Banking and Finance Law Commons^™

The Mysterious Market For Post-Settlement Litigant Finance, Ronen Avraham, Lynn A. Baker, Anthony J. Sebok

Articles

Litigant finance is a growing and increasingly controversial industry in which financial firms advance a plaintiff money in exchange for ownership rights in the proceeds of the legal claim on a nonrecourse basis: A plaintiff must repay the advance only if compensation is ultimately received for the legal claim. The nonrecourse nature of this funding exempts it from most states’ consumer credit laws, enabling funders to charge higher interest and fees than would otherwise be permitted. When this funding involves ordinary consumers, critics of the industry contend that the uncapped interest rates exploit vulnerable litigants, while its defenders argue that …

Wells Fargo & Co. V. U.S.: A Potential Beginning Of The End Of The Objective Reasonable Basis Tax Penalty Defense, Beckett G. Cantley, Geoffrey C. Dietrich

University of Miami Business Law Review

The Internal Revenue Code (“IRC”) § 6662(a) permits the IRS to impose a twenty-percent (20%) accuracy-related penalty to an underpayment of tax, and there are several different defenses to this penalty depending on the facts of the case and the reason for the penalty.3 One of the most common accuracy-related penalties is the negligence penalty.4 Although there are multiple different reasons for the application of an accuracy-related penalty, only one penalty may be applied for each understatement.5 If a taxpayer faces the negligence penalty, one common defense is that the taxpayer’s return position has a reasonable basis under the relevant …

The Role Of Expropriation Clauses In Protection And Promotion Of Foreign Investments In Renewable Energy: An Essential But Overlooked Legal Consideration, Moosa Akefi Ghaziani, Mohammad Akefi Ghaziani

Indonesia Law Review

Today the world is tackling climate change. The global threat of energy poverty along with the growing need for energy has escalated this crisis. The promotion of renewable energy sources is widely known as the main solution to this challenge. Many International and regional agreements address various aspects of renewable energy development such as trade, transit, security, and investment. Foreign investment is recognised as a crucial prerequisite for the global deployment of renewable energy, since not all States have the financial and technological potentials to develop this sector. Various investment agreements are signed to facilitate and promote investments. These instruments …

Innovation Meets Regulation: Firrma’S Significance, The Treasury’S Dilemma, And The New Normal For Foreign Investment In The U.S. Venture Capital Ecosystem, Jonathan Aaron Horn

Pepperdine Law Review

One of the most powerful entities in the federal government is the little-known Committee on Foreign Investment in the United States (CFIUS), which is responsible for reviewing foreign investment transactions with U.S. businesses for potential national security threats. Originally, CFIUS was only able to review foreign investments that resulted in control of the U.S. company at issue, but the Foreign Investment Risk Review Modernization Act (FIRRMA) has significantly enhanced CFIUS’s scope to include review of minority investments. This Comment explores FIRRMA’s impact on foreign investment into the U.S. venture capital (VC) ecosystem and evaluates the uncertainty created for startups and …

Digital Euro And Ecb Powers, Seraina Neva Grünewald, Corinne Zellweger-Gutknecht, Benjamin Geva

Articles & Book Chapters

The use of cash in the euro area is declining. Accordingly, the EuropeanCentral Bank is exploring options for the design of a digital euro as a form of central bank money available to the public. This article addresses the key question of whether the Eurosystem is empowered to issue a digital euro and, if so, in what form. Based on a historical, teleological, and systematic interpretation, it argues that Article 128(1) TFEU serves as both a source of competence for the Eurosystem to issue a digital euro and a limitation to that competence. The Eurosystem’s powers are necessarily exclusive and …

Central Bank Of The Future Summary And Recommendations For Further Inquiry, Michael S. Barr, Adrienne A. Harris, Megan Kelly, Emma Macfarlane, Bryan Ricketts

