Banking and Finance Law Commons^™

Improving Access To Justice: Plain Language Family Law Court Forms In Washington State, Charles R. Dyer, Joan E. Fairbanks, M. Lynn Greiner, Kirsten Barron, Janet L. Skreen, Josefina Cerrillo-Ramirez, Andrew Lee, Bill Hinsee

Seattle Journal for Social Justice

No abstract provided.

Congress' Encroachment On The President's Power In Indian Law And Its Effect On Executive-Order Reservations, Mark R. Carter Jd, Phd

Seattle Journal for Social Justice

No abstract provided.

There Goes The Neighborhood: Regulating Away The Community Bank - An Analysis Of The Costs Of Current Regulations On Community Banks, Alan J. Wilson

West Virginia Law Review

No abstract provided.

Costing A Pretty Penny: Online Penny Auctions Revive The Pestilence Of Unregulated Lotteries, David R. Konkel

Seattle University Law Review

Penny auctions, an online phenomenon imported from Europe, operate by the hundreds in the United States without meaningful oversight from consumer protection agencies. In a penny auction, consumers compete for items one penny at a time. To date, no significant inquiry, either academic or practical, into the legitimacy of the penny auction has occurred. Although marketed as auctions, online penny auctions may actually qualify as lotteries. Unlike the multifarious and confusing definitions of gambling, the long-accepted definition of a lottery consists of three elements: prize, consideration, and chance. If a penny auction satisfies this definition then, under well-established case law …

A Specter Is Haunting The Financial Industry - The Specter Of The Global Financial Crisis: A Comment On The Imminent Expansion Of Consumer Financial Protection In The United States, The United Kingdom, And The European Union, Daniel Lamb

Journal of the National Association of Administrative Law Judiciary

This Comment explores the regulatory fallout from the global financial crisis. Across borders, policy makers are united in their conviction to reconcile the perceived failures of their predecessors to foresee and prevent the crisis, the effects of which show no signs of abating. A critical component of what caused the crisis was the inability to correct failures in the consumer credit market, specifically in subprime mortgages. Exacerbated by an influx of capital and a generally weak regulatory environment, this market failure manifested itself forcefully through a tidal wave of defaults in the American mortgage market that sent shock waves around …

Nonbank Banks: A Legitimate Financial Intermediary Emerges From The Bank Holding Company Act Loophole, John Erwin Trytek

Pepperdine Law Review

Nonbank banks represent the financial institutions' recent attempt to avoid the regulations of the Bank Holding Company Act. The evolution of the nonbank bank illustrates the vitality of financial markets and technological change. While banking regulatory statutes have remained static, the dynamics of technology and electronic banking have allowed financial institutions to transcend the state's traditional borders. When static federal regulations began to choke profits, financial institutions sought alternatives to traditional banking. The financial institutions stretched the fabric of banking regulations to their extreme, and the nonbank bank emerged through a loophole in the Bank Holding Company Act. This article …

Private Equity & Private Suits: Using 10b-5 Antifraud Suits To Discipline A Transforming Industry, Kenneth J. Black

Michigan Business & Entrepreneurial Law Review

This note demonstrates why private equity will no longer be able to avoid private investor suits as it has (mostly) done in the past and explores the industry’s response to a growing number of investor suits. Notably, the industry has already begun to shift its strategy from regulatory avoidance to regulatory capture, at least in part to avoid investor suits. Given these changes, this note proposes that the best way to maintain discipline in the transforming private equity market is to protect the ability of investors to bring private suits.

Contract Hope And Sovereign Redemption, Anna Gelpern

Georgetown Law Faculty Publications and Other Works

Sovereign immunity has served as a partial substitute for bankruptcy protection, but it has encouraged a minority of creditors to pursue unorthodox legal remedies with spillover effects far beyond the debtor-creditor relationship. The attempt to enforce Argentina’s pari passu clause in New York is an example of such a remedy, which relies primarily on collateral damage to other creditors and market infrastructure to obtain settlement from a debtor that would not pay. The District Court decision, now on appeal before the Second Circuit, may not make holding out more attractive in future restructurings – but it would make participation less …

Don’T ‘Screw Joe The Plummer’: The Sausage-Making Of Financial Reform, Kimberly D. Krawiec

Faculty Scholarship

This Article examines agency-level activity during the preproposal rulemaking phase—a time period about which little is known despite its importance to policy outcomes—through an analysis of federal agency activity in connection with section 619 of the Dodd–Frank Act, popularly known as the Volcker Rule. By capitalizing on transparency efforts specific to Dodd–Frank, I am able to access information on agency contacts whose disclosure is not required by the Administrative Procedure Act and, therefore, not typically available to researchers.

