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OpenMarket: Banking and Finance

  • 3 Reasons the Senate Should Pass Financial Reform

    March 13, 2018

    The Senate is expected to vote on its first major piece of financial reform this week since the Dodd-Frank Act of 2010. A bipartisan bill introduced by Sen. Mike Crapo (R-ID), the Economic Growth, Regulatory Relief and Consumer Protection Act, would bring decent relief to thousands of community banks and a number of regional banks across the country. While the bill does not go nearly far enough to fix the problems that Dodd-Frank created, it is a step in the right direction.

  • The Supreme Court Case That Would Catch the Law Up to Economic Reality

    March 9, 2018

    As more and more services move into platform business models as the lower transaction costs they facilitate increase consumer welfare, platform firms need assurance that the law understands how they operate, and does not unfairly hinder their development. While much more needs to be done to improve the regulatory environment for these companies, acknowledging the competitive structure of two sided markets is a significant step in the right direction.

  • The Government Killed Free Checking—Can Amazon Save It? 

    March 7, 2018

    Amazon's move into banking services spells good news for currently under-served consumers, who often rely on relatively expensive financial services such as payday lending or check cashing. While government regulation may have just about killed free checking, a new wave of innovative tech firms may be able to save it.

  • If the Payday Lending Rule Stays, Ability-to-Repay Does, Too

    March 6, 2018

    Many in the financial services industry seem to believe the CFPB's ability to replay rule doesn’t impact them and it’s not worth fighting. That is shortsighted. There is no reason to believe that the agency won’t impose the same burdensome regulations on other institutions in the future. 

  • Government Not Only Source of Regulation for Finance

    March 2, 2018

    One of the most misunderstood and underappreciated aspects of free market economics is the idea of private or “self” regulation. Up until recently, private enterprises largely self-regulated through forming partnerships or organizations that would privately enforce a set of standards or best practices. For banks, this included such things as lending standards and a firm’s capital structure. Over time, however, government agencies increasingly took over these roles and supplanted private regulation. But even today, examples still exist.  

  • Implement AEI-Heritage-R Street GSE Plan AND Honor Shareholder Contracts

    March 1, 2018

    It is welcome news that our friends from the American Enterprise Institute, Heritage Foundation, and the R Street Institute put forth a plan this week for the Trump administration to take steps to downsize the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. Noting the deadlock in Congress over GSE reform—even among Republicans—the plan looked exclusively at options that don’t require congressional authorization.

  • CEI Reacts to Trump's FY19 Budget Proposals for CFPB, EPA, and Regulatory Reform

    February 13, 2018

    CEI experts react to provisions in President Trump’s fiscal year 2019 budget proposal released on February 12, 2018.

  • SEC Chairman Jay Clayton's Comments on Cryptocurrencies Are Cause for Concern

    February 9, 2018

    Recent comments by SEC Chairman Jay Claytonmay signal an increasingly heavy-handed regulatory approach toward cryptocurrencies. Such an approach could curb innovation and prove counterproductive in fighting fraud. Instead, cryptocurrency rules should give consumers recourse against bad actors while preserving the important principle of “permissionless innovation.”  

  • The Myth of Independence at the Consumer Financial Protection Bureau

    February 5, 2018

    The myth of Consumer Financial Protection Bureau independence invalidates the Bureau’s protection from the President and Congress. The extreme insulation is predicated on protecting the Bureau from regulatory capture. But the CFPB has already been captured by special interest groups, who have pursued their own version of consumer protection against the public interest.

  • SEC Should Investigate California Municipalities for Climate-Related Securities Fraud

    February 1, 2018

    It appears a variety of California municipalities have gotten themselves in hot water. To investors of their bonds, they have claimed that they are unable to predict sea level rise or other climate risks. But they recently filed suit against a variety of oil and gas companies claiming the companies are causing the sea level to rise. The municipalities in their lawsuits give very explicit predictions as to how much they think the sea level will rise.

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