Other Publications

Over the past two years, the University of Michigan’s Gerald R. Ford School of Public Policy and its Center on Finance, Law & Policy, with support from the Bill and Melinda Gates Foundation, has embarked on an exploration of the Central Bank of the Future. The project convened current and former central bank governors, policymakers, regulators, researchers, innovators, entrepreneurs, consumer and community organizations, non-profit think tanks, and others for two large, public conferences, three private roundtables, and dozens of small group and one-on-one discussions and interviews. The project also produced an introductory paper, seven working papers, a comprehensive data set …

Climate Change As Systemic Risk, Barnali Choudhury

Articles & Book Chapters

Hindsight tells us that COVID-19, thought by former President Trump and others to have come out of nowhere, is more aptly labelled a “gray rhino” event, one that was highly probable and preventable. Indeed, despite considerable evidence of the impending threats of pandemics, for the most part, governments failed to prepare for the pandemic, resulting in wide-scale social and economic losses.

The lessons from COVID-19, however, should remind us of the perils of ignoring gray rhino risks. Nowhere is this more apparent than with climate change, a highly probable, high impact threat that has largely been ignored to date. Despite …

Covid-19 And Business Interruption Insurance: The Constitutionality Of Legislatively Mandated Coverage, William G. Arnold

South Carolina Law Review

No abstract provided.

The Growth & Regulatory Challenges Of Decentralized Finance, Aaron J. Wright

Articles

Proceedings of the 2021 Spring Conference: The Impact of Blockchain on the Practice of Law Panel 1: The Growth & Regulatory Challenges of Decentralized Finance

Bursting The Auto Loan Bubble In The Wake Of Covid-19, Pamela Foohey

Articles

Before the COVID-19 pandemic, auto loans outstanding in the United States had soared to record highs. The boom in lending spanned new and used cars and traditional and subprime loans. With loan delinquencies also hitting new highs almost every quarter, predictions that the auto lending market could burst soon abounded. When the economy came to a grinding halt and unemployment skyrocketed in the wake of the pandemic, auto lenders knew they were facing a crisis. Throughout 2020, auto lenders granted more payment forbearances to consumers, while slashing interest rates on new loans. Auto manufacturers similarly made promises to buyers, such …

Testimony Before The U.S. House Of Representatives Committee On Financial Services On “Addressing Climate As A Systemic Risk: The Need To Build Resilience Within Our Banking And Financial System” In June 2021, Hilary J. Allen

Legislative Testimony & Comments

No abstract provided.

Cryptoassets And Their Regulation Under Uk And Eu Law In The Post-Brexit Uk, Sarah Jane Hughes, Sara Kobal

Articles by Maurer Faculty

Cryptoassets are used increasingly as stores of value, means of making payments in domestic and cross-border transactions(including person-to-person (“P2P”) payments), and as enterprise solutions for speedier execution of trades in financial instruments or other commerce. Their emergence from the work of Satoshi Nakamoto to real-world applications has prompted attention from legislatures, regulators including law enforcement agencies, service providers and adopters.

The UK, as well as other nations, has used its legislative and regulatory authority to attract crypto-businesses and other financial-services innovators to its shores. Because some nations seek to entice financial innovations and others remain sceptical, tensions will arise between …

Dozens Of Groups Brought To Market Via Spacs To Enter Key Russell Index, Usha Rodrigues

Popular Media

Dozens of companies that entered US markets through deals with blank-cheque vehicles in the past year are set to graduate into the Russell 3000 index on Friday evening, giving a potential boost to the fortunes of electric vehicle developers and other speculative ventures.

FTSE Russell, which maintains the popular benchmark, is conducting the annual refresh of its indices this month, adding and removing companies based on their market capitalisations and other factors.

