Committee on Oversight and Government Reform

In 2007, Congress enacted a law, commonly referred to as the Military Lending Act (MLA), which placed a 36% interest rate cap on several consumer loans, including payday loans, and prohibits lenders from engaging in several practices considered predatory. However, the MLA grants these protections only to active-duty military members and their dependent family members. In the wake of the mortgage foreclosure crisis. Congress passed and President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), which creates a new federal agency, the Bureau of Consumer Financial Protection (CFPB), to focus on protecting consumers in the credit market place. In this Article, I assert that the newly-created CFPB should use its authority to afford to ordinary Americans protections similar to those now enjoyed exclusively by military families. To support my assertion, I describe how payday loans entrap civilian Americans in a cycle of indebtedness just like they once ensnared military families and yet both groups are equally lacking in financial sophistication.

2013

Pepperdine Law Review, 2012

arrived for work in typical fashion. Unbeknownst to them, by the end of the day, they would work not for the bank, but instead for the Federal Deposit Insurance Corporation ("FDIC").' At three o'clock that afternoon, federal agents, including members of the federal Secret Service and the Federal Bureau of Investigation, along with local police officers, some brandishing weapons, seized the financial institution by force. 2 On the following Monday morning, 3 a banner outside the building covering the old American Commerce National Bank sign 4 read, "Southern California Bank." 5 On the surface it appears that the story of American Commerce Na-1. On April 30, 1993, the Office of the Comptroller of the Currency ("OCC") appointed the FDIC as sole receiver for

White Collar Crime and Risk, 2017

The article illustrates how the instigation of the 'War on Terrorism' and the 'Financial War on Terrorism' had a catastrophic impact on the ability of the Federal Bureau of Investigation to tackle mortgage fraud that was associated with the 2007/2008 financial crisis. Initially, the article identifies and demonstrates how President George Bush decided to prioritise tackling terrorism and the financing of terrorism following the al Qaeda terrorist attacks on September 11 2001. This was illustrated by the creation of the Department of Homeland Security in 2002, the extension of the remit of the Department of Justice and the redistribution of specialist white collar crime agents from the Federal Bureau of Investigation to enforce terrorist related legislation. The second part of the article illustrates the association between the financial crisis, subprime mortgages and mortgage fraud. The article then moves on to critically review the impact of the alteration in policy towards mortgage fraud that was introduced by President Barak Obama in 2009. Therefore, questioning the effectiveness of the policies adopted by President George Bush.

2011

The purpose of this short collection of papers is to demonstrate why the "orderly liquidation authority" in Title II of the Dodd-Frank bill "Wall Street Reform and Consumer Protection Act of 2010" should be supplemented with a new and more predictable bankruptcy process designed specifically for large financial institutions. We call the new bankruptcy law "Chapter 14," because it is currently an unused chapter number in Title 11 of the U.S. Code on Bankruptcy. Ken Scott leads off with a useful summary of the key legal and economic differences between the new orderly liquidation authority and the proposed new Chapter 14 bankruptcy process. He shows that the orderly liquidation authority, in the absence of a new bankruptcy process, increases uncertainty, raises due process issues, creates additional incentives to bailout large financial institutions, and increases moral hazard. His short later paper in the collection, "Dodd-Frank: Resolution or Expropriation?" elaborates on the reasons why the new liquidation authority would likely violate constitutional due process in practice. Title II of the Dodd-Frank bill gives the government considerable power and discretion to intervene, take over, and liquidate financial companies with no time for meaningful judicial review or analysis. Even with the best of intentions it is difficult to see how the Federal Deposit Insurance Corporation, the agency assigned by the law to this job, can run such a liquidation process for large, complex

SSRN Electronic Journal, 2014

Hearing on "Examining the GAO Report on Expectations of Government Support for Bank Holding Companies" July 31, 2014 Chairman Brown, Ranking Member Toomey, and members of this Subcommittee, I commend you for holding this hearing and am grateful for the opportunity to speak to you. I am a Professor of Finance and Economics at Stanford Graduate School of Business and my recent research and writings have focused on issues immediately relevant to today's hearing. Recent experiences have helped foster the expectations of government support mentioned in the title of this hearing. Since 2008, the Treasury, the Federal Reserve and the FDIC provided through various programs massive and unprecedented support to the financial system. The largest bank holding companies, to varying degrees, have had access to hundreds of billions, even trillions of dollars in relatively cheap loans and guarantees, and they benefitted from bailouts of their counterparties such as AIG. For some, e.g., Citigroup, the support was critical. 1 1 The banks and the Federal Reserve tried to keep information about the extent of Fed loans hidden. The information was released after Bloomberg fought in court. See Phil Kuntz and Bob Ivry, "Fed Once-Secret Loan Crisis Data Compiled by Bloomberg Released to Public," Bloomberg, December 22, 2011. Citigroup is discussed further below.

2009

The Obama Administration has proposed that the government be given special authority to resolve a nonbank financial institution if its failure could have serious systemic effects. This new Orderly Resolution Regime (ORR) is needed because the existing regime confronts US economic and regulatory authorities with two very unappealing options: allow the institutions to go into corporate bankruptcy, thereby accepting the associated systemic risk, or to weigh in (often over a weekend) with a large government rescue.

Nw. UL Rev. Colloquy, 2010

International Journal of Banking, Accounting and Finance, 2013

Payday loans are very expensive forms of credit, and states that permit payday lending typically impose ceilings on loan prices. We test whether and how such constraints influence the pricing behaviour of payday lenders, using data on 35,098 payday loans originated in Colorado between 2000 and 2006. We find that loan prices moved upward toward the legislated price ceiling over time, a pattern that is consistent with implicit collusion facilitated by a pricing focal point. This phenomenon is accompanied by a reduction in competitive rivalry: as average prices approach the ceiling over time, statistical evidence consistent with classical price competition fades, and is replaced by evidence consistent with a variety of strategic pricing.