August 27, 2018
One would expect that years of failing policy would force policymakers to reconsider the wisdom of their actions. But not for the Australian Productivity Commission, the Australian government’s think tank, which recently advocated for doubling down on a decades-old policy of price controls for payment cards.
August 23, 2018
Today, the Senate Banking Committee will likely vote to send the nomination of Kathleen Kraninger for director of the Bureau of Consumer Financial Protection to the Senate floor. Based on her testimony at her confirmation hearing in July, the Competitive Enterprise Institute supports Kraninger’s nomination to head the BCFP (formerly known as the CFPB).
August 22, 2018
Most startups fail. The conventional wisdom is that about 90 percent of businesses fail within five years of their founding. For companies making new types of products in brand-new industries, maybe protective tariffs or other trade barriers can give them a little bit of a breather from foreign competition until they become established enough to compete on their own. This is the “infant industry” argument, and was first popularized by no less than John Stuart Mill.
August 21, 2018
Last Monday, the California Supreme Court ruled that interest rates on loans over $2,500 could be deemed ‘unconscionable’ even if usury laws permit them. In De La Torre vs. CashCall, the Court was asked to resolve an ambiguity in the California Finance Lender's Law - whether the interest rate on consumer loans of $2,500 or more render the loans unconscionable under section 22302 of the Financial Code.
August 17, 2018
As far as politicians’ transgressions go, I usually don’t get that riled up about hypocrisy. In the course of voting on and debating so many issues, lawmakers are bound to take some stances that are inconsistent with previous positions. Plus, I can respect a genuine change of mind and change of heart even if not explicitly acknowledged.
August 11, 2018
The Wall Street Journal reported late last Friday that Securities and Exchange Commission (SEC) regulators have “decided against trying to penalize the energy giant over its disclosures and how it accounted for oil and gas assets.” For years, climate campaigners have alleged that ExxonMobil defrauds shareholders by failing to take into account the financial risks of potential future climate policies that put a price on carbon.
August 10, 2018
In the last decade there has been a kind of separation of powers renaissance in the courts. Previously, separation-of-powers cases were rare and usually occurred when Congress did something very unusual (like give itself veto powers). But in the last eight years, almost every term of the U.S. Supreme Court has had at least one, and sometimes several, separation of powers cases.
August 8, 2018
In March, the Fifth Circuit Court of Appeals killed the Obama administration’s “fiduciary rule,” a prime example of the “bureaucrats know best” type of regulation that tries to override individual choice. The rule was based on the false premise that most holders of 401(k) and individual retirement accounts (IRAs) lacked the ability, in the regulators’ words in the proposed regulation, to “prudently manage retirement assets on their own” and “distinguish … good investment results from bad.”
August 3, 2018
The July 31 policy statement by the Office of the Comptroller of the Currency (OCC) announcing that it will now grant “special purpose national bank charters” to non-depository financial services firms is likely a game-changer for fintech in the U.S. This is because case law stemming from the Supreme Court’s decision in Marquette National Bank of Minneapolis v. First of Omaha Service Corp has established that any firm deemed a “national bank” by the OCC is exempt from interest rate caps outside of the state where it is domiciled.
August 1, 2018
After years of speculation, the Office of the Comptroller of the Currency (OCC) announced Tuesday that it would begin considering applications for special purpose national bank charters from financial technology (fintech) companies. The proposed “fintech charter” is an even more enhanced regulatory scheme than what was proposed under the Obama administration back in 2016, yet is an encouraging step, opening the door for online lenders to operate nationwide under a single regulatory regime.