Posts Tagged ‘Dodd-Frank’

Study: Dodd-Frank conflict minerals rule worsened Congo bloodshed

We’ve covered this story repeatedly, but now there’s further confirmation:

The 2010 Dodd-Frank Act increased violence in the Congo by 143 percent (and looting by 291 percent) through its “conflict minerals” rule, which has backfired on its intended beneficiaries. So concludes a new study by Dominic Parker of the University of Wisconsin and Bryan Vadheim of the London School of Economics.

As we noted earlier, Dodd-Frank conflict minerals regulations have also caused starvation in the Congo, harmed U.S. businesses, and resulted in increased smuggling—even as they punish peaceful neighboring countries in Africa just for being near the Congo, whose civil wars have killed millions over the last 20 years. They have inflicted great harm on a country that was just beginning to recover from years of mass killing and had the world’s lowest per capita income. The new study is consistent with a 2013 paper by St. Thomas University law professor Marcia Narine that criticized the conflict minerals rule for its dire consequences for the Congolese people.

That’s from Hans Bader’s write-up at CEI; more, Stephanie Slade, Reason. The Parker-Vadheim paper is here.

Filed under: Africa, Dodd-Frank, free trade, Securities and Exchange Commission

Banking and finance roundup

“But the questions of fairness are real and seem to be bolstered by the S.E.C.’s win/loss record in its home court versus its performance in district courts.” [Gretchen Morgenson, New York Times, earlier here, etc.]
With Greece as with subprime crisis, same regulators who messed up credit markets will probably ask for and get more power [Arnold Kling]
“In fact an AIG-and-taxpayer bailout of Wall Street firms engineered by government officials and Wall Street professionals with deep and ignored conflicts of interest” [Lawrence Cunningham, National Interest via Bainbridge]
CSR by way of SEC? “Disclosure Rules Are the Wrong Way to Push Social Change” [Thaya Knight, American Banker/Cato]
“Supreme Court Blasts Maryland Taxman’s Double-Dipping” [Elizabeth BeShears, Heartland on this year’s Supreme Court decision in Comptroller v. Wynne, I’m quoted]
Dodd-Frank: “Are State Regulators A Source of Systemic Risk?” [Mark Calabria, Cato]
Feds’ latest round of mega-settlements against banks prompts usual demands to jail execs. Is it really that simple? [Scott Greenfield]

Filed under: banks, Crisis of 2008, Dodd-Frank, Securities and Exchange Commission, taxes, Wall Street

Yet more on Dodd-Frank conflict minerals rules

Hans Bader on the continuing fiasco of a feel-good, morally self-congratulatory law that harms many of its intended beneficiaries, enriches various not particularly deserving parties, and drives up the cost of many things we buy [CEI, earlier]

Filed under: Africa, Dodd-Frank, free trade, Securities and Exchange Commission

Banking and finance roundup

“FATCA: An American Tax Nightmare” [Stu Haugen, New York Times via TaxProf]
Following Iceland’s model? “Neither [Krugman nor Yglesias] mentions that a major part of the Icelandic recipe was letting *foreign* deposit holders twist in the wind.” [Tyler Cowen]
Wasting a Crisis: Why Securities Regulation Fails, new book by Virginia law dean Paul Mahoney [Thaya Knight, Cato, with video of Cato event]
Seventh Circuit reverses $2.46 billion judgment against HSBC Holdings in Household International case [Reuters/Business Insider]
“I’ve been with them 40 years and then they have this? It’s a pain.” Banks close longtime local accounts as anti-money-laundering rules squeeze economy in border town Nogales, Ariz. [W$J]
Six regulatory agencies issue diversity guidelines for financial institutions, implementing Dodd-Frank mandate [FDIC]
Judge to Labaton Sucharow, Bernstein Litowitz: you might at least want to talk to those “confidential informants” your case relies on [Daniel Fisher, Forbes]

Filed under: Arizona, banks, Dodd-Frank, FATCA, Securities and Exchange Commission, securities litigation

Banking and finance roundup

Home-court advantage: SEC wins against defendants 90 percent of the time when it litigates before its own judges [Jean Eaglesham/W$J, Thaya Knight/Cato, earlier]
Oops! “Corporate Inversions Increase U.S. Tax Revenues” [Rita Nevada Gunn and Thomas Lys/SSRN via Paul Caron/TaxProf, related, earlier]
“How U.S. rules on conflict minerals are making life worse for desperately poor people in war-torn Congo” [Politico, earlier]
“Lock up the banksters.” “Lock up the drug dealers.” Dara Lind spots some populist parallels [Vox]
Should bank boards owe fiduciary duty to regulatory as well as investor interests? [Marc Hodak]
“Nobody’s Worried About ‘Too Big to Jail’ Any More” [Matt Levine/Bloomberg View] “Hunting Whales: The Problem With Prosecuting SIFIS” [Thaya Knight/Cato]
Luigi Zingales: market economists need to address question of when and how finance sector goes wrong, or others will do it for them [“Does Finance Benefit Society?“, presidential address to American Finance Association, Buttonwood/Economist, Arnold Kling]

Filed under: banks, crime and punishment, Dodd-Frank, Securities and Exchange Commission, taxes, Wall Street

