Financial Institutions

FDIC and OCC Race to Court to Defend 120.86% Interest Rate Small Business Loan

09/18/19

FDIC and OCC filed an amicus brief in the district court in an obscure small business bankruptcy case to which a bank was not even a party in order to defend the validity of a 120.86% loan that was made by a tiny community bank in Wisconsin (with its own history of consumer protection compliance issues) and then t

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Anderson and Nyarko's Cool New Papers on Contract Evolution

09/05/19

Two of the contracts papers I’ve been most looking forward to this fall have just been posted on ssrn. They are are Rob Anderson’s “An Evolutionary Perspective on Contracting: Evidence From Poison Pills” (here) and Julian Nyarko’s “Stickiness and Incomplete Contracts” (here).

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Private Equity's Abuse of Limited Liability

08/28/19
One of the central features of the Stop Wall Street Looting Act that was introduced by Senator Elizabeth Warren and a number of co-sponsors is a targeted rollback of limited liability.
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Coyle on Studying the History of a Contract Provision

08/03/19

The way many of us teach interpretation in Contract Law, there is little role for history (admittedly, this is just based on casual observation).

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The Second Circuit Got It Right in Madden v. Midland Funding

04/18/19

Professor Peter Conti-Brown of the Wharton School has written a short article for Brookings decrying the Second Circuit’s 2015 Madden v. Midland Funding decision. Professor Conti-Brown doesn’t like the Madden decision for two reasons. First, he thinks its wrong on the law.

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Reflections on the foreclosure crisis 10th anniversary

12/03/18

Before it was the global financial crisis, we called it the subprime crisis. The slow, painful recovery, and the ever-widening income and wealth inequality, are the results of policy choices made before and after the crisis. Before 2007, legislators and regulators cheered on risky subprime mortgage lending as the "democratization of credit." High-rate, high-fee mortgages transferred income massively from working- and middle-class buyers and owners of homes to securities investors.

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Three big states account for nearly a third of complaints to CFPB

10/23/18

A detailed breakdown released by the agency shows residents in California, Florida and Texas having submitted the most complaints about a financial institution, but D.C. had the most per-capita complaints.

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CLO Yawn

10/19/18

There's a big story in the NY Times about how the financial structures being used to finance many corporate loans—so-called Collateralized Loan Obligations or CLOs—look very similar to those used to finance mortgages during the housing bubble.  Yup.  That's true.

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ISDA Promotes a Race to the Bottom

09/24/18

Frustrated that Congress did not decide to collapse the CFTC and SEC as part of Dodd-Frank, and facing the reality that the SEC is still working on its rules under Title VII of Dodd-Frank, ISDA, the swaps industry trade group, is out with a white paper that urges the adoption of a "safe harbor."

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Excuse Me?

09/17/18

Barry Ritholtz has a generally sensible column about the ten-year anniversary of the financial crisis, but the bankruptcy stuff really makes no sense at all. Start with this proposition:

I believed then (and still believe) that the best course of action would have been prepackaged bankruptcies for all the insolvent institutions instead of bailouts.

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