I analyze the roughly 8,000 public comment letters received by the Financial Stability Oversight Council in advance of its study regarding Volcker …

Keep It Light, Chairman White: Sec Rulemaking Under The Crowdfund Act, Andrew A. Schwartz

Publications

Title III of the JOBS Act, known as the CROWDFUND Act, authorizes the “crowdfunding” of securities, defined as raising capital online from many investors, each of whom contributes only a small amount. The Act was signed into law in April 2012, and will go into effect once the Securities and Exchange Commission (“SEC”) promulgates rules and regulations to govern the new marketplace for crowdfunded securities. This Essay offers friendly advice to the SEC as to how to exercise its rulemaking authority in a manner that will enable the Act to achieve its goals of creating an ultralow-cost method for raising …

Mapping The Future Of Insider Trading Law: Of Boundaries, Gaps, And Strategies, John C. Coffee Jr.

Faculty Scholarship

The current law on insider trading is remarkably unrationalized because it contains gaps and loopholes the size of the Washington Square Arch. For example, if a thief breaks into your office, opens your files, learns material nonpublic information, and trades on that information, he has not breached a fiduciary duty and is presumably exempt from insider trading liability. But drawing a line that can convict only the fiduciary and not the thief seems morally incoherent. Nor is it doctrinally necessary.

The basic methodology handed down by the Supreme Court in SEC v. Dirks and United States v. O'Hagan dictates (i) …

Shockwave: Lender Liability Under Cercla After United States V. Fleet Factors Corporation, Nicholas M. Kublicki

Pepperdine Law Review

No abstract provided.

The Volcker Rule's Hedging Exemption, Spencer A. Winters

Michigan Law Review First Impressions

The comment period for the proposed regulations to be promulgated under the Volcker Rule expired on February 13, 2012. The rulemakers received over 16,000 comments during that period, in what one commentator described as a "fecal storm." Though that description is hopefully an exaggeration, it is safe to say that the Rule's implementation has been contentious. The Volcker Rule, named for former chairman of the Federal Reserve Paul Volcker, is a component of the Dodd-Frank Act, which Congress passed in response to the recent financial crisis. The Rule's statutory provision charges the nation's financial regulators with issuing a body of …

The Federal Reserve As Last Resort, Colleen Baker

University of Michigan Journal of Law Reform

The Federal Reserve, the central bank of the United States, is one of the most important and powerful institutions in the world. Surprisingly, legal scholarship hardly pays any attention to the Federal Reserve or to the law structuring and governing its legal authority. This is especially curious given the amount of legal scholarship focused on administrative agencies that do not have anywhere near as critical a domestic and international role as that of the Federal Reserve. At the core of what the Federal Reserve does and should do is to conduct monetary policy so as to safeguard pricing, including that …

Bank Capital Regulation By Enforcement: An Empirical Study, Julie A. Hill

Indiana Law Journal

Improving commercial bank capital requirements has been a top priority on the regulatory agenda since the beginning of the 2008 financial crisis. Unfortunately, some of the information necessary to make informed decisions about capital regulation has been missing. Existing regulations establish numerical capital requirements. Regulators, however, have significant discretion to set higher capital requirements for individual banks. In considering necessary reforms, regulators often focus on specific numerical requirements but sometimes ignore enforcement efforts. Without clear information about capital enforcement, it is impossible to make informed judgments about the current capital regulation system.

This Article provides a more complete picture of …

Exile Without Process: The New York City Housing Authority's Unconstitutional Trespass Notice Program, Lauren J. Zimmerman

Cardozo Law Review

No abstract provided.

