of the historic dual banking system in American law. National banks (banks chartered by the national government) derive their powers from federal law. States, on the other hand, assert that they should be able to control certain aspects of national bank operations such as consumer protection written as state law. While the national banks acknowledge that states do have certain areas where they may control national bank activities--much contract law, for example, which is essentially state law--the national banks also assert a high level of authority--preemption--over the states where …

A Test Case In International Bankruptcy Protocols: The Lehman Brothers Insolvency, Jamie Altman

San Diego International Law Journal

Part II of this Article, explains the competing theories underlying bankruptcy systems: universalism and territorialism. Part III details various statutory solutions to international bankruptcy problems. Next, Part IV analyzes the provisions of the Lehman Protocol in depth. Part V then examines the precedent upon which the Lehman Protocol relies. Part VI assesses potential threats to the Protocol?s success. This leads to Part VII, which contains suggestions for future protocols. Finally, Part VIII concludes.

Cuomo V. Clearing House Association, L.L.C.: States Enforcing State Laws Against National Banks, Louis P. Malick

Journal of Business & Technology Law

No abstract provided.