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Full-Text Articles in Law
Banks: A Broken Social Contract, Mehrsa Baradaran
Banks: A Broken Social Contract, Mehrsa Baradaran
Scholarly Works
This article explores how how the Financial Crisis of 2008 affected the banking industry and brought three specific problems: The first was that the banks and non‐bank financial institutions created due to deregulation were huge, interconnected, and highly leveraged; Second, the panic started in the “shadow banking” sector and showed that the short‐term credit transactions and derivatives that non‐bank financial institutions traded and used for funding for years were similar to banking, and thus prone to runs; and Third, the entire premise of deregulation rested on an assumption that individual firms and market players could accurately calculate and manage risks, …
Payday Lending Isn’T Helping The Poor. Here’S What Might, Mehrsa Baradaran
Payday Lending Isn’T Helping The Poor. Here’S What Might, Mehrsa Baradaran
Popular Media
This article appearing in the Washington Post on June 28, 2016 by Mehrsa Baradaran, J. Alton Hosch Associate Professor of Law at the University of Georgia School of Law explores how postal banking could benefit the poor and reduce their reliance on payday lending.
Credit Is A Double Edge Sword, Mehrsa Baradaran
Credit Is A Double Edge Sword, Mehrsa Baradaran
Popular Media
This commentary, which appeared in the Atlantic on April 26, 2016 discusses the Marquette decision by the Supreme Court and how it de-stigmatized the practice of usury.
Postal Banking Worked—Let’S Bring It Back, Mehrsa Baradaran
Postal Banking Worked—Let’S Bring It Back, Mehrsa Baradaran
Popular Media
This article appearing in The Nation on January 9, 2016 examines how Postal Banking could assist low-income individuals.
Why The Poor Face A Higher Cost Of Banking, Mehrsa Baradaran
Why The Poor Face A Higher Cost Of Banking, Mehrsa Baradaran
Popular Media
Professor Baradaran appeared on PBS Newshour to discuss inequality in the banking system on January 6, 2016.
It's Time For A Public Option In Banking, Mehrsa Baradaran
It's Time For A Public Option In Banking, Mehrsa Baradaran
Popular Media
Associate Professor Mehrsa Baradaran published this article in The Harvard Law Record on November 16, 2015. It discusses how post offices can provide ordinary citizens with banking services.
How The Us Post Office Can Save America—And Itself, Matt Phillips
How The Us Post Office Can Save America—And Itself, Matt Phillips
Popular Media
Professor Mehrsa Baradaran is interviewed by Quartz on her thoughts about postal banking.
If The U.S. Government Treated Poor People As Well As It Treats Banks, Mehrsa Baradaran
If The U.S. Government Treated Poor People As Well As It Treats Banks, Mehrsa Baradaran
Popular Media
One of the great ironies in modern America is that the less money you have, the more you pay to use it. The country’s “unbanked” must pay high fees to fringe banks to turn their paychecks into cash, pay their monthly bills, or send money to a spouse or a child. The unbanked pay much of their income—up to 10 percent—just to use their money. For these families, the total price of simple financial services each month is more than they spend on food. Indeed, it is very expensive to be poor. This article makes a proposal, transform underused post …
Postal Banking: A Lifesaver For America's Poor, Mehrsa Baradaran
Postal Banking: A Lifesaver For America's Poor, Mehrsa Baradaran
Popular Media
If banks are not providing credit to the poor, the state should provide it directly.The existing post office framework represents the most promising path toward effectuating such a public option. American banks long ago deserted their most impoverished communities, but post offices, even two centuries later, have remained — still rooted in an egalitarian mission. There have never been barriers to entry at post offices, and their services have been available to all, regardless of income.
Hold The Champagne On Ge Capital's Breakup, Mehrsa Baradaran
Hold The Champagne On Ge Capital's Breakup, Mehrsa Baradaran
Popular Media
General Electric announced last week plans to sell off the bulk of its financing arm, GE Capital. Some have claimed that this move is a win for regulators trying to curb "too big to fail" conglomerates and suggested it's a sign that financial reform is working. I'm not so sure. I think it just means that the conglomerates left standing are now even more homogeneous and risk-prone.
Maggie Walker's Bank, Mehrsa Baradaran
Maggie Walker's Bank, Mehrsa Baradaran
Popular Media
Maggie Walker was the first woman of any race to own a bank. What makes this achievement remarkable is that she was born in 1867 to a former slave in Richmond, Va. Her mother was widowed and left destitute when her father was murdered. She and her mother survived by doing laundry for whites families in the area, an experience that shaped her understanding of wealth and race inequality. But Maggie was a brilliant student and finished high school at 16. She became a teacher, but was forced to quit when she married as it was unlawful for married women …
Regulation By Hypothetical, Mehrsa Baradaran
Regulation By Hypothetical, Mehrsa Baradaran
Scholarly Works
A new paradigm is afoot in banking regulation—and it involves a turn toward the more speculative. Previous regulatory instruments have included geographic restrictions, activity restrictions, disclosure mandates, capital requirements, and risk management oversight to ensure the safety of the banking system. This Article describes and contextualizes these regulatory tools and shows how and why they were formed to deal with industry change. The financial crisis of 2008 exposed the shortcomings in each of these regimes. In important ways, the Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) departs from these past regimes and proposes something new: Call it …
The Post Office Banks On The Poor, Mehrsa Baradaran
The Post Office Banks On The Poor, Mehrsa Baradaran
Popular Media
Approximately 88 million people in the United States, or 28 percent of the population, have no bank account at all, or do have a bank account, but primarily rely on check-cashing storefronts, payday lenders, title lenders, or even pawnshops to meet their financial needs. And these lenders charge much more for their services than traditional banks. The average annual income for an “unbanked” family is $25,500, and about 10 percent of that income, or $2,412, goes to fees and interest for gaining access to credit or other financial services. But a possible solution has appeared, in the unlikely guise of …
Banking And The Social Contract, Mehrsa Baradaran
Banking And The Social Contract, Mehrsa Baradaran
Scholarly Works
This article asserts that there exists today and has always existed an interdependent relationship between banks and the state. I refer to this connection and its mutual benefits and responsibilities as a social contract. When Alexander Hamilton responded to President Washington’s inquiry about the advisability of a national bank, he wrote that “such a Bank is not a mere matter of private property, but a political machine of the greatest importance to the State.” This social contract has existed since the inception of banking in the United States and has been reinforced over time, but it has recently become weakened …
It’S Time For Postal Banking, Mehrsa Baradaran
It’S Time For Postal Banking, Mehrsa Baradaran
Scholarly Works
This essay makes the case that the USPS is in a unique position to provide much-needed financial services for the large population of unbanked or underbanked Americans. First, the post office can offer credit at lower rates than fringe lenders by taking advantage of economies of scale as well as their position in the federal bureaucracy. Second, they already have branches in many low-income neighborhoods that have been long deserted by commercial banks. And, third, people at every level of society, including the unbanked, have a level of familiarity and comfort with the post office that they do not have …