Banking and Finance Law Commons^™

Making Banks Transparent, Robert P. Bartlett, Iii

Vanderbilt Law Review

It was March 2007, and in the Mediterranean resort of Monte Carlo, Matt King was making dire predictions about a collapse of the U.S. subprime housing market-a subject that must have seemed as inconsequential as it was foreign to most of this casino town's well- heeled visitors. But for Mr. King, head of quantitative credit strategy for Citigroup, the ramifications of rising subprime foreclosure rates were anything but inconsequential. Speaking at Citigroup's annual credit conference, King emphasized how subprime credit had been repackaged into securities such as collateralized debt obligations ("CDOs"), which now sat in large quantities on banks' balance …

Past, Present And Future Threats To Federal Safety Net Benefits In Bank Accounts, Margot F. Saunders, Johnson M. Tyler

North Carolina Banking Institute

No abstract provided.

Section 1044 Of Dodd-Frank: When Will State Laws Be Preempted Under The Occ's Revised Regulations, Danyeale I. Hensley

North Carolina Banking Institute

No abstract provided.

The Missing Lending Link: Why A Federal Loan Guarantee Program Is Critical To The Continued Growth Of The Solar Power Industry, Daniel K. Tracey

North Carolina Banking Institute

No abstract provided.

The Failed Nyse Euronext-Deutsche Borse Group Merger: Foreshadowing Future Consolidation Of The Global Stock Exchange Market, Christina D. Cress

North Carolina Banking Institute

No abstract provided.

A Review Of "The New Financial Deal" By David Skeel, Louis Massard

North Carolina Banking Institute

No abstract provided.

Why The Cfpb Should Reconsider Dodd-Frank's Prohibition On Yield Spread Premiums, Nicole M. Olvera

North Carolina Banking Institute

No abstract provided.

Living Wills: Can A Flexible Approach To Rulemaking Address Key Concerns Surrounding Dodd-Frank's Resolution Plans, Clay R. Costner

North Carolina Banking Institute

No abstract provided.

Fighting Yesterday's Battles: Proposed Changes To The Consumer Financial Protection Bureau, Alec C. Covington

North Carolina Banking Institute

No abstract provided.

International Regulatory Arbitrage Resulting From Dodd-Frank Derivatives Regulation, Benjamin M. Weadon

North Carolina Banking Institute

No abstract provided.

A Spirited Conversation Assessing The Risks And Benefits Of Big Banks, Center For Banking And Finance

North Carolina Banking Institute

No abstract provided.

Imf: Predatory Lender Or Latin America’S Best Chance?, Paul Thomas Smith

Political Science Theses and Capstones

Recently, there has been heated debate as to whether or not assistance from the International Monetary Fund has proven to be a great humanitarian effort or a scheme by Western governments to keep emerging Latin American countries in debt. The IMF partners with numerous governments in order to create a collective monetary community from which all may benefit in times of need. These partnered countries are also able to apply for assistance if they find themselves in monetary hardships. Some studies have shown that the IMF has been too heavy handed, while other studies have shown that recipient governments may …

Foreword For Regulation In The Fringe Economy Symposium, John P. Caskey

Washington and Lee Law Review

No abstract provided.

Mortgaging Human Capital: Federally Funded Subprime Higher Education, Jean Braucher

Washington and Lee Law Review

The for-profit higher education sector, primarily funded by federal student aid dollars, produces both the highest debts and defaults and lowest completion rates for its students. In response, the U.S. Department of Education (DOE) has promulgated the Gainful Employment Rule to require for-profit colleges and universities to meet either repayment or debt-to-income benchmarks to remain eligible to receive federal Higher Education Act funding. This Article describes the business model of the career colleges and their rapid growth over the last decade, the history of proprietary school regulation, the limited remedies for overindebtedness of former students, and the tests imposed by …

Regulating Online Peer-To-Peer Lending In The Aftermath Of Dodd–Frank: In Search Of An Evolving Regulatory Regime For An Evolving Industry, Eric C. Chaffee, Geoffrey C. Rapp

