Banking and Finance Law Commons^™

The Future Of Ai Accountability In The Financial Markets, Gina-Gail S. Fletcher, Michelle M. Le

Faculty Scholarship

Consumer interaction with the financial market ranges from applying for credit cards, to financing the purchase of a home, to buying and selling securities. And with each transaction, the lender, bank, and brokerage firm are likely utilizing artificial intelligence (AI) behind the scenes to augment their operations. While AI’s ability to process data at high speeds and in large quantities makes it an important tool for financial institutions, it is imperative to be attentive to the risks and limitations that accompany its use. In the context of financial markets, AI’s lack of decision-making transparency, often called the “black box problem,” …

Regulating Global Stablecoins: A Model-Law Strategy, Steven L. Schwarcz

Faculty Scholarship

Digital currencies have the potential to improve the speed and efficiency of the payment system. The principal challenge is retail: to facilitate day-to-day payments among consumers as an alternative to cash, both domestically and across national borders. Two models of digital currencies are becoming viable: central bank digital currencies and nongovernment-issued currencies that are backed by assets having intrinsic value (stablecoins or, when widely used internationally, global stablecoins). Because they are not government issued, global stablecoins present complex and novel cross-border regulatory challenges, including managing the costs of complying with a multitude of national laws and ensuring international legal enforceability. …

The Rules Of Professional Responsibility And Legal Finance: A Status Update, Anthony J. Sebok

Articles

Legal finance occurs when strangers fund litigation for profit. Traditionally looked upon with suspicion in the common law, and limited by the doctrines of champerty and maintenance, legal finance is now a thriving part of the American legal landscape. Legal finance has been promoted as a solution to the access-to-justice problems facing working and middle class Americans, as well as a new asset class for Wall Street. At the center of legal finance, however, are lawyers – not the lawyers who write the contracts for the financing – but the lawyers for the cases being financed.
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Steering Loan Modifications Post-Pandemic, Pamela Foohey, Dalie Jimenez, Christopher K. Odinet

Articles

As part of federal and state relief programs created during the COVID-19 pandemic, many American households received pauses on their largest debts, particularly on mortgages and student loans. Others may have come to agreements with their lenders, likewise pausing or altering payment on other debts, such as auto loans and credit cards. This relief allowed households to allocate their savings and income to necessary expenses, like groceries, utilities, and medicine. But forbearance does not equal forgiveness. At the end of the various relief periods and moratoria, people will have to resume paying all their debts, the amounts of which may …

Corruption In University Admissions And The Administrative Allocation Of Scarce Goods, L. Burke Files, Roger E. Meiners, Andrew P. Morriss

BYU Law Review

The Varsity Blues investigation uncovered a seamy side of university admissions. Multiple wealthy parents were indicted for securing their children s admission to selective institutions through bribery. Despite the publicity the indictments and guilty pleas received, and the public schadenfreude over the sight of celebrities being arrested, the investigation is most notable for what it did not do: it did not deploy the federal government's arsenal of anti-money laundering and anti-corruption tools against the universities involved. This represents a significant missed opportunity to address the serious problems that arise from rationing access to selective institutions via opaque, easily manipulated admissions …

Rekonstruksi Undang-Undang Perbankan Untuk Mewujudkan Perlindungan Nasabah Penyimpan Yang Integratif Dan Berkepastian Hukum, Danu Febrianto, Joni Emirzon, Febrian Febrian

Jurnal Hukum & Pembangunan

Banks have an important role in economic development through their function by collecting funds from the public in the form of deposits and channeling them to the public in the form of credit in order to improve the standard of living of the people at large. Currently the banking business is regulated in Act Number 7 of 1992 concerning Banking as amended by Act Number 10 of 1998 (abbreviated as "Banking Act”). In a period of 20 years from 1998 to 2018, there have been developments in regulations relating to the depositors protection which are scattered in various laws and …

Tindak Pidana Pencucian Uang Yang Dilakukan Oleh Korporasi: Studi Kasus Putusan Pengadilan Negeri Nomor: 64/Pid.Sus/Tpk/2016/Pn.Bgl, Jeanny Jessica

