Banking and Finance Law Commons^™

How Active Cftc Enforcement Could Benefit Crypto, Carol R. Goforth

Pace Law Review

Commodity Futures Trading Commission (CFTC) crypto enforcement rose to record levels in 2023, prompting applause from some observers and criticism from others. In fact, the CFTC’s enforcement agenda is not out of step with other federal agencies such as the Securities and Exchange Commission (SEC), which has also been incredibly active in the crypto industry. It might seem that this is bad news for crypto, given that both the CFTC and SEC have been angling to become the primary regulator for these new assets. In reality, proof that the CFTC is active in enforcing the law against crypto entrepreneurs and …

Adopting Permissioned Blockchain Models To Enhance Consumer Protection And Comply With Consumer Protection Laws, Erika Buenrostro

Featured Student Work

Blockchain technology enables decentralized, peer-to-peer transactions and data management, offering transparency while raising data privacy and consumer protection concerns. As the current administration promotes blockchain adoption, including cryptocurrency, more users and businesses will likely integrate the technology. This thesis provides a framework to help businesses adopt blockchain while ensuring compliance with the California Consumer Privacy Act (CCPA). To prevent data mishandling and legal penalties, consumers and businesses must stay informed about the risks and evolving state privacy laws.

A CCPA-compliant approach retains blockchain’s benefits through a permissioned model, storing only non-personal (neutral) data on-chain while keeping personal information off-chain in …

Efta Coverage Of Modern Consumer Wire Transfers: Consumer Financial Regulation In The Wake Of Loper Bright, Benjamin Gygi

Fordham Law Review

The rise of online banking has led to a proliferation of consumer fraud. Schemes aimed at stealing consumer funds using wire transfers executed through online banking portals have proven particularly devastating to consumers because of a perceived loophole in the Electronic Fund Transfer Act (EFTA) that leaves consumers with full liability for funds stolen through wire transfers. Consumer advocacy groups, and most notably the New York Attorney General, have recently argued that this loophole does not really exist; they claim that the EFTA’s text conclusively covers certain parts of modern wire transfer processes initiated through online banking portals. Considering the …

Central Clearing The U.S. Treasury Market, Yadav Yesha, Joshua Younger

Vanderbilt Law School Faculty Publications

In October 1956, the famed U.S. architect Frank Lloyd Wright revealed a radical and ambitious new project. The Illinois would be a mile high, four times the height of the Empire State Building (at that point still the tallest building in the world). Key to this vision was a type of foundation known as the taproot, which offered a means by which to secure such a towering edifice while still enabling architectural creativity-or, as Wright put it, to "make rigidity possible at [ ] extreme heights." A similar design had previously protected another Wright design, the Imperial Hotel in Tokyo, …

Central Clearing The U.S. Treasury Market, Yesha Yadav

Vanderbilt Law School Faculty Publications

This Essay considers this regulatory response. It focuses on the introduction of mandatory central clearing for most trades in U.S. Treasuries-a proposal seeking to significantly reshape the day-to-day functioning of the Treasury market.10 Central clearing is a well-established means by which to reduce the risk of loss associated when trading parties default. It does so by providing a well-resourced and informed central counterparty (CCP) to step into and stand behind trades. CCPs help promote stability by reducing the probability of, and potential losses associated with, the default of a trading counterparty. But they also impose certain costs on market participants …

Shadow Banking And Securities Law, Gabriel Rauterberg, Jeffery Y. Zhang

Faculty Scholarship

Shadow banking may be the single greatest challenge facing financial regulation. Financial institutions that function like banks, but fall outside the scope of banking regulation — aptly termed “shadow banks” — were at the heart of the Global Financial Crisis and most episodes of serious financial stress since then. Scholars have largely focused on one response to this problem: extending traditional banking regulation to shadow banks. Yet more than fifteen years after the crisis, major regulatory efforts along this route have stalled.

In this Article, we explore the uneasy case for greater regulation of shadow banking through a different route …

Regionalism And The Federal Reserve Banks, Kathryn Judge, Lev Menand

Faculty Scholarship

Regionalism is central to our country’s central banking system. Rather than rely on a single organization to set monetary policy and oversee banks, Congress created a multiplicity of bodies including twelve Federal Reserve Banks (FRBs), each designed to operate in a different part of the country. These FRBs are an early and undertheorized example of how the federal government uses regional bodies to formulate and administer federal policy. When they were first authorized in 1913, their regional character assuaged concerns about centralizing power over the economy. Today, the FRBs continue to play a number of important roles, helping to shape …

Shadow Investment Companies, William A. Birdthistle, Gabriel Rauterberg, Jeffery Y. Zhang

Faculty Scholarship

Stablecoins are cryptocurrencies designed to track the value of fiat currency, most commonly the U.S. dollar. Over the past decade, they have grown from a niche innovation into the primary gateway between crypto markets and the traditional financial system, with daily trading volumes exceeding $100 billion. Despite their scale and centrality, stablecoin issuers occupy an uncertain and increasingly contested regulatory space.

