Financial Institutions

The CFPB and Behavioral Economics

11/28/16
This post is an extended aside from my previous post about David Evans' argument about the CFPB's mindset and institutional incentives.  The point isn't critical to Evans' argument, but I'm writing because it really irks me because it shows such a lack of understanding about the CFPB.
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The CFPB and Consumer Welfare

11/28/16
David Evans has an interesting article on PYMNTS that argues that "The fundamental problem with the CFPB ... isn’t who’s on top.
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Do Financial Institutions Care About Bigotry?

11/16/16

Do financial institutions care about bigotry?  I don't ask that facetiously.  I want to be clear that I am not raising the question of whether financial institutions themselves want to discriminate based on race, gender, national origin, religion, sexual orientation, etc. (or "have a taste for discrimination" in Gary Becker's terminology).  Instead, what I am asking is whether they care about bigotry and discrimination in society writ large?  That is, do financial institutions believe they have some sort of social responsibility?

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Preliminary Thoughts

11/14/16

On the new reality. Over at Dealb%k.

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How to think about banks

11/12/16

Banking is not an industry; banking is not the real economy. The big banks especially are economic and political behemoths that remain unpopular and poorly understood in the popular imagination.

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Tinder for CDS?

11/04/16

Dealers occupy an important position in financial markets, essentially serving as central nodes that match buyers and sellers of all types of instruments.  Sometimes the dealer itself will serve as the ultimate buyer or seller, but frequently they are running (or attempting to run) matched books of buyers and sellers.  In short, dealers are really just matchmakers.  So here's the thing:  we've seen how human matchmaking can be entirely replaced by (1) algorithms and (2) apps.  For algorithms, that's just stuff like Match.com or eHarmony.  And for apps, well, there's Tinder, etc.

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Is It Time for the CFPB to Regulate Retail Bank Employee Compensation?

09/21/16

It doesn't take a genius to figure out that incentive-based compensation like the type featured in Wells Fargo's current and previous consent orders has the potential to encourage fraud and steering of consumers into inappropriate products in order to make sales numbers.  Here's the thing:  there's little regulation of retail banking employee compensation.

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What is the point of that?

09/21/16

Perhaps as a result of GM, I've been thinking about notice issues in connection with insolvency.

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The Bad CHOICE Act

07/11/16

I'm testifying before House Financial Services tomorrow regarding the "CHOICE Act," the Republican Dodd-Frank alternative.  My testimony is here.

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Payday Rulemaking: Is Too Much Competition a Bad Thing?

06/02/16

The CFPB's proposed payday rule making is out.  There's a nice summary here.  

I'm going to reserve comment other than to note a critical implication of a rare area of agreement between the supporters and opponents of the payday rule:  it will result in a lot of payday lenders closing up shop.  That might be just what the industry needs.

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