Jurnal Hukum & Pembangunan

The typologies of money laundering are very closely related to corporate activities, which the activities of corporation are involved indirectly or are associated with financial institutions that made corporations very high risk as criminal offender of money laundering crimes. The handling of money laundering cases that corporation as subjects have only been carried out in Bengkulu with the corruption as primary criminal act, whereas will be expected that the application of corporations as subjects of money laundering crimes will also trigger other law enforcement agencies to uncover money laundering cases that made by corporations

Mind The Gap: A Comparative Approach For Fixing Volcker, Learning From Liikanen, And Using Vickers To Repair The U.S. Banking System, Rachel Sereix

Duke Journal of Constitutional Law & Public Policy Sidebar

After the 2008 financial crisis, Congress, courts, and international banking agencies alike determined that their current banking infrastructures were inadequate to prevent such crises in the future. The Dodd-Frank Wall Street Reform Acttried to solve the problem by reducing derivatives-related risk through legislative provisions that increased capital and liquidity requirements for all banks. Yet, banks continued to find means to subvert the system and Congress remained relatively silent on the issue after the passage of Dodd-Frank—failing to amend Dodd-Frank in any meaningful way. Looking towards European peers for guidance about how to reform the United States’ banking regime has often …

Lessons Learned: William Nelson, Sandra Ward

Journal of Financial Crises

William Nelson was deputy director, Division of Monetary Affairs, at the Federal Reserve Board during the Global Financial Crisis of 2007–09 (GFC). As the nation’s central bank, chief financial regulator, and lender of last resort, the Federal Reserve Board took the lead in setting monetary policy and stabilizing the financial system during the crisis.

Nelson’s responsibilities at the Fed during the crisis included analysis of monetary policy and discount window policy as well as financial institution supervision, and he regularly briefed the board and the Federal Open Market Committee. He developed special expertise in designing liquidity facilities and was a …

The Power Of Being Present: Lessons From Diplomacy In Latin America And The Caribbean For The Private Sector, Kimberly Breier, Daniel Korn

University of Miami Inter-American Law Review

Successful modern diplomacy and private sector engagements require being physically present. Based on the experience of the authors in diplomacy and corporate government affairs, this article argues that the trust that forms the basis of effective diplomacy and corporate engagement with the communities in which they operate is established best through direct physical interaction. With examples from Latin America and the Caribbean, the article explores how both diplomacy and corporate government affairs have evolved into a model of being present that emphasizes seeking to empower local populations. The article delves into how and why the United States carries out its …

Regulation Best Interest: Is The Sec Finally Choosing Main Street Over Wall Street?, Ana Marcos

University of Miami Business Law Review

No abstract provided.

Ftc Enforcement Authority In The Modern Era: A Commission In Crisis?, Brandon Mantilla

University of Miami Business Law Review

This note provides a brief history of the Federal Trade Commission (FTC)’s enforcement authority before analyzing the U.S. Court of Appeals for the seventh Circuit’s circuit-splitting decision in FTC v. Credit Bureau Center, LLC. As the Supreme Court prepares to tackle questions surrounding authority to seek monetary relief, I contextualize how enforcement authority has historically been derived before analyzing how the issue may be resolved. Doing so involves engaging several cases that may prove consequential in determining the outcome and outlines potential legislative solutions to the battle over restitution. Before arriving at the most likely scenarios, a view of the …

Proving Economic Loss For In-And-Out Traders In Light Of First Solar, Daniel Roy Settana Iii

University of Miami Business Law Review

Federal courts have grappled with the issue of whether or not to include in-and-out traders in federal securities class action lawsuits. One set of courts has excluded in-and-out traders on the grounds that they could not prove loss causation, while another set of courts has included in-and-out traders because of the possibility that they could prove that they had suffered a loss. In Mineworker’s Pension Scheme versus First Solar, Inc., the Ninth Circuit recently addressed what should be the correct standard for loss causation. While the Ninth Circuit’s decision resolved its own intra-circuit split, the Court’s decision widened an already …

The Occ Fintech Charter And The Bank Holding Company Act, Lauren Bomberger

University of Miami Business Law Review

The definition of a bank under the Bank Holding Company Act of 1956 (“BHCA”) has changed several times since the statute was first enacted. Congress has identified a number of underlying rationales for applying the BHCA to certain entities thus necessitating a change in the definition. Recent innovations in technology, however, have made it challenging to adapt the U.S. financial regulatory regime to these advances, particularly for the financial technology (“FinTech”) industry. The Office of the Comptroller of the Currency’s (“OCC”) FinTech charter is one example of an attempt by a U.S. financial regulator to grapple with emerging technologies in …