Marginalizing Risk, Steven L. Schwarcz

Faculty Scholarship

A major focus of finance is reducing risk on investments, a goal commonly achieved by dispersing the risk among numerous investors. Sometimes, however, risk dispersion can cause investors to underestimate and under-protect against risk. Risk can even be so widely dispersed that rational investors individually lack the incentive to monitor it. This Article examines the market failures resulting from risk dispersion and analyzes when government regulation may be necessary or appropriate to limit these market failures. The Article also examines how such regulation should be designed,including the extent to which it should limit risk dispersion in the first instance.

Capture Nuances In The Contest For Financial Regulation, Lawrence G. Baxter

Faculty Scholarship

Applying capture analysis in the hotly contested arena of financial regulation is difficult. Numerous regulators with widely differing missions and widely diverse stakeholders are involved. Regulators operate under widely differing authorizing legislation. They even function at different levels of government. Agencies are often at odds with each other when it comes to determining optimal public policy. Unlike policy disputes in many other areas of regulation, which can be settled by reference to scientific data, public policy in financial regulation rests profoundly on essentially contested economic ideologies. This makes financial policy doubly difficult: one the one hand, it requires deep expertise—and …

Promising To Be Prudent: A Private Law Approach To Mortgage Loan Regulation In Common-Interest Communities, Julia Patterson Forrester Rogers, Jerome Organ

Faculty Journal Articles and Book Chapters

This Article explores one possible private law prescription that may help common-interest communities avoid the financial disaster associated with foreclosure epidemics-a financing restriction that would limit (1) the ability of any homeowner in a common-interest community to borrow excessively against the value of her home, and (2) the ability of lenders to make loans that a homeowner does not have the ability to repay. Part I of this Article begins in the Great Depression with a discussion of Neponsit Property Owners' Association v. Emigrant Industrial Savings Bank, w exploring how the case both fostered the development of common-interest communities and …

Accountability And The Bureau Of Consumer Financial Protection, Susan Block-Lieb

Faculty Scholarship

Some industry and political actors oppose the Consumer Financial Protection Bureau (CFPB) on the grounds that its institutional design ensures its lack of accountability. Specifically, opponents point to the CFPB’s regulatory and financial independence and to the fact that a single director heads the Bureau rather than a bipartisan panel of commissioners. But to focus on the Bureau’s financial independence and single director misses the distinctive political deal struck when Congress created the CFPB. The CFPB has been uniquely and intentionally structured to insulate it not only from interest group influence and executive interference, but also from congressional control, while …

A Current Assessment Of Some Extraterritorial Impacts Of The Dodd-Frank Act With Special Focus On The Volcker Rule And Derivatives Regulation, Lawrence G. Baxter

Faculty Scholarship

As the world struggles to emerge from the Global Financial Crisis the vision of a harmonious framework of global financial regulation seems as distant as ever. Important progress made by international committees such as the Basel Committee on Banking Supervision and the Financial Stability Board notwithstanding, there seem to be increasing signs of unilateral, extraterritorial action by major jurisdictions, including the United States. This paper reviews the framework created by the US financial reforms, in particular anti money laundering provisions, the Volcker Rule and the proposed OTC derivatives margin requirements, and considers some of the dilemmas presented by modern global …

Understanding Regulatory Capture: An Academic Perspective From The United States, Lawrence G. Baxter

Faculty Scholarship

Although it sometimes seems that financial regulatory agencies have been entirely captured by the larger players in the industry they regulate, a closer examination reveals that a variety of factors contribute to policy outcomes in this arena. Agencies have different agendas and stakeholders, and banks often perform quasi-governmental roles that blur the line between the captors and the captured. The real danger is that public policy can be distorted as a result of excessive influence by one set of interests at the expense of others. This danger is best thwarted or at least mitigated through the application of a range …

State Administrative Legal Review On The Bill Of Retraction Law Of Corrupted Assets In Eradication Effort Of Corruption In Indonesia, Dian Puji Simatupang

Indonesia Law Review

Since eradicating corruption having been continously encouraged by late governments – and until now – , there would not be less important as to retracting the corrupted assets. There are many aspects to be considered in doing such action, such as manifesting the legal aspects of administrative law, and so other applied national regulations. By these regulations, such as Law No. 7 of 2006 on Ratification of United Nations Convention against Corruption, 2003 (Konvensi Perserikatan Bangsa Bangsa Anti-Korupsi, 2003), Law Number 25 of 2003 On Amendment to Law Number 15 of 2002 on Money Laundering, Act 30 of 2002 on …

