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OpenMarket: John Berlau

  • Gruber’s “Speakola” Virus and Pelosi’s Selective Memory

    November 14, 2014

    Obamacare supporters say that when deciding King v. Burwell and the related Halbig v. Burwell, challenges to the law that the Competitive Enterprise Institute helped fund and coordinate, there is really no need for courts to narrowly confine themselves to the language of specific provisions. Instead, they should look at the broad purposes of the law, as explained by its key architects. But one problem with this approach is these architects of the law—both in Congress and outside—seem to have selective memories about the structure of the Patient Protection and Affordable Care Act of 2010, aka Obamacare



    Until very recently, one of the key sources that Obamacare supporters have relied on to establish that purpose are statements and writings by the key architects of the law. For example, MIT Professor Jonathan Gruber’s writings on Obamacare were extensively...

  • CFPBs Prepaid Debit Card Rules Will Harm Low-Income Consumers

    November 13, 2014

    Today’s action by the Consumer Financial Protection Bureau to issue unprecedented burdens on providers of prepaid debit cards shows why the bureau needs to be held accountable to our elected representatives. This lack of constitutional accountability is why CEI, in partnership with the 60 Plus  Association seniors group and the tiny Texas community bank the State National Bank of Big Spring, is challenging the structure of the bureau created in the Dodd-Frank legislation of 2010 in a lawsuit to be heard before the D.C. Circuit on November 19.



    Though the CFPB says and many of the fawning headlines say the regulations are simply about consumer disclosure, the CFPB ...

  • The Economist: Interchange Fee Caps Benefit Large Retailers at Consumer Expense

    October 9, 2014

    Surprise! Price controls lead to unintended consequences—including transfers of wealth to parties who lobbied for those controls.



    That’s the actual – and unsurprising – result of the an amendment to the 2010 Dodd-Frank financial reform bill, sponsored by Sen. Richard Durbin (D-Ill.) that caps fees charged by banks for payment cards, mainly debit and credit cards. As The Economist reports:



    [T]he limits on “interchange fees”, as the financial jargon has it, have not worked out as planned. They have resulted, by one calculation, in the transfer of between $1 billion and $3 billion annually from poor households to big retailers and their shareholders. These were not the beneficiaries Mr...

  • See Me at San Francisco Crowdfund Banking and Lending Summit

    October 8, 2014

    My colleague Wayne Crews’ Forbes column Monday explained “How Entrepreneurs Can Speak Out About the Cost of Regulation,” but noted sadly that “businesses that never form in the first place because of regulation never get a chance to talk.”



    But there may be at least one exception. Next week in San Francisco, a conference will bring together entrepreneurs and investors to discuss, in part, businesses that can’t form because of the thicket of red tape.



    Coastal Shows, producer of the annual Crowdfund Global Expo (CFGE), will host the CFGE Crowdfund Banking and Lending Summit at San Francisco’s Grand Hyatt on October 16 and 17. A bevy of ...

  • For Fannie and Freddie Reform, Transparency Is a Must

    September 22, 2014

    Six years after the onset of the financial crisis, another Congress has adjourned without doing anything to rein in the government-sponsored entities (GSEs) that many experts have identified as the leading cause of the mortgage meltdown. But there is some good news. It appears that a phony “reform” that would actually make things worse has died a merciful death.



    As I have written in National Review and elsewhere, the so-called Johnson-Crapo reform introduced by the top Republican and Democrat on the Senate Banking Committee is “Fannie and Freddie on Steroids.” As I noted, “Not only would the government’s role...

  • You're a SIFI, Charlie Brown

    September 5, 2014

    “Good grief!”



    That’s what the Charlie Brown, star of comic strip Peanuts and cartoon spokesman for the MetLife insurance firm, might say about the government’s actions against MetLife yesterday.



    The Financial Stability Oversight Council (FSOC), an unaccountable, secretive task force of financial bureaucrats created by the Dodd-Frank “financial reform” bill that was rammed through a Democrat-controlled Congress in 2010. Yesterday, FSOC designated MetLife as a “systemically important financial institution” or SIFI. This means that the federal government officially considers MetLife to be “too big to fail” and subject to the same Dodd-Frank bailout regime set up for banks.



    Many firms would see being tagged as a too-big-to-fail SIFI as a blessing. As CEI argues in our constitutional challenge to the FSOC, part of our ...

  • Eric Holder Avenges Investor Fraud by Taking from Defrauded Investors

    August 22, 2014

    “Bank of America failed to make accurate and complete disclosure to investors and its illegal conduct kept investors in the dark,” declared a government official in a Department of Justice press release announcing yesterday’s record settlement in which Bank of America agreed to fork over $16.65 billion to settle charges it and companies it had purchased had deceived investors.



    Back in Washington from Ferguson, Mo., Attorney General Eric Holder announced at a press conference: “As part of this settlement, Bank of America has acknowledged that, in the years leading up to the financial crisis that devastated our economy in 2008, it, Merrill Lynch, and Countrywide sold billions of dollars of RMBS [residential mortgage-backed...

  • Subprime Auto Concerns Caused by Government Intervention

    July 25, 2014

    Should we worry about a crisis in subprime auto loans? That question has been asked in the financial media lately.



    My answer is yes, with caveats. While there are important differences in the auto and mortgage markets, there are similar government interventions that have the potential to fuel a bubble in car loans the same way they did for home loans.



    First, the differences. So far, thankfully, there is no auto equivalent of a Fannie Mae, Freddie Mac, or other government-sponsored enterprise to inflate the car loan market. Sure, there have been lots of bailouts in the auto industry in general, but the secondary market in car loans has developed largely on its own.



    And without a government backstop, it is much smaller than the mortgage market ever was. An otherwise alarmist front-page ...

  • Dodd-Frank Is Obamacare for Non-Health Insurance

    July 7, 2014

    “If you like your life, home, and auto insurance, you can keep them.”



    President Obama didn’t make this promise when he signed into law the Dodd-Frank financial overhaul on July 21, 2010, as he did regarding the health insurance law – Obamacare – that he signed into law a few months earlier that year. But as syndicated columnist Jay Ambrose points out, “if the Dodd-Frank regulatory law does what is now plotted, though he will still share responsibility for the insurance provision that, along with others, could bloody lots of noses.”



    As Dodd-Frank approaches its fourth anniversary, Obama is singing its praises. He told National Public...

  • Alito’s Excellent Defense of “Corporate Personhood” in Hobby Lobby

    June 30, 2014

    The groundbreaking decision today in Burwell v. Hobby Lobby Stores, in which the Supreme Court ruled 5-4 that Obamacare’s contraception mandate violates the religious freedom of two closely held corporations,  will be dissected heavily for days, and studied for weeks, years and decades. My colleague Hans Bader has more here.



    For consistent civil libertarians, one of the most remarkable—and favorable—aspects of the majority opinion by Justice Samuel Alito is a no-hold-barred defense of corporations asserting rights of “persons.” Though this case dealt with statutory rights under the Religious Freedom Restoration Act, and did not directly involve constitutional liberties, Alito...

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