This Article argues that the largest stablecoin issuers — such as Circle and Tether— are best understood not as banks or payments firms, but as investment companies under the Investment Company Act of 1940. As a matter of statutory …

Shadow Banking And Securities Law, Gabriel V. Rauterberg, Jeffery Yufeng Zhang

Articles

Shadow banking may be the single greatest challenge facing financial regulation. Financial institutions that function like banks, but fall outside the scope of banking regulation—aptly termed “shadow banks”—were at the heart of the Global Financial Crisis and most episodes of serious financial stress since then. Scholars have largely focused on one response to this problem: extending traditional banking regulation to shadow banks. Yet more than fifteen years after the crisis, major regulatory efforts along this route have stalled.

In this Article, we explore the uneasy case for greater regulation of shadow banking through a different route—securities law. Our first contribution …

Peran Financial Technology Peer-To-Peer (P2p) Lending Dalam Mendukung Pengembangan Umkm Studi Kasus : Kampoeng Batik Laweyan, Isa Bisthomi, Januar Dwi Irawan, Launa Qisti

Technology and Economics Law Journal

Micro, Small, and Medium Enterprises (MSMEs) are the backbone of Indonesia's economy, absorbing 97% of the non-agricultural workforce and making a significant contribution to GDP. However, limited access to formal financing remains a major obstacle. Conventional banks often view MSMEs as high-risk, making it difficult for them to obtain loans. Peer-to-Peer (P2P) lending emerges as a technology-based solution, offering easier access to financing with lighter requirements and faster processes. This study aims to examine the role of P2P lending in enhancing financial inclusion and the capacity of MSMEs, focusing on the case study of Kampoeng Batik Laweyan in Solo. The …

Penggunaan Kredit Sindikasi Untuk Pendanaan Proyek Infrastruktur Ketenagalistrikan Pada Pt Pln (Persero), Fadillah Isnan, Dwi Randi Sulistiyono, Fitrah Ramadhian

Technology and Economics Law Journal

The Indonesian government continues to strive to develop infrastructure, including electrical infrastructure, which serves as the main driver and foundation of the economy. The task of managing the electricity sector is entrusted to the state through state-owned enterprises, with PT PLN (Persero) as the main implementer. The planning for these electricity infrastructure projects has been outlined in the 2021-2030 Electricity Supply Business Plan (RUPTL). To support the realization of these projects, substantial funding is required, one of which is through a syndicated loan scheme. Syndicated loans, which involve a number of financial institutions, offer organized and efficient financing solutions with …

Pembiayaan Syariah Pada Esco Dalam Menunjang Efisiensi Energi, Rizki Aulia, Theo Sammaranta Siregar, Yuda Puji Agustin

Technology and Economics Law Journal

Climate change and the need to reduce energy consumption make energy efficiency an important solution to achieve sustainability. Energy Services Companies (ESCOs) play a central role in the implementation of energy efficiency technologies through various services such as consulting, project development, and verification of energy savings. However, one of the main challenges in this implementation is the need for significant initial investment, which is often an obstacle for project owners, especially in developing countries where high financial risk is a major obstacle. Islamic financing, based on the principles of Islamic law, offers an attractive alternative to overcome such challenges. The …

Tindak Pidana Korupsi Yang Dilakukan Oleh Notaris Atas Penyalahgunaan Wewenang Dalam Penerbitan Covernote Untuk Pencairan Kredit (Studi Putusan Pengadilan Tinggi Medan Nomor 9/Pid.Sus-Tpk/2023/Pt.Mdn), Marcellina Siti Nabila

Technology and Economics Law Journal

This paper analyzes the role of covernotes in credit agreements and the consequences of notaries' abuse of authority, leading to corruption. This paper uses a doctrinal research method. A covernote is a written statement containing a notary's promises or commitment to complete their duties, regarding requirements that have not been met by the parties to issue a deed. The Law on Notary Publics does not contain any regulations or mention of covernotes. The existence of covernotes arises from the urgent need for banks to provide temporary documentation for executing credit agreements. Bank Indonesia Regulation Number 20/8/PBI/2018 concerning the Loan-to-Value Ratio …