Good Corporate Governance Policies And Disclosure Mechanisms In Startup Companies, Yahel Kaplan

University of Miami Business Law Review

In the past decades, particularly following the collapse of huge corporation such as WorldCom and Enron due to dubious or illegal financial management, countries began gradually increasing the oversight of publicly traded companies with few jurisdictions conjuring recommended corporate governance codes (RCGC) to ensure sufficient oversight, reduce manager’s ability to loot their companies, and ensure that shareholders’ and stakeholders’ interests are monitored effectively by companies. While RCGC was intended namely for public company, several organizations called for the adoption of RCGC in startup companies. Startup companies suffer from various failures which the classic corporate laws are not equipped to address …

Cost Structures In American Commercial Banks Under $10 Billion: Trend Analysis With Policy Considerations, Thomas Stucker

University Honors Program

Cost structures in the banking have historically been a point of study for economists, but many existing economies of scale studies use highly restricted samples. I compiled quarterly data from 2002-2020 from the Federal Financial Institutions Examination Council’s Uniform Bank Performance Report to estimate the relationship between bank size (measured by total assets) and bank overhead (noninterest) expense for US banks under $10 billion in total assets. I included a continuous time trend as well as binary time variables for the 2008 recession period and the post-Dodd-Frank era in a multiple linear regression model. My estimation found statistically significant evidence …

Avoiding Wasteful Competition: Why Trading On Inside Information Should Be Illegal, Michael D. Guttentag

Brooklyn Law Review

This article offers a new and compelling reason to make all trading based on inside information illegal. The value realized by trading on inside information is unusual in two respects. First, inside information is produced at little or no incremental cost and is nevertheless quite valuable. Second, profits made from trading on inside information come largely at the expense of others. When the value of something exceeds the cost to produce it, a wasteful race to be the first to capture the resulting surplus is likely to ensue. Similarly, resources expended solely to take something of value from others are …

Hostile Restructurings, Diane L. Dick

Washington Law Review

The conventional wisdom holds that out-of-court loan restructurings are mostly consensual and collaborative. But this is no longer accurate. Highly aggressive, nonconsensual restructuring transactions—what I call “hostile restructurings”—are becoming a common feature of the capital markets. Relying on hypertechnical interpretations of loan agreements, one increasingly popular hostile restructuring method involves issuing new debt that enjoys higher priority than the existing debt; another involves transferring the most valuable collateral away from existing lenders to secure new borrowing.

These transactions are distinguishable from normal out-of-court restructurings by their use of coercive tactics to overcome not only the traditional minority lender holdout problem, …

Structural Barriers To Inclusion In Arbitrator Pools, Nicole G. Iannarone

Washington Law Review

Critics increasingly challenge mandatory arbitration because the pools from which decisionmakers are selected are neither diverse nor inclusive. Evaluating diversity and inclusion in arbitrator pools is difficult due to the black box nature of mandatory arbitration. This Article evaluates inclusion in arbitrator pools through a case study on securities arbitration. The Article relies upon the relatively greater transparency of the Financial Industry Regulatory Authority (FINRA) forum. It begins by describing the unique role that small claims securities arbitration plays in maintaining investor trust and confidence in the securities markets before describing why ensuring that the FINRA arbitrator pool is both …

Qui Tam And The Bank Secrecy Act: A Public-Private Enforcement Model To Improve Anti-Money Laundering Efforts, Giovanni Scarcella

Fordham Law Review

Cartels, terrorists, fraudsters, and other criminals face a problem: when they receive the proceeds from their illicit activities, how can they get this money into their bank accounts without raising regulatory eyebrows? The Bank Secrecy Act (BSA) has established a complex regulatory regime, imposing on banks the duty to assess the risks presented by their clients, to monitor the transactions they process, and to report transactions that contain indicia of money laundering and other criminal activity to the Financial Crimes Enforcement Network (FinCEN). In response, criminals utilize increasingly sophisticated means to obfuscate the origins of these transactions and disguise their …