Posts Tagged ‘Dodd-Frank’

Banking and finance roundup

  • Marcia Narine on D.C. Circuit’s recent ruling striking down part of Dodd-Frank conflict mineral disclosure rule [Business Law Prof]
  • More on suit challenging constitutionality of FATCA, the law complicating many expatriates’ lives [Paul Mirengoff, PowerLine]
  • “Jury Will Put A Price On Terrorism — And Stick A Bank With The Bill” [Daniel Fisher, Reuters on Arab Bank settlement]
  • Operation Choke Point: “How a program meant to stamp out fraud has put a stranglehold on legitimate industries” [Reason TV video, AmmoLand on markup of Rep. Blaine Luetkemeyer’s anti-Choke-Point Financial Institution Customer Protection Act]
  • Federal Reserve’s denial of core banking services to Colorado cannabis businesses: consistent with its authorizing statutes? [George Selgin/Cato, related from me on RICO suit against bankers, bonders, and others interacting with the industry]
  • “A financial system based not on … charging interest for lending … but on traditional social values”: Russia’s Orthodox Church backs interest-avoiding finance system akin to Islamic sharia finance [Bloomberg, Moscow Times]
  • Two popular views in tension with each other: “Wall Street = short term thinking” and “Wall Street spins meager current earnings into bubbles” [Kevin Erdmann via Tyler Cowen]

Thousands fewer community banks under Dodd-Frank

At last night’s Republican debate in New Hampshire, Carly Fiorina criticized how the Dodd-Frank law is strangling community banks, as well as its encouragement of yet bigger Wall Street firms and Congress’s failure to reform mortgage entities Fannie Mae and Freddie Mac. More on community banks here, from Scott Beyer, and in several past posts. [And: Hans Bader, CEI.]

P.S. We’ve previously noted this WSJ account from March on one of the most dramatic aspects of the trend, the throttling of de novo bank formation:

Based in a rural village in the heart of 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 and enacted. An average of more than 100 new banks a year opened in the three decades before Dodd-Frank.

Banking and finance roundup

  • “Fee-shifting: Delaware’s self-inflicted wound” [Stephen Bainbridge, more] Needed: a new Delaware [Reuters] Fordham lawprof Sean Griffith fights trial bar on shareholder suits [Bainbridge, more]
  • Goodbye, insurance (hugs). I think I’ll miss you most of all. [Bridget Johnson on anti-cinema, anti-stock-trading views of radical Islamist British activist and former lawyer Anjem Choudary]
  • Rare coalition of bankers, housing advocates urges limits on mortgage-related suits [W$J]
  • “The Administrative State v. The Constitution: Dodd-Frank at Five Years” hearing includes testimony from Mark Calabria of Cato (law delegates vast authority to bureaucracy, has failed to generate clear rules for regulated parties) and Neomi Rao of George Mason (unconstitutionality of Consumer Financial Protection Bureau) [Senate Judiciary Committee, related on a CFPB constitutional challenge]
  • Do-it-yourself Operation Choke Point: letter from one Illinois sheriff shut down adult-ad credit card payments [Maggie McNeill, Daniel Fisher]
  • “Obama DOJ Channels Bank Shakedown Money To Private Groups” [Dan Epstein, Investors Business Daily]
  • “The U.S. listing gap” [Doidge, Karolyi, & Stulz NBER paper via Tyler Cowen, MR]

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.

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]

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]

Banking and finance roundup

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]

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]