- Bank of England deputy governor: banks have incurred an estimated $275 billion in legal costs since 2008 and that’s been a drag on economic growth [Katy Burne and Aruna Viswanatha, WSJ]
- Economist Ken Rogoff proposes doing away with most large-denomination paper money so as to stifle crime, tax evasion and the like, and George Selgin of Cato pushes back;
- “M&A Lawsuits Plunge As Delaware Judges Make Them Harder To Settle” [Daniel Fisher]
- CFPB keeps pushing to expand its authority, but on lending rate caps it runs into a direct statutory limit [Thaya Brook Knight]
- House Financial Services Committee votes to repeal the awful conflict minerals rule [Marcia Narine via Bainbridge and more, earlier] And maybe the rest of Dodd-Frank too? [Mark Calabria]
- How the Swiss–American Chamber of Commerce sees FATCA, the overseas banking law vexing expats and legitimate business overseas [American Swiss Foundation]
Posts Tagged ‘CFPB’
Banking and finance roundup
- Consumer Financial Protection Bureau (CFPB) estimates its new anti-arbitration rule will generate 1,200 more class actions a year [Daniel Fisher, Joshua Davey/McGuire Woods, CEI comments]
- Denial: Treasury officials are at pains to deny that federal money-laundering rules are cutting off access to legitimate customers [Emily Glazer and Aruna Viswanatha, WSJ]
- State management of private pensions, to CALPERS’s benefit? “California Politicians Want Your Nest Egg” [James Freeman, WSJ]
- In designating MetLife “systematically important” to nation’s financial stability, federal regulators glossed over questions they should have had to confront [Thaya Brook Knight and Ilya Shapiro on Cato amicus brief]
- “How the UK prime minister’s corporate boardroom reforms hurt Britain” [J.W. Verret, The Hill via Prof. Bainbridge]
- New CFPB debt collection rules will encourage consumers to avoid paying what they owe [Ronald Rubin, Weekly Standard]
Banking and finance roundup
- Government badly messes up pension arrangements for its own workers. So why are California and other states muscling their way into provision of private pensions? [Steven Greenhut, City Journal]
- Unconstitutional doings at the Consumer Financial Protection Bureau (CFPB) should not be ratified after the fact [Ilya Shapiro and Jayme Weber, Cato]
- Temple-Inland, Inc. v. Cook: federal court rules Delaware practices on unclaimed property unconstitutional [Alston & Bird, my recent]
- “In praise of debt” [David Henderson] “The credit card companies were there for me” [same]
- May be wrong: Prof. Bainbridge on why U.K. Prime Minister Theresa May is off base in proposals to put workers on company boards, tinker with executive pay (related here and here);
- “The Glass-Steagall Rorschach Test” [Mark Calabria, earlier]
Constitutional law roundup
- Ilya Shapiro on round II of Fisher v. University of Texas, the racial preferences case [Pope Center]
- “Supreme Court Endorses Tribal Courts; Bad News For Corporate Defendants?” [Daniel Fisher on Sixth Amendment case U.S. v. Bryant]
- “Is The Consumer Financial Protection Bureau Unconstitutional?” [Susan Dudley]
- “Dueling perspectives on Lochner v. United States” [Andrew Hamm, SCOTUSBlog on Paul Kens vs. Randy Barnett debate, earlier]
- First Amendment and commercial speech: “Crazy Law Allows ‘Discounts’ for Cash but Not ‘Surcharges’ for Credit” [Ilya Shapiro on Expressions Hair Design case]
- Who ‘ya gonna call if you need a Third Amendment lawyer? [humor]
Banking and finance roundup
- Trying to pressure banks to cease tax refund anticipation lending, FDIC staff crossed several lines of impropriety [inspector general executive summary via Kevin Funnell]
- Consumer Financial Protection Bureau, class action lawyers’ best friend, aims to suppress arbitration [WSJ, The Hill, earlier here, here, here]
- When CEOs campaign for their view of social justice, do they disserve shareholders’ interest? To the point of incurring liability? [Kevin LaCroix]
- “Insider Trading: The Unknowable Crime” [Thaya Brook Knight and Ilya Shapiro on Cato amicus brief in Salman v. U.S.]
- “The Number of Publicly Traded Firms Has Halved” [Alex Tabarrok; Naomi LaChance, Inside Sources, on decline of IPOs] Does SEC Chairman Mary Jo White get it? [Hodak Value]
- Tax havens and tax competition serve vital policy function, to “curtail the greed of the political class” [Dan Mitchell] Related: “The War Against Cash, Part III”
“When consumers want to create or join a class-action lawsuit…”
Hello, AP? The relevant “wanting” here is done by lawyers, not consumers. (“When consumers want to create or join a class-action lawsuit…”) And that’s kind of emblematic of how you miss the point on the Consumer Finance Protection Board’s big announcement of a rule yesterday rescuing many class action lawyers from the arbitration clauses to which their putative clients would otherwise have given legal consent.
More: BNA, James Copland, WSJ:
The industry reaction was swift, with Wall Street and its advocates warning of unintended consequences of the rule within hours of the CFPB proposing it on Thursday.
