- In banking and FCPA cases, targets of DOJ prosecution are disproportionately firms domiciled abroad, and other countries do notice that [Jesse Eisinger, NYT “DealBook”]
- “Los Angeles’ Confused Suit against Mortgage Lenders” [Mark Calabria, Cato] Providence also using disparate impact suits in hopes of making banks pay for its housing failures [Funnell]
- Podcast discussion on Operation Chokepoint with Charles J. Cooper, Iain Murray, and Todd J. Zywicki [Federalist Society, earlier]
- New round of suits against banks based on ATMs’ imperfect wheelchair accessibility [ABA Journal, earlier here]
- Walgreen’s could save billions in taxes if it moved to Switzerland from U.S. Whose fault if anyone’s is that? [Tax Foundation]
- “Left unmentioned: how fed regulation and trial lawyers deter banks from protecting themselves with overdraft fees.” [@tedfrank on NYT report about banks’ use of databases to turn down business from persons with records of overdrawing accounts, a practice that now itself is being targeted for regulation]
- Scheme to seize mortgages through eminent domain stalling as cities decline to come on board [Kevin Funnell]
Filed under: banks, disabled rights, disparate impact, extraterritoriality, Foreign Corrupt Practices Act, Los Angeles, mortgages, Rhode Island
6 Comments
Uber and Lyft and AirBnb use clever tailoring to “get around” regulation on the business activity in question, and this is seen as a good thing we should support, and government regulatory-body interference is a nasty awful thing we should all be mad about.
A city uses clever tailoring to support homeowners who got suckered into bad deals, and this is seen as a nasty awful thing we should all be mad about, and government regulatory-body interference is a good thing we should support.
I guess that in the one case, bankers are making money; and in the other case it’s being taken away from them.
Or I guess principled opposition to abuse of eminent domain (if you’re referring to the last item) or to abusive litigation built on “disparate impact” theories (if you’re referring to Providence/L.A.) extends even to cases where it’s being done for the claimed benefit of mortgage borrowers.
If it was the eminent domain ploy you were referring to, incidentally, it’s being packaged by a clever Wall Street operator and pitched to cities, so sharpsters with a financial interest are on both sides of the controversy.
I’m sure that someone has figured out a way to make money for themselves as part of the eminent domain plan, because nothing happens in this world without someone making a buck off of it (well, unless government came up with the idea on its own.)
My point is that it’s hypocritical to say “Uber shouldn’t be subject to taxi regulations because technically it’s not a taxi service and so the government should butt out”, and then turn around and say “principal reduction through the mechanism of eminent domain is abuse and shouldn’t be tolerated”. Either you accept creative conformance to the law, or you don’t.
You write as if the use of eminent domain power to further the interests of private actors had not been tagged as abusive until this case. On the contrary, a search on “Kelo” yields a huge literature in which libertarians (and liberals and conservatives too, for that matter) object to eminent domain seizure for private uses as improper:
http://www.cato.org/search/results/kelo
Note that in the Kelo case, as in the more recent underwater mortgage schemes, some argued that seizing for private use really amounted to seizing for public use if looked at in the proper light because the goal, revitalizing a depressed city as a whole, would lift all ships.
You’re probably right that it’s no refutation of a position to note that someone is making a buck off it, but then maybe we can dispense with the snark about how a supposed inconsistency (which isn’t a real one) is somehow explainable by bankers being on one side but not the other.
Yes, I am aware of Kelo. Are you really claiming that because eminent domain was abused once, that therefore all eminent-domain activity is always bad?
The whole point of this is that the banks who hold the loans are saying “well, we say that you owe us so-many dollars, but we also say you can’t renegotiate the terms of the contract because the underlying property is worth less-than-that dollars”, and the municipalities are saying “okay, we’ll take you at your word when you say the properties are worth less-than-that dollars”.
You’re also using an inaccurate, loaded term when you say “abuse”. That implies that this is an involuntary action taken without the actual homeowner’s consent or invitation, for the sole benefit of a private third party, and that is entirely not what is happening here.
If the enormous public backlash to Kelo and Poletown had any point, it was to reinforce the idea that eminent domain is abuse when it goes beyond condemning property for truly *public* use (such as the route of a newly built road, or land needed for national defense) and instead grabs someone’s property because someone covets it for a *private* use primarily devoted to the enrichment of Mr. A or Company Z.
Are we even talking about the same scheme of getting cities to condemn underwater mortgages by eminent domain? Of course that scheme could gain the *homeowner’s* consent or invitation; it’s not the homeowner who’s being compelled to give up a property right, it’s the lender to whom she or he owes money. The whole idea of using eminent domain to seize underwater mortgages is to grab the lender’s property against its will and without its consent for the quintessentially private benefit of the homeowner and other private parties. I’d call that abuse, not “public use”.