Session 3: Access To Financial Services - The Promise (And Challenges) Of Fintech, Joseph M. Vincent, Chris Adams, Lucinda Fazio, Roberta Hollinshead, Sumit Mallick, Sands Mckinley, Jonice Gray Tucker, Tonita Webb

SITIE Symposiums

For many Americans, the American Dream is a dream deferred. Recently, there has been an explosion in demand for diversity, equity, and inclusion in financial services. This has coincided with an explosion of a different kind related to delivering financial services through innovations in technology, otherwise known as FinTech. We have seen a plethora of FinTech applications on our smartphones, ranging from online lending to remote deposit making. While these applications provide potential opportunities to level the playing field for those whose dream has been deferred, there remain challenges.

Fraud Against Financial Institutions: Judging Materiality Post-Escobar, Matthew A. Edwards

William & Mary Business Law Review

In Neder v. United States, 527 U.S. 1 (1999), the Supreme Court held that proof of materiality is required for convictions under the federal mail, wire and bank fraud statutes. During the past 20 years, the federal courts have endeavored to apply the complex common law concept of materiality to the federal criminal law context. The Supreme Court’s recent decision in Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), a civil case involving the False Claims Act, provided the federal appellate courts with an ideal opportunity to reconsider materiality standards in federal fraud …

Opening Session, Annette Clark, Steven Bender

SITIE Symposiums

This year's conference focuses on the social good, highlighting three access barriers fundamental in law and society - access to legal services (and more generally, justice), access to health and health care during the COVID-19 pandemic, and access to financial services for the unbanked or underbanked.

A-Void-Able Consequences: Void Sales & Subsequent Purchasers Under Arkansas’S Statutory Foreclosure Act, Hannah Hungate

Arkansas Law Notes

This Comment explores Arkansas’s Statutory Foreclosure Act and addresses the question of whether there can be a “subsequent purchaser for value” when a foreclosure sale is void from the outset. After a review of the Act itself, distinction between void and voidable foreclosures of property, findings of other state courts, and proper application of the Act, the author urges the Arkansas Supreme Court to make a formal declaration finding that purchasers of property foreclosed upon in a void sale are not “subsequent purchasers for value” under the meaning of the statute.

Fair Lending For Cannabis Banking Justice, Benjamin T. Seymour

University of Michigan Journal of Law Reform Caveat

This Comment offers a fair lending solution to promote racial equity in cannabis banking reform: amend the Equal Credit Opportunity Act to ensure individuals previously arrested, charged, or convicted for selling, cultivating, or possessing marijuana will not therefore be precluded from loans to start legal cannabis businesses. Given disparities in the criminal enforcement of marijuana laws, this amendment would provide racial justice benefits, while also encouraging entrepreneurship. As a market-based social justice effort, this amendment offers a bipartisan approach to one of the most vexing and contentious issues in marijuana banking reform.

Part II of this Comment briefly surveys the …

Predatory Fintech And The Politics Of Banking, Christopher K. Odinet

Faculty Scholarship

With American families living on the financial edge and seeking out high-cost loans even before COVID-19, the term financial technology or “fintech” has been used like an incantation aimed at remedying everything that’s wrong with America’s financial system. Scholars and supporters from both the public and private sector proclaim that innovations in financial technology will “bank the unbanked” and open new channels to affordable credit. This exuberance for all things tech in finance has led to a quiet yet aggressive deregulatory agenda, including, as of late, a federal assault via rulemaking on the ability of states to police the cost …

A Rejection Of Absolutist Duties As A Barrier To Creditor Protection: Facilitating Directorial Decisivness Surrounding Insolvency Through The Business Judgment Rule, Philip Gavin

Brooklyn Journal of Corporate, Financial & Commercial Law

This Article draws attention to the difficulties that directors may face when seeking to discharge their duties as a corporation approaches insolvency, in particular when directors must discern the point at which a corporation has become insolvent. It argues that discretion allowed to directors by the business judgment rule will be crucial to overcoming these difficulties. To do this, this article examines the nature of duties owed by directors both before and after insolvency, and accepts the stance taken by Delaware courts in recent years towards an expansive understanding of a corporation’s interests upon insolvency. It then considers unresolved issues …