Washington and Lee Law Review

The 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act called for a government study of the regulatory options for on-line Peer-to-Peer lending. On-line P2P sites, most notably for-profit sites Prosper.com and LendingClub.com, offer individual “investors” the chance to lend funds to individual “borrowers.” The sites promise lower interest rates for borrowers and high rates of return for investors. In addition to the media attention such sites have generated, they also raise significant regulatory concerns on both the state and federal level. The Government Accountability Office report produced in response to the Dodd–Frank Act failed to make a strong recommendation …

Payday Lending, Bankruptcy, And Insolvency, Richard Hynes

Washington and Lee Law Review

Economic theory suggests that payday lending can either increase or decrease consumer welfare. Consumers can use payday loans to cushion the effects of financial shocks, but payday loans may also increase the chance that consumers will succumb to temptation or cognitive errors and seek instant gratification. Both supporters and critics of payday lending have alleged that the welfare effects of the industry can be substantial and that the legalization of payday lending can even have measurable effects on proxies for financial distress, such as bankruptcy, foreclosure, and property crime. Critics further allege that payday lenders target minority and military communities, …

Congress Protected The Troops: Can The New Cfpb Protect Civilians From Payday Lending?, Creola Johnson

Washington and Lee Law Review

In 2007, Congress enacted a law, commonly referred to as the Military Lending Act (MLA), which placed a 36% interest rate cap on several consumer loans, including payday loans, and prohibits lenders from engaging in several practices considered predatory. However, the MLA grants these protections only to active-duty military members and their dependent family members. In the wake of the mortgage foreclosure crisis, Congress passed and President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd–Frank Act), which creates a new federal agency, the Bureau of Consumer Financial Protection (CFPB), to focus on …

After The Great Recession: Regulating Financial Services For Low- And Middle-Income Communities, Ronald J. Mann

Washington and Lee Law Review

No abstract provided.

The Alliance Between Payday Lenders And Tribes: Are Both Tribal Sovereignty And Consumer Protection At Risk?, Nathalie Martin, Joshua Schwartz

Washington and Lee Law Review

No abstract provided.

The Damage Of Debt, Katherine Porter

Washington and Lee Law Review

No abstract provided.

Regulation Of Payday Loans: Misguided?, Paige Marta Skiba

Washington and Lee Law Review

Since payday lenders came on the scene in 1990s, regulation of their “predatory” practices has been swift and often severe. Fourteen states now ban payday loans outright. From an economist’s perspective, high-interest, short-term, small loans need not be a bad thing. Payday credit can help borrowers “smooth” consumption, unequivocally improving welfare as consumers borrow from future good times to help cover current shortfalls. These benefits of credit can accrue even at typical payday loan interest rates of 300%–600% APR. The question of whether payday credit actually assists borrowers in this way is an empirical one. In this Article, I review …

Payday Loan Prohibitions: Protecting Financially Challenged Consumers Or Pushing Them Over The Edge?, William M. Webster, Iv

Washington and Lee Law Review

As recovery from the economic downturn continues, American consumers face an unabated need for short-term, small-dollar credit. To cope with this need, millions choose to take out payday loans. Often the subject of controversy and criticism, these loans have become a mainstream credit option, considered by consumers alongside so-called “traditional” credit products offered by banks and credit unions. This article examines the issues surrounding payday loans, including consumer credit needs, critical options for fulfilling those needs and consumer rationale, from the perspective of Advance America, Cash Advance Centers, Inc., the country’s largest non-bank provider of cash advance services. When faced …

The Economics And Regulation Of Bank Overdraft Protection, Todd J. Zywicki

Washington and Lee Law Review

Consumer use of bank overdraft protection has risen rapidly over the past decade, leading to increased scrutiny and the imposition of new regulations. Public and political debate regarding overdraft protection has highlighted anecdotal stories about irresponsible college students who overdraw their accounts to buy a cup of coffee, thereby triggering substantial overdraft fees. But there has been little systematic examination of the safety and soundness or consumer protection issues implicated by the increased use of overdraft protection. Available evidence indicates that those who rely on overdraft protection tend to have low credit ratings and use overdraft protection to maintain short-term …