Modus Korupsi Perbankan: Penyelewengan Klaim Asuransi Debitur Meninggal Dunia, Muhammad Alfan Nur Zuhaid, Navy Sasmita, Radite Panji Perdana

Technology and Economics Law Journal

Lending by banks is generally covered by insurance as mitigation in the event of the borrower's death. The insurance can be in the form of insurance issued by general insurance companies or life insurance companies that have the aim of protecting not only the bank as a creditor but also the borrower's heirs so that the borrower's heirs do not need to be burdened to repay the remaining loans and on the other hand the bank's liquidity and profitability are maintained. At an ideal level, if the borrower dies, the bank will make an insurance claim to the insurance company, …

Emortgage And Crypto-Mortgage In Home Finance, Julia Patterson Forrester Rogers

Pepperdine Law Review

Most home mortgage loans today are documented on physical paper, but they are increasingly closed as eMortgages. The move to electronic documents is inevitable and will ultimately be a positive change for lenders and borrowers. However, additional regulation is needed to address issues raised by electronic home mortgage closings and the “crypto-mortgage,” a mortgage loan with the obligation evidenced by or tethered to a non-fungible token. Lenders have traditionally required that home mortgage loans be evidenced by a wet-signed paper promissory note to gain the advantages and the certainty of Article 3 of the Uniform Commercial Code (UCC) governing negotiable …

Sanctioning Negligent Bankers, Kyle D. Logue, W. Robert Thomas, Jeffery Y. Zhang

Law & Economics Working Papers

Over just one week in 2023, depositor runs at a few U.S. banks threatened a worldwide banking crisis. Afterwards, the United States would suffer three of the biggest bank failures in the nation’s history; in Europe, Credit Suisse became the largest financial institution to fail since the 2007-2008 Global Financial Crisis. Stunned by this lightning-fast panic, lawmakers, regulators, and academics have called for significant changes to the U.S. financial regulatory framework. Leading among these proposals are calls to improve supervisory oversight of banks, to tighten existing regulations on banks, and to increase deposit insurance limits. But these proposals alone are …

Bank Fragility After Mergers, Jeffrey Jou, Teng Wang, Jeffery Y. Zhang

Law & Economics Working Papers

Do banks become more fragile after merging? By constructing a novel forward-looking measure of fragility and exploiting staggered interstate banking deregulation as exogenous shocks to bank mergers, we show that the loan portfolios of merged U.S. banks become more vulnerable to adverse economic conditions. However, merger size matters. The increase in fragility is driven almost entirely by mega-mergers of large banks, suggesting the presence of moral hazard. In addition, we find that increased geographic or portfolio diversification following mergers does not offset the increase in fragility. If anything, mergers between large banks that have significantly dissimilar portfolios can actually worsen …

Locating Consumer Financial Regulation, Nikita Aggarwal

Cardozo Law Review

Recent advances in data-driven technology in consumer financial markets, commonly referred to as “fintech,” have resurfaced the question of whether and to what extent data, particularly consumers’ personal data, should be a locus for regulatory intervention in these markets. While innovation in fintech and the accompanying increase in the processing of personal data offer to improve the functioning of consumer financial markets, like all advances in technology, they also come with costs and risks. In 2024, in a move that favored the regulation of personal financial data per se and many of the traditional features of personal data protection regulation, …

Mark Need Leading Iu Ventures Fellows Cohort, Including Two Maurer Students, James Owsley Boyd

Keep Up With the Latest News from the Law School (blog)

An Indiana University Maurer School of Law faculty member will lead—and two of its students participate—in the fourth cohort of IU Ventures, the university’s early-stage venture and angel investment arm.

Mark Need, clinical professor and director of the Law School’s Elmore Entrepreneurship Law Clinic, will lead the 13-student cohort—the largest yet—which includes David Dillon, a second-year JD-MBA candidate, and 1L student Klaus Griesemer.

Louboutin Lawfare: Exploring Conceptions Of Sanctions' Utility Through Export Controls On Luxury Goods, Vinita R. Singh

Northwestern University Law Review

There is widespread consensus amongst scholars that sanctions—the deliberate withdrawal of customary trade and financial relations—do not work. Despite this perception, states are deploying sanctions at an increasing rate. This Article explains this paradox by arguing the predominant notion of sanctions’ utility employed by scholars is unduly constrained, narrowly focusing on the ability of such measures to modify the behavior of sanctioned parties while disregarding the alternative benefits this instrument can deliver. To support this argument, this Article uses export controls on luxury goods deployed in connection with the Russo–Ukraine War as a case study. Under prevailing perceptions of sanctions’ …