On Land (Wealth) Distribution: A Cultural Approach To Justice In Indonesia, Suparjo Suparjo

Indonesia Law Review

This article re-examines the Indonesian land distribution policy in light of Pancasila , the five core values of the Indonesian constitution. Furthermore, the article also analyzes social problems in Indonesia from the legal and cultural point of view. Inspired by Javanese shadow puppet plays and Pancasila values, analysis shows that that land distribution policy in Indonesia does not support the goal of the country. The policy does not adhere to Pancasila values and the cultural values adopted by the Indonesian people. Hence I will try to give a recommendation for better regulation in land distribution. Evidences will be given to …

Derivatives: A Twenty-First Century Understanding, Timothy E. Lynch

Faculty Works

Derivatives are commonly defined as some variation of the following: a financial instrument whose value is derived from the performance of a secondary source such as an underlying bond, commodity or index. But this definition is both over-inclusive and under-inclusive. Thus, not surprisingly, derivatives are largely misunderstood, including by many policy makers, regulators and legal analysts. It is important for interested parties such as policy makers to understand derivatives, because the types and uses of derivatives have exploded in the last few decades, and because these financial instruments can provide both social benefits and cause social harms. This Article presents …

State Attorneys General's Use Of Concurrent Public Enforcement Authority In Federal Consumer Protection Laws, Amy Widman, Prentiss Cox

Cardozo Law Review

Recent scholarly and legislative interest in state enforcement of federal law has led to the need for an empirical understanding of how and when these enforcement powers are used. This Article reports on an examination of the use by state attorneys general of sixteen federal consumer protection laws that expressly allow for state enforcement. The data are sorted and analyzed by both single state actions and multistate actions over time, and by the involvement of federal agencies in the state cases. The data reveal a measured use of such powers by state attorneys general and robust state and federal cooperation …

Patent, Technology, And The Role Of University, Agus Sardjono

Indonesia Law Review

University has significant contribution to the development of nanotechnology. The role of university can be implemented through the TTLO, particularly in an effort to build a bridge for bottom-up nanotechnology for commercial purposes. There will be an increasingly significant link between the patent system and the university role in the development of nanotechnology.

Credit Default Swaps And Clearing, Nazanin Baseri

Legislation and Policy Brief

In an article from 2000, an investigative journalist from The Banker warned against the hidden dangers of credit default swaps (CDS). Although CDSs can be a useful financial instrument for the banking industry, the article warned of the anonymity of credit derivatives, lack of transparency, and the potential for disaster. In an unfortunately accurate conclusion, the journalist opined that a crisis might occur because banks may not put in place the proper risk control systems in time to avert a disaster. Fast forward eight years and the financial meltdown of 2008 developed into one of the largest economic disasters in …

Capture In Financial Regulation: Can We Redirect It Toward The Common Good?, Lawrence G. Baxter

Faculty Scholarship

“Regulatory capture” is central to regulatory analysis yet is a troublesome concept. It is difficult to prove and sometimes seems refuted by outcomes unfavorable to powerful interests. Nevertheless, the process of bank regulation and supervision fosters a closeness between regulator and regulated that would seem to be conducive to “capture” or at least to fostering undue sympathy by regulators for the companies they oversee. The influence of very large financial institutions has also become so great that financial regulation appears to have become excessively distorted in favor of these entities and to the detriment of many other legitimate interests, including …

Irs's Recent Uncertain Tax Positions Initiative: A Tangle Of Accounting, Tax And Privilege Issues, 9 Depaul Bus. & Comm. L.J. 401 (2011), Kathryn J. Kennedy

UIC Law Open Access Faculty Scholarship

Given the extremely limited source of resources available to the IRS in recent years, it's not surprising that it is exploring all sorts of avenues to increase its efficiency, particularly relying on corporate taxpayers to self report questionable tax positions. Under the banner of "corporate governance" and "transparency," the Service issued a series of proposals in 2010 requiring disclosure of uncertain tax positions ("UTPs") by corporate taxpayers. The Service essentially piggybacked on the recently imposed 2006 audit requirements that reserves be posted for contingent tax liabilities (i.e., tax positions that could later not be sustained, and therefore had to be …