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OpenMarket: Banking and Finance

  • Don't Let Credit Scoring Kerfuffle Compromise GSE Reform

    May 31, 2019
    Just when it seemed that reforming the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac was becoming a “third rail” that politicians did not want to touch, Trump administration officials—from the president on down—are now making bold statements about curbing the powers of GSEs in the housing market and reducing their risk to taxpayers.
  • Consumer Financial Protection Bureau Should Drop Flawed Enforcement Actions

    May 29, 2019
    While the Consumer Financial Protection Bureau’s role in enforcing consumer protection laws is important, there are times when it oversteps the mark and brings frivolous cases based on weak factual grounds or obscure legal theories. Two well-documented examples are the PHH case and the Ally Financial consent order, both pursued under the Obama administration.
  • Narrowly Address Fair Lending Requirements to Spare Impact on Small Business

    May 28, 2019
    Section 1071 of the Dodd-Frank Act amended the Equal Credit Opportunity Act to require financial institutions to collect, report, and make public certain information concerning credit applications made by women- and minority-owned small businesses.
  • Reform Fair Lending Laws to Uphold Rule of Law

    May 23, 2019
    The CFPB’s new director, Kathleen Kraninger, assured the Senate Banking Committee in her confirmation hearing that she was committed to upholding the rule of law. More than just a buzzword, Director Kraninger has shown her commitment through such actions as asking Congress to clarify the bureau’s authority to supervise for compliance with the Military Lending Act and ending “regulation by enforcement.”
  • Regulators Should Rescind 'Small-Dollar' Loan Rule

    May 22, 2019
    The Consumer Financial Protection Bureau is one of the most controversial regulators in Washington, D.C. Since its founding in 2010 under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Bureau has faced relentless scrutiny for its unconstitutional structure, reckless spending, aggressive enforcement activity, and flawed rulemakings, to name a few.
  • Credit Card Interest Cap Would Create Consumer Credit Bread Lines

    May 17, 2019
    Last Thursday Rep. Alexandria Ocasio-Cortez (D-NY), and Sen. Bernie Sanders (I-VT) teamed up to introduce a bill that only two democratic socialists could have dreamed up.
  • Alice Rivlin, 1931-2019

    May 17, 2019
    Some economists do more than teach classes and write books. Alice Rivlin, who passed away this week, was proof. She was the first director of the Congressional Budget Office (CBO), from 1975 to 1983, serving under Presidents Ford, Carter, and Reagan. She helped develop many of the standards used for estimating how much legislation would cost if enacted. More importantly, she developed a reputation for keeping politicking out of the bill scoring.
  • Good and Bad of Government's Debt Collection Proposal

    May 16, 2019
    Earlier this month, the Consumer Financial Protection Bureau released a much-anticipated proposal to revamp the Fair Debt Collection Practices Act (FDCPA), a forty-two year old law regulating debt collection in the United States. Overall, the proposed rule is a mixed bag—some bad, some good. However, it is much better than what was expected out of the former Democratic administration, preventing much more sweeping changes.
  • Australian Government Tempts Mortgage Crisis

    May 15, 2019
    It seems that Australia’s political parties are suffering from collective amnesia. After spending the earlier half of the year criticizing banks for abrogating their responsible lending obligations—in response to a government investigation into misconduct in the industry—both of the major Australian political parties have decided that they’re going to encourage more of it.
  • The Economic Illiteracy of a 36 Percent Interest Rate Cap

    May 1, 2019
    Earlier this week, the House Financial Services Committee held a hearing on a draft bill that proposes to set a national 36 percent annual percentage rate (APR) cap. That is to say, for daring to provide credit to people who would otherwise be unable to access it—something considered to be Nobel Prize-worthy in other parts of the world—you could face up to one year in prison and a $50,000 fine for each violation.

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