October 30, 2015
More than three years after the JOBS Act was signed into law by President Obama, the Securities and Exchange Commission (SEC) today will finally vote to approve equity crowdfunding rules. The final rule implementing Title III of the Jumpstart Our Business Startup (JOBS) Act of 2012, though late in coming, represent a first step for policymakers in getting public policy in step with America’s crowdfunding heritage.
When a small firm grows by giving a community of funders a share in the profits—rather than just token items such as t-shirts—that’s known as equity crowdfunding. And it’s an idea whose time has come, because it is an idea that has always been here. Henry Ford, as I have written in a paper for CEI, crowdfunded among his friends and neighbors 100...
October 27, 2015
I’m here on the Las Vegas Strip at Money20/20, a trade show and forum in the area of FinTech—a term used to describe a cross-section of alternative lending, cryptocurrencies, and new payment technology—that is a pretty big shindig. At around 10,000 attendees, Money20/20 is fast becoming the Consumer Electronics Show (CES) of FinTech. Or as the show’s boosters might say, CEA is becoming the Money20/20 of tech.
Anyways, some big news breaking here, such as JPMorgan Chase’s announcement of a mobile payments system to rival Apple Pay, and MasterCard’s “internet of things” initiative to enable mobile payments through keys,...
October 22, 2015
Today, a coalition letter signed by leaders of 33 leaders of free-market and conservative public policy organizations urges Congress to defund the Department of Labor’s (DOL) “fiduciary rule” takeover of 401(k)s and individual retirement accounts (IRAs). The letter, coordinated by the Competitive Enterprise Institute, states that Congress “must exercise its power of the purse” to stop this “action by the administration that has attracted bipartisan opposition owing to the massive negative effects it would have on Americans’ retirement savings.”
Stretching to the bone its narrow authority over pensions from the 40-year-old Employee Retirement Income Security Act, the DOL has proposed a rule that would cause great harm to middle-class savers. This rule...
October 5, 2015
The “blood” and “scalp” are those of Robert Litan, distinguished center-left economist and former high-level official of the Clinton administration Justice Department and Office of Management and Budget, who until recently was non-resident senior fellow at the liberal Brookings Institution. Litan, a friend of mine with whom I have engaged in conversations and civil disagreements, committed the “sin” in...
August 28, 2015
As the Dodd-Frank “financial reform” celebrated its fifth anniversary this summer, just about every financial business—as well as many nonfinancial firms—have come under its thumb. This is true whether or not these companies had anything to do with the financial crisis.
Community banks and credit unions that had nothing to do with the subprime mortgage meltdown suddenly found that they couldn’t issue mortgages to creditworthy borrowers, thanks to provisions such as “qualified mortgage” and “qualified residential mortgage” mandates enforced by the Consumer Financial Protection Bureau, the unaccountable new agency created by Dodd-Frank. Stable insurance companies such as MetLife that never faltered during the crisis and served policy holders for decades suddenly found themselves...
August 21, 2015
“A fundamental shift in Wall Street culture” is what the Department of Labor is aiming for with the “fiduciary rule.” That’s what DOL Deputy Assistant Secretary Tim Hauser said in an interview with FinancialPlanning.com during recent hearings on the proposed regulation that has been called “Obamacare for Your IRA.”
But the vast majority of comments submitted on the rule—most of which came far away from Wall Street—called on the DOL to change its own culture of paternalism, an analysis by the Competitive Enterprise Institute shows. Many of these comments took aim at the DOL’s explicit contention in the rule, which I have written about here and...
August 13, 2015
Our Indiegogo campaign for CEI’s new documentary “I Whiskey” is closing soon. So far, we have raised almost $75,000, but it’s not over yet. Please donate now if you haven’t, and if you have, you can always do so again.
You can get some great souvenir t-shirts from this rewards-based crowdfunding campaign. And CEI is also fighting to legalize equity crowdfunding , so that future entrepreneurs can legally offer profit-sharing from their projects, as well as souvenirs like t-shirts, if they choose to do so. So, this crowdfunding campaign is not just about whiskey, but the future of crowdfunding itself, as well as the future...
July 24, 2015
Just days after President Obama touted the supposed achievements of the Dodd-Frank financial reform law on its fifth birthday, a unanimous judicial panel—including an Obama appointee—dealt the administration a major defeat in its defense of the law. If the co-plaintiffs in the case—the Competitive Enterprise Institute, the 60 Plus Association, and a courageous Texas community bank––ultimately prevail, it will be a huge victory for American consumers and entrepreneurs being strangled by the red tape of Dodd-Frank and its Consumer Financial Protection Bureau (CFPB).
Today, a three-judge panel of the D.C. Circuit Court ruled unanimously that State National Bank of Big Spring, Texas, had standing to challenge the constitutionality of the Consumer Financial...
July 20, 2015
Progressives cheered Hillary Clinton last week when she said policy makers need to “go beyond Dodd-Frank.” She didn’t rule out repeal of some sections, but most took it to mean preserve virtually all of the law—which turns five on July 21—plus expand government intervention further into banking.
But that praise was short-lived when Clinton’s economic adviser Alan Blinder told Reuters, “You’re not going to see Glass-Steagall” reinstated in her administration. The New Deal-era Glass-Steagall Act separated commercial and investment banking until it was partially repealed by the Gramm-Leach Bliley Act, which passed Congress overwhelmingly in 1999 and was...
June 8, 2015
The following is an abridged and revised version of my keynote address to the FinTech Global Expo at the San Diego Convention Center on May 29, 2015. I was introduced by conference organizer Andrea Downs, President and CEO of Coastal Shows.
In startup investment, there have almost as many important developments in the past three years as there have been in the past 30. Let me take you on a very short trip on my time machine back to the days just before the passage of the Jumpstart Our Business Startups—or JOBS Act in 2012
In those days—during the reign of the 80-year-old ban of general solicitation of private stock offerings that the JOBS Act repealed—it wasn’t even clear that you could have a conference, trade show, or expo like this one. That was a concern...