In the wake of further developments by the SEC, many key players in the industry are currently combining efforts to petition federal authorities to see certain virtual currencies in a “different light.” The Venture Capital Working Group is led by Andreessen Horowitz, which includes another significant VC firm, Union Square Ventures, and lawyers from Cooley […]
Venture Capitalists Seek “Safe Harbor” for Virtual Currencies
Regulators Turn to Subprime Auto Lending
The Federal Trade Commission (FTC) announced on January 30 that it reached a settlement with two companies engaged in subprime auto lending. The two car title lenders – First American Title Lending and Finance Select – were alleged to have misled borrowers in their advertisements by failing to disclose the actual terms and costs of […]
Tomorrow’s Fantasy Football: Owning Stock in Players
A San Francisco-based startup has created a new financial product that may push sports betting to a new level, challenging regulators and existing law. Fantex, Inc. wants you to buy stock in Arian Foster, the Houston Texan’s Running Back. As an investor, you can receive up to 20% of Foster’s future earnings from his playing […]
Firm Advice: Your Weekly Update
Federal Reserve Governor, Daniel Tarullo, recently discussed an upcoming proposal to alter the regulation of foreign banks in the U.S. The proposal would require large foreign banks to establish “a separately capitalized top-tier U.S. intermediate holding company.” The holding company would be “required independently to meet all U.S. capital and liquidity requirements as well as […]
Banks and Industry Groups Continue to Question the Soundness of Volcker Rule
The Volcker Rule, which bans banks from participating in proprietary trading, is still worrying bankers. Financial industry groups are now focusing on an exemption from the rule that allows banks to make certain investments as a part of a legitimate liquidity management program. Regulators will have to distinguish between liquidity trading and proprietary trading. Unfortunately, […]
SEC Issues Controversial Rule Regulating Asset-Backed Securities
The SEC will soon put the finishing touches on a rule stemming from one of the most infamous cases of fraud from the 2007-08 financial crisis. The new rule prohibits certain material conflicts of interest between those who create or distribute asset-backed securities (ABS), including synthetic ABS, and the investors in the ABS. This proposal […]
SEC Rolls Out the “Skin in the Game” Regulation to Mitigate Moral Hazard for Lenders and Bond Issuers Involved in Asset-Backed Securities
On March 31 the SEC began seeking public comment on its proposed “skin in the game” regulation, which would require lenders and bond issuers of asset-backed securities (ABS’s) to retain 5% of the credit risk of the securities they issue. This requirement would apply to each of the tiers of ABS’s issued individually, preventing a […]
Live Blogging at the Dodd-Frank Symposium: Tracking Securitized Residential Mortgages
Nancy Wallace from the Haas School of Business followed her fellow Haas colleague with a talk on the evolution of residential mortgage recording and tracking and the legal implications of MERS. Some Key Highlights: Residential Mortgage Recording and Tracking has Diverged: while so-called “Shoebox” technology continue to be used to record and track property interest […]
Live Blogging from the Dodd-Frank Symposium: Bank Regulation and Mortgage Market Reform
We’re blogging live from today’s Dodd-Frank Symposium! Dwight Jaffee from the Haas School of Business kicked off the first set of Securitization and Governance panel presentations with a talk on Bank Regulation and Mortgage Market Reform.Key Highlights from the presentation: Moral Hazard in Securitization is wrong: Jaffee says that the hoopla over securitization causing the mortgage bubble […]
Bigger than Fannie and Freddie: Defining Qualifying Residential Mortgages
A prominent feature of the Dodd-Frank Act is the risk-retention provision in Title IX (Subtitle D, § 941). It requires banks that originate mortgages to retain 5 percent of the credit risk in their portfolios. The risk-retention requirement was created in direct response to the oft-cited lending practice that contributed to the housing bubble where […]