- John Tamny, Forbes Opinions
Key to a vibrant and increasingly productive economy is an efficient credit allocation process -- the mechanism by which all forms of credit, and not just bank loans, flow to those who can make the best use of that credit. Do government regulations influence and therefore distort – intentionally or not – the allocation of credit within the U.S. economy?
Bank capital and liquidity standards, consumer lending requirements, lending rules enforced by the Consumer Bureau, the Community Reinvestment Act, and government-sponsored enterprises (notably Fannie Mae, Freddie Mac, and the Farm Credit System) among other federal programs steer credit to favorites based on government priorities. Designating large financial firms as “systemically important financial institutions” might diminish their role as independent credit providers and subject them to further government direction. Some argue that Federal Reserve monetary policy, which greatly influences all interest rates, has consequent credit-allocation effects. Where did this all come from, where is it going, and what it means for the future of the economy will be questions for the panel.
The Federalist Society's Corporations, Securities & Financial Services & E-Commerce Practice Group presented this panel on "Credit to Cronies: Government’s Heavy—IF Hidden—Hand" on Friday, November 14, during the 2014 National Lawyers Convention.
At issue in Yates v. United States is the "anti-shredding" provision of the Sarbanes-Oxley Act which makes it a federal crime if one “knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object” with the intent to impede or obstruct a federal criminal investigation. John Yates was criminally prosecuted because he allegedly destroyed three fish that were too small to be caught legally. According to Mr. Yates, his prosecution was improper because he could not have had fair notice that a fish would be considered a “tangible object." Our expert attended the oral arguments and offered his impressions to a live Teleforum audience.
Members of the Federalist Society’s Financial Services & E-Commerce Practice Group Executive Committee will provide an update on recent important activity at the Consumer Financial Protection Bureau (CFPB) on this Teleforum conference call. Recent developments include the CFPB Student Loan Ombudsman’s comments at a meeting of the American Bar Association Business Law Section, the CFPB’s lawsuit against Corinthian Colleges, Inc., a recent CFPB report on fair lending in the indirect auto loan market, a report from the Government Accountability Office on the CFPB’s data collection practices, Director Richard Cordray’s remarks on public service and student debt, and a Washington Post article on whether Wal-Mart and Apple’s provision of some financial services may subject them to oversight by the CFPB.
Members of the Federalist Society’s Financial Services & E-Commerce Practice Group Executive Committee provided an update on recent important activity at the Consumer Financial Protection Bureau (CFPB) on this Teleforum conference call. Recent developments included a Washington Examiner article titled “Revolving Door at Regulator CFPB Enables Former Bureaucrats to Cash In at Taxpayers’ Expense”, the repeal of the bank regulators credit practices rules and the simultaneous warning that agencies will still enforce them, the CFPB’s barring the sale of student loans by Corinthian Colleges Inc., a CFPB report promoting “financial wellness” in the workplace, the CFPB's announcement that it will hold a field hearing on auto finance on September 18 in Indianapolis, and the introduction of bipartisan legislation that would invalidate the CFPB’s March, 2013 auto finance guidance and require the CFPB to proceed, if it chooses to do so, by rulemaking.