Overlawyered: Chronicling The High Cost Of Our Legal System

The folly of interest rate caps, cont’d

“A new proposal would likely sharply curtail the issuance of credit cards and the extension of unsubsidized credit to lower-income people.” Diego Zuluaga comments for the Cato Daily Podcast with Caleb Brown.

More: David Henderson, Peter Suderman, Todd Zywicki and Federalist Society podcast with Zywicki and Wayne Abernathy, and Alex Tabarrok and Tyler Cowen with pointers to papers. As we noted in February, a recent study of Arkansas’s constitutional 17% cap found it hurt borrowers of modest means, who now drive to other states to take out small loans.

A second podcast with Cato’s Todd Zywicki, this one noting that earlier rounds of regulation precipitated the withdrawal of banking services from many less well-off communities to which postal banking is now being touted as a solution:

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Discrimination law roundup

  • Can a law ban calls to police by the public that are based on stereotyping or bias? Grand Rapids may find out [Scott Greenfield]
  • Courts and EEOC have held that the federal ban on pregnancy discrimination encompasses a ban on discrimination related to abortion [Jon Hyman] Legislative proposal in Ohio, fortunately given little chance of passage, would make anti-vaxxers a protected group under state employment discrimination law [same]
  • “Finally Some Robust Research Into Whether ‘Diversity Training’ Actually Works – Unfortunately It’s Not Very Promising” [Jesse Singal, British Psychological Society Research Digest, earlier]
  • New EEOC employer reporting requirements represent “an order of magnitude increase in the amount of information the government wants” for one recreation management business [Coyote] How are federal agencies doing on civil rights issues in this administration? Federalist Society panel with Gail Heriot, Kenneth Marcus, Theodore Shaw, Timothy Taylor, moderated by Erik Jaffe;
  • When an outcry arose over its partnership decisions, “Paul, Weiss did what every other mainstream institution does today when accused of racial bias: it fell on its sword.” [Heather Mac Donald, City Journal via Eugene Volokh]
  • “Targeted Advertising and Age Discrimination: An Explainer” [Joe Ruckert, On Labor]

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Her Majesty’s “Unexplained Wealth Orders” go too far

I’ve got a piece in Thursday’s Washington Examiner on a remarkable new law enforcement tool in Britain:

It’s like, “Your papers, please,” but for things you own.

Authorities in Britain have begun trying out a new police power called unexplained wealth orders under a law that took effect last year. The police go to a court and say you’re living way above any known legitimate income. The judge then signs an order compelling you to show that your possessions (whether a house, fancy car, or jewelry) have been obtained honestly and not with dirty money. In the meantime, the boat or artwork or other assets get frozen, and you can’t sell them until you’ve shown you obtained them innocently.

The kicker: The burden of proof falls on you, not the government. If you don’t prove the funds were clean, Her Majesty may be presumed entitled to keep the goodies….

Related to the flipping of the burden of proof, the law says information dug up via one of the orders can’t then be used in criminal charges against the target.

…advocates want this to be the start of hundreds of seizure actions against other rich foreigners in the British capital.

Some are already calling for bringing a law like this to the United States, and maybe we’re halfway there already. Asset forfeiture laws, blessed by the Supreme Court, already let police seize your property on suspicion of involvement in a crime and make you go to court to get it back. We’ve been chipping away at financial privacy in this country for decades, through Know Your Customer, suspicious-activity reports, and FATCA (expatriate tax) rules.

Ironically — though recent enactments by Parliament may be changing this, too — Britain’s own peripheral territories and dependencies, including the Channel Islands, British Virgin Islands, Cayman Islands, etc. have long made a good business out of furnishing the rest of the world with the means of financial privacy.

The reversal of the presumption of innocence troubles many Britons, too. For the moment, use of the orders is limited to a few elite law enforcement agencies. One of those agencies, however, is Her Majesty’s Revenue and Customs — the tax collectors. It’s not wrong to worry about where this idea is headed.

Whole thing here. (cross-posted from Cato at Liberty).

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Banking and finance roundup

  • Advice to Mark Calabria, newly installed as head of the Federal Housing Finance Administration, or FHFA [Arnold Kling; more on what to do with Fannie and Freddie]
  • Bad blood between Joe Biden and Elizabeth Warren on consumer bankruptcy issue goes back decades [Matthew Yglesias, Vox]
  • “Financial planning websites consistently emphasize paying off revolving high-interest debt before saving for retirement (unless a company offers a match rate).” But state-mandated auto-IRAs nudge workers the other way [Aaron Yelowitz, Cato, earlier]
  • Competition for incorporation: “Nevada adopts fee-shifting: Should Delaware worry?” [Stephen Bainbridge]
  • “The True Winners and Losers of Financial Regulation” [Diego Zuluaga] Fed vs. narrow banks [John Cochrane, more]
  • FATCA was the bad fairy’s curse at the royal baby shower: “Welcome to Tax Hell, Little Earl of Sussex” [Suzanne Lucas, earlier]

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Feds charge doc, medical consultant in mesh litigation scheme

“Federal prosecutors in Brooklyn have charged a physician and the owner of a medical consulting firm over a scheme to persuade women to have their pelvic mesh implants surgically removed to bolster the value of lawsuits against the devices’ manufacturers.” The prosecutors charge that the two lied to women about the health risks of mesh and of its surgical removal, and participated in a system of improper bribes and kickbacks. “The procedures were paid with money from high-interest cash advances arranged by a group of so-called litigation finance firms.” [Matthew Goldstein, New York Times, earlier on pelvic mesh here, here, here, etc.] More: Goldstein on suits by clients against lawyers.

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June 12 roundup

  • Moving against emerging litigation analytics and prediction sector, France bans publication of statistical information about individual judges’ decisions on criminal penalty [Artificial Lawyer, ABA Journal, David Post]
  • Eugene Volokh analyzes Washington high court’s unanimous ruling against Arlene’s Flowers and Barronelle Stutzman in same-sex marriage refusal case [Volokh Conspiracy, earlier on case here and here]
  • “Small claims court for copyright” idea would likely worsen the problem of copyright trolling [Mike Masnick, Techdirt]
  • Activists push laws and pledges intended to push charitable foundation giving (yet) further to left [James Piereson and Naomi Schaefer Riley, Washington Examiner]
  • Review of new book by libertarian economist David D. Friedman, “Legal Systems Very Different from Ours”: pirates, prisoners, gypsies, Amish, imperial Chinese, Jewish, Islamic, saga-period Icelandic, Somali, early Irish, Plains Indians, 18th century English, and ancient Athenian [Michael Huemer, Reason]
  • If the Supreme Court is going to let police stop your car on a pretext, they should at least insist that there *be* a pretext [Jonathan Blanks on Sievers v. Nebraska Cato cert petition]

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Gorsuch: “almost anyone can be arrested for something”

Dissenting in the recent case of Nieves v. Bartlett, on the First Amendment handling of arrests motivated in part by retaliation for protected speech, Justice Neil Gorsuch wrote that criminal law in U.S. has expanded to a point where “almost anyone can be arrested for something.” And the implications? [Ilya Somin] Earlier on Nieves and the retaliatory-arrest case that preceded it last year, Lozman v. Riviera Beach, and more on the Nieves outcome from Tim Cushing at TechDirt.

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