Banking and finance roundup

Cato Book Forum tomorrow (Wednesday, May 13): Paul Mahoney, “Wasting a Crisis: Why Securities Regulation Fails” [register or watch online]
“When The SEC Pays Your Lawyer For Informing On You, Is That A Good Thing?” [Daniel Fisher]
“Unfortunately for the CFPB’s ideological imperative, Ballard Spahr concludes otherwise: ‘In fact, the study confirms that arbitration does benefit consumers.'” [Kevin Funnell]
Which “established members of the business establishment” brought the AIG prosecution to Eliot Spitzer’s desk, and from what motives? [Ira Stoll]
Dodd-Frank “say on pay” failed to slow rise in CEO compensation, and it would help to understand why [Marc Hodak vs. James Surowiecki]
“One-Third of Americans Living Abroad Have Thought Actively About Renouncing Citizenship Due to Tax-Filing Requirements” [Matt Welch, followup, earlier on FATCA] Rand Paul bill would repeal the law, and there’s also a constitutional challenge in the works [TaxProf]
“What’s the point of the implied covenant of good faith? Other than generating fees for lawyers?” [Prof. Bainbridge]

Filed under: arbitration, CFPB, Dodd-Frank, Eliot Spitzer, FATCA, Securities and Exchange Commission, securities litigation

Banking and finance roundup

Critics say by naming payment processors in massive enforcement action over debt collection practices, CFPB is implementing its own version of Operation Choke Point [Kent Hoover/Business Journals; Barbara Mishkin, Ballard Spahr; Iain Murray, CEI]
Green sprout in Amish country: “Bank of Bird-in-Hand is the only new bank to open in the U.S. since 2010, when the Dodd-Frank law was passed” [WSJ via Tyler Cowen; Kevin Funnell on smothering of new (de novo) bank formation; Ira Stoll (auto-plays ad) on growth of non-bank lenders]
“Quicken Loans Sues DOJ; Claims ‘Political Agenda’ Driving Pressure to Settle” [W$J; J.C. Reindl, Detroit Free Press]
Shocker: after years of Sen. Warren’s tongue-lashings, some banks consider not giving to Democrats. Is that even legal? [Reuters] “Elizabeth Warren’s Extraordinarily Bad Idea For A Financial Transactions Tax” [Tim Worstall]
Still raging on: Delaware debate about fee-shifting corporate bylaws as deterrent to low-value shareholder litigation [Prof. Bainbridge first, second, third posts]
“How a Business Owner Becomes Criminally Liable for How Customers Spend ATM Withdrawals” [Elizabeth Nolan Brown, Reason]
New York financial regulator pushes to install government monitors at firms where no misconduct has been legally established [Robert Anello, Forbes]

Filed under: banks, CFPB, corporate governance, Delaware, Department of Justice, Dodd-Frank, Elizabeth Warren, loser pays, New York, Operation Choke Point, settlement monitors, Wall Street

Banking and finance roundup

Administration has abused the law in mortgage lender settlements [House Judiciary hearing: Paul Larkin, Ted Frank testimony]
Department of Justice official says banks may need to go much farther in informing authorities of customers who may be up to no good than just sending Suspicious Activity Reports (SARs) [Kevin Funnell] Interpol Red Notices, which among other effects cut off banking access, are open to geopolitical manipulation [Ted Bromund, Weekly Standard]
No, Operation Choke Point hasn’t gone away, not in the slightest [Funnell, Jared Meyer/Economics21]
What Elizabeth Warren has done to Michael Greve’s mortgage refinance application isn’t pretty [Liberty and Law]
Battle over loser-pays clauses in corporate governance rages on in Delaware [Reuters]
“The U.S. government’s stupid tax war on expatriates” [Brett Arends, earlier on FATCA]
Dodd-Frank: “Wall St. attacked, Main St. wounded” [Iain Murray]

Filed under: banks, Delaware, Dodd-Frank, Elizabeth Warren, FATCA, mortgages, Operation Choke Point

“How Are Small Banks Faring under Dodd-Frank?”

New Cato Research Briefs in Economic Policy No. 20 takes up a question often raised in this space before [Hester Peirce, Ian Robinson, and Thomas Stratmann, Cato]

Filed under: banks, Dodd-Frank, small business

Banking and finance roundup

Calvin’s refuge: how Swiss banking confidentiality undermined state despotism [Matt Welch, who also discusses how the gruesome FATCA law is proving to be the first component of an multilateral effort by OECD governments to curtail account privacy]
Dodd-Frank compliance costs and the rapid decline of community banks [Marshall Lux and Robert Greene/Kennedy School, Carrie Sheffield, Jeff Sovern with a scoffing view; WSJ]
“The IRS seized $242 million based on suspected structuring in more than 2,500 cases from 2005 to 2012.” [Jacob Sullum, new Institute for Justice report (PDF) by Dick Carpenter II and Larry Salzman and summary] More: new structuring case against Dubuque, Iowa widow raises question of whether feds have really followed through on promise not to press structuring charges where income is otherwise legal [AP/WHEC]
“House Investigators: DOJ Forced Banks to Donate to Left-Wing Groups” [Joel Gehrke, NRO]
“FDIC retreats on Operation Choke Point?” [Todd Zywicki] Rep. Luetkemeyer likely to keep up the pressure on regulators [Kevin Funnell]
“Fed Officials Accused of Perjury in AIG Bailout Trial” [Lawrence Cunningham, Concurring Opinions]
“Standard & Poor’s Settlement Shows Futility Of Fighting Government Policy” [Daniel Fisher, earlier]

Filed under: banks, Dodd-Frank, FATCA, Operation Choke Point, Switzerland