The change likely will result in higher litigation costs for banks, which they will offset either by raising the costs of consumer-loan products or reducing services, said Nessa Feddis, senior vice president for consumer protection and payments at the American Bankers Association, an industry group.
House Financial Services Committee Chairman Jeb Hensarling (R., Texas) called the proposed rule “a big, wet kiss to trial attorneys.”
And: Omri Ben-Shahar, Forbes:
While the overall effect on consumers depends on the balance between meritorious and frivolous class actions, one prediction can be made with confidence. Firms will now take greater care in drafting even longer fine print agreements, where everything is fully “disclosed.” Since many class actions allege violations that can often be corrected through more comprehensive legal disclosures and warnings, firms will lawyer up and write longer and even less readable boilerplate. The “asterisk” will be the winner — the routine disclaimers that accompany advertisements, as in: “Footlong is an average; reasonable variations may apply.” In the end, the CFPB’s proposed regulation will not improve the value of financial services to consumers. It will instead lavish upon people even longer and more excruciating small print.
Politics roundup
- Disparage at thy peril: three Democratic lawmakers demand FTC investigation of private group that purchased $58,000 in ads disparaging CFPB, a government agency [ABC News] So many politicos targeting their opponents’ speech these days [Barton Hinkle]
- A pattern we’ve seen over the years: promoting himself as outspoken social conservative, trial lawyer running for chairman of Republican Party of Texas [Mark Pulliam, SE Texas Record]
- Some of which goes to union political work: “Philly Pays $1.5 Million to ‘Ghost Teachers'” [Evan Grossman, Pennsylvania Watchdog via Jason Bedrick]
- “However objectionable one might find Trump’s rhetoric, the [event-disrupting] protesters are in the wrong.” [Bill Wyman/Columbia Journalism Review, earlier]
- Hillary Clinton’s connections to Wal-Mart go way back, and hooray for that [Ira Stoll and column]
- I went out canvassing GOP voters in Maryland before the primary. Here’s what they told me. [Ricochet]
Banking and finance roundup
- Federal judge refuses to dismiss suit against prosecutor Preet Bharara, FBI agents by hedge funder David Ganek over treatment in now-dismissed Chiasson inside trading case [Peter Henning, New York Times “DealBook”; Business Insider] SEC agrees to return $21.5 million extracted from Ganek’s Level Global Investors [BNA via Ira Stoll]
- CFPB follies: “Government-Directed Lending Comes to America” [Ike Brannon, Cato] Agency casts its eye on marketplace, otherwise known as peer-to-peer, lending [Thaya Brook Knight, Cato]
- SEC inspector general sides with agency against allegations of undue sway over ALJs [Reuters, earlier here, here, etc.]
- Third party liability for crime: “HSBC Sued Over Drug Cartel Murders After Laundering Probe” [Bloomberg]
- Former Ally Bank CEO: administration extorted race-lending settlement by threatening to derail regulatory approvals [Paul Sperry/New York Post, more]
- Bellevue, Wash.: $213,000 award to complainant Leticia Lucero “could mean other cases where homeowners argue lenders [cause] emotional distress during negotiations.” [AP/Yakima Herald]
Banking and finance roundup
- Trying to buy gift cards in bulk as an employee bonus, Coyote discovers anew that the government hates cash;
- Initial public offerings are drooping again, regulation one reason [Thaya Knight, Cato]
- A dissent from the lamentations, here and elsewhere, on the decline of small community banks [Ira Stoll] “Fed’s Tarullo says looking into smaller banks’ concerns” [Business Insider]
- Berned out? Financial transactions tax “one of the more overrated ideas in American Progressive political discourse” [Tyler Cowen, Wikipedia on Sweden’s experience via @aClassicLiberal on Twitter] And Sen. Sanders continues to express incredulity on Twitter about college loans’ carrying higher interest than home mortgages do, despite attempts to enlighten him on the whole topic of secured lending and collateral [@tedfrank]
- Video of Federalist Society convention panel on constitutionality of administrative law judges at SEC and elsewhere with John S. Baker, Jr., Stephen Crimmins, Todd Pettys, Tuan Samahon, moderated by F. Scott Kieff;
- Consumer Financial Protection Bureau ban on contractual arbitration will help class action lawyers, few others [Todd Zywicki, Mercatus]
- “How US policies to stop terrorist financing end up hurting innocent families abroad” [Dylan Matthews, Vox] Money laundering regs, “de-risking” result in many bank closures in U.S.-Mexico border areas, hassles result for local residents and businesses [Kevin Funnell]
Arbitration menaces class action bar. CFPB to the rescue!
Unveiling a plan to ban the use of arbitration clauses that rule out class actions, the federal Consumer Financial Protection Bureau behaves as a Plaintiff’s Lawyer Protection Bureau [Andrew Pincus, Chamber’s Institute for Legal Reform] More: Boston Globe, Alison Frankel, Reuters. Earlier and related here, here, here (California) and generally. And regarding news reports that Chrysler offers a $200 discount to car buyers who accept pre-dispute arbitration, Ted Frank:
Chrysler willing to split savings of avoiding courts with buyers: $200 discount. Lawyers upset that it's disclosed what they cost consumers.
— tedfrank (@tedfrank) October 8, 2015