Banking and Finance Law Commons^™

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 …

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’ …

Transformative Impact Of Ai And Digital Technologies On The Fintech Industry: A Comprehensive Review, Soudeh Pazouki, Behdad Jamshidi, Armia Jalali, Arya Tafreshi

Finance Faculty Publications

This paper examines the impact of artificial intelligence (AI) and digital technologies on the financial technology (FinTech) industry and demonstrates how AI- enabled strategies are increasing the ability of businesses not only to grow, but also to better serve their customers through operational efficiencies. But as immersive as the technological advancements may be, they present challenges in connection with increasingly complicated licensing regulations and a constantly evolving technological landscape. We examine the way AI and algorithms are streamlining workflows, enhancing productivity and expanding access to financial resources for traditionally under – served populations. The paper also discusses the macroeconomic implications …

Voting Matters: Materiality Considerations And The Shareholder Vote, Renee M. Jones

Seattle University Law Review

For the shareholder franchise to have meaning, shareholders must have access to relevant information to inform their voting decisions. The securities laws’ disclosure requirements play an essential role in informing the shareholder vote.

This Essay focuses on the question of the materiality of information in the context of shareholder voting. It addresses the question of whether ESG-related information is material, positioning the materiality inquiry within the context of shareholders’ voting decisions. It explores the definition of materiality with a focus on the “reasonable investor” concept embedded within the definition. The Essay argues that the implicit expectations of many commentators that …

Reflections On The Launch Of The Inspection Panel And People-Centered Accountability, David B. Hunter

Perspectives

No abstract provided.

Unprincipled Investor Bifurcations, Anita K. Krug

American University Law Review

The investment world is full of bifurcations—that is, divisions among groups of investors that the securities laws establish for the purpose of furthering the regulatory goal of investor protection. The notion behind these bifurcations is that only more wealthy investors should be permitted to invest in riskier investment products. However, as this Article details, a more pernicious bifurcation has emerged in recent years, alongside the growing popularity of exchange-traded funds, or “ETFs.” Investing in ETFs is desirable for many investors because ETF shares, unlike shares of mutual funds, can be traded throughout the day. In addition, ETFs allow investors to …

Introductory Remarks, Dana Welch

American University Business Law Review

The year 1925 proved to be eventful for the United States and for the world. The Scopes Monkey Trial placed evolution in the spotlight. The New Yorker published its first issue. The "Grand Ole Opry´ premiered on the radio as the WSM Barn Dance. And fascism threatened Europe as Benito Mussolini dissolved the Italian Parliament and declared himself "Il Duce," the dictator of Italy, while Adolf Hitler published the first volume of Mein Kampf, written from prison. On a lighter note, Washington, D.C., saw the first National Spelling Bee, won by Frank Neuhauser, an eleven-year-old from Kentucky who correctly spelled …

Through A Glass Darkly: How Securities Disclosures Give A Distorted View Of The Economy, Gerald F. Davis

Seattle University Law Review

Our understanding of the American economy often relies on stylized facts derived from mandatory disclosures by listed corporations. Data vendors like Standard & Poor’s vacuum up 10Ks and proxy statements into databases, and scholars distill these into tentative maps. This may have been adequate for a postwar economy centered on asset-heavy manufacturers, but it is increasingly out of step with an information-based economy. Companies listed on the stock market are fewer in number and less representative than they were, light in tangible assets and people, and heavy on IP. Basic facts such as what industry they are in are increasingly …

Shareholder Expression In A Time Of Heightened Political Tension, Aaron A. Dhir

Seattle University Law Review

In this article, I provide context for my forthcoming research project on shareholder proposals and racial equity audits. Since the murder of George Floyd in May of 2020, progressive shareholder actors have increasingly used the proposal mechanism to advance diversity, equity, inclusion, and justice-related goals. These proposals have frequently gone beyond requesting the usual corporate fare of diversity trainings, intersectionality workshops, affinity groups, etc. Instead, a more ambitious type of proposal asks corporate America to conduct racial equity audits, defined as “an independent, objective and holistic analysis of a company’s policies, practices, products, services and efforts to combat systemic racism …

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

Faculty Journal Articles and Book Chapters

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 …