Credit On Wheels: The Law And Business Of Auto-Title Lending, Jim Hawkins

Washington and Lee Law Review

Despite the fact that they are used by millions of Americans, auto-title loans have received little attention in the legal literature about consumer credit. Friends and foes of title lending make confident statements about their net welfare effects, but we still lack empirical data on many of the central policy questions that title lending raises. This Article offers new evidence about the title lending transaction, paying special attention to the risks borrowers face when they use their vehicles as collateral for the loan. I gathered this evidence by obtaining new reports from state regulators about the title lending industry, examining …

Loan Sharks, Interest-Rate Caps, And Deregulation, Robert Mayer

Washington and Lee Law Review

The specter of the loan shark is often conjured by advocates of price deregulation in the market for payday loans. If binding price caps are imposed, the argument goes, loan sharks will be spawned. This is the loan-shark thesis. This Article tests that thesis against the historical record of payday lending in the United States since the origins of the quick-cash business around the Civil War. Two different types of creditors have been derided as “loan sharks” since the epithet was first coined. One used threats of violence to collect its debts but the other did not. The former has …

“Warning: Predatory Lender”—A Proposal For Candid Predatory Small Loan Ordinances, Christopher L. Peterson

Washington and Lee Law Review

Over a hundred different local governments around the country have adopted ordinances restricting small, high-cost loans. This trend reflects the solid majority of the American public that opposes the legality of triple-digit interest rate loans and the long historical tradition of treating payday and car-title lending as a serious civil offense or even a crime. Nevertheless, perhaps owing to limits on municipal power, local payday lending law has generated relatively little scholarship or commentary. This paper describes the existing local law governing small, high-cost consumer loans and proposes a more emphatic ordinance that better reflects the policy judgment of many …

Credit And Human Welfare: Lessons From Microcredit In Developing Nations, Alan M. White

Washington and Lee Law Review

Deregulation of usury laws, in the United States and in developing nations, has permitted various forms of small loans to be made to the poor and the working class, sometimes at very high prices. In the case of credit, more is not always better. A human development approach to evaluating the welfare impacts of credit products for the poor asks these questions: does a credit product or program increase income or consumption, achieve savings through investment in capital goods, or smooth consumption and avert crises, all at a reasonable cost? Or does the credit on balance redistribute income away from …

Product Suitability, Due Diligence And Management Responsibility: The New Regime Of Regulation 18b Of The Financial Advisers Regulations, Kee Yang Low

Research Collection Yong Pung How School Of Law

In response to the structured products crisis of 2008, many changes were made to the Singapore regulatory landscape over the past three years. More recently, in July 2011, the Financial Advisers Regulations (Cap 110, Rg 2, 2004 Rev Ed) was amended and an important new provision – reg 18B – was added. Regulation 18B requires a financial adviser and its senior management to conduct a comprehensive due diligence exercise before selling a new product. This comment considers reg 18B’s overall scheme, its interpretational difficulties, the demands of the diligence requirements, its interrelation with s 27 of the Financial Advisers Act …

Structured Notes Fiasco In The Courts: A Study Of Relevant Judgments In Taiwan Between 2009 And 2010, Christopher Chao-Hung Chen

Research Collection Yong Pung How School Of Law

The purpose of this article is to analyse relevant judicial decisions in Taiwan regarding structured notes sold to retail investors. Regarding pre-sale disputes, one issue was that investors failed to read contractual documents properly before signing contracts, so there was a question whether they could later claim a bank’s violation of its duty to explain. This article favours the view that an investor’s signature may exempt a bank’s duty, provided that investors are made aware of relevant warnings. In addition, for suitability assessment, relevant judgments show that customers were too easily classified as active investors based on a simple questionnaire. …

Refund Fraud? Real-Time Solution!, Richard Thompson Ainsworth

Faculty Scholarship

When seven million dependents vanished from the tax rolls in 1986 the IRS recovered three billion dollars in revenue. A simple enforcement measure was applied. Taxpayers were required to list the social security number (SSN) for any dependent they claimed on their tax return. Costing next to nothing to implement, the benefits of this enforcement action continue to this day.

A similar enforcement measure could be employed against refund fraud. Even though the solution is not as simple as that adopted in 1986, it is similar. The effort is worth making. The revenue loss is much larger. As before, the …