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regulatory opacity October 29, 2010

Posted by Bradley in : consultation , add a comment

The Federal Reserve’s final rule on gift cards and the Credit Card Act was published in the Federal Register today. The rule states:

The Board received two comments on the interim final rule from a credit union trade association and a bankers’ trade association. Both commenters generally supported the interim final rule. The bankers’ trade association suggested that the Board exercise its exception authority to eliminate in-store disclosures where cards sold meet the final gift card rule’s substantive fee and expiration date protections. This commenter also requested an extension of the delayed effective date. No other comments were received. The final rule adopts the interim final rule as issued, with minor non-substantive edits.

The comments don’t seem to have been that significant and didn’t seem to have an effect on what the Fed did, but still, and in the spirit of transparency reflected, for example at regulations.gov, I’d like to know who these commenters were, and exactly what they said. The NAFCU’s website shows that it sent comments to the Fed dated April 14, 2010 on ” The CARD Act Final Two Provisions” although these comments are only accessible by members. Other comments by the NAFCU to agencies which publish responses,such as the SEC, (the Fed does publish responses to some of its proposals) are visible.

immigration law & community October 28, 2010

Posted by Bradley in : events , add a comment

Tomorrow at UM Law in Room 352, beginning at 12.30 pm, a half day symposium on immigration law and community with panels on undocumented immigration and community, immigrant women, and Haiti, followed by a training on Saturday on immigration law and deportation defense (here are the background materials for the training).

recent developments in financial regulation October 27, 2010

Posted by Bradley in : financial regulation , add a comment

Lots of developments, including:

G-20 Ministers Agree ‘Historic’ Reforms in IMF Governance

The Financial Stability Board published a report on Implementing OTC Derivatives Market Reforms

The Joint Forum published a Report on Developments in Modelling Risk Aggregation

The Basel Committee published a report to the G20 on its response to the crisis

The SEC has proposed rules on shareholder approval of executive compensation and golden parachutes, investment managers’ reporting of proxy votes, swap trading and clearing, issuer review of assets backing ABS

Agreement on the alternative investment funds directive in the EU

The EU Commission published Communications on An EU Framework for Crisis Management in the Financial Sector and on Taxation of the Financial Sector and a Green Paper on Audit Policy: Lessons from the Crisis (and there’s the Final Report on Strengthening Economic Governance by a task force to the Council).

strange questions journalists ask October 19, 2010

Posted by Bradley in : Uncategorized , add a comment

The BBC asks this question:

Fiji has admitted losing the legal document confirming its independence from the United Kingdom. But does that threaten its existence as a state?

Although the article compares this lost legal document to a lost birth certificate, it is more like a lost copy of a divorce decree. After all, a birth certificate is evidence of the notification of a physical fact (which exists independent of any formal evidence of that fact), whereas the legal document Fiji lost was evidence of a change of status.

monbiot sizes up the quango hit list October 19, 2010

Posted by Bradley in : governance , add a comment


Public bodies whose purpose is to hold corporations to account are being swept away. Public bodies whose purpose is to help boost corporate profits, regardless of the consequences for people and the environment, have sailed through unharmed. What the two lists suggest is that the economic crisis is the disaster the Conservatives have been praying for. The government’s programme of cuts looks like a classic example of disaster capitalism: using a crisis to re-shape the economy in the interests of business.

fighting compensation culture… again October 15, 2010

Posted by Bradley in : risk , add a comment

The explanatory notes to the Compensation Bill which became the Compensation Act 2006 (and which instituted the regulation of claims management by the Ministry of Justice) noted:

16.The Better Regulation Task Force (BRTF) report: Better Routes to Redress published in May 2004 found that the “compensation culture” is a myth but that it is a damaging myth that needs to be tackled. The BRTF identified the activities of claims intermediaries as contributing to a ‘have a go culture’ and recommended that claims intermediaries should be subject to statutory regulation, if self-regulation did not work.

David Cameron still seems to believe that the UK has a compensation culture problem and asked Lord Young of Graffham to investigate. Cameron is reported in the announcement of Lord Young’s report: Common Sense, Common Safety as saying:

A damaging compensation culture has arisen, as if people can absolve themselves from any personal responsibility for their own actions, with the spectre of lawyers only too willing to pounce with a claim for damages on the slightest pretext.

Did Cameron actually read the report? The report notes that the UK’s “compensation culture” is more a matter of perception than of reality:

Press articles recounting stories where health and safety rules have been applied in the most absurd manner, or disproportionate compensation claims have been awarded for trivial reasons, are a daily feature of our newspapers… Businesses now operate their health and safety policies in a climate of fear. The advent of ‘no win, no fee’ claims and the all-pervasive advertising by claims management companies have significantly added to the belief that there is a nationwide compensation culture.The ‘no win, no fee’ system gives rise to the perception that there is no financial risk to starting litigation; indeed some individuals are given financial enticements to make claims by claims management companies who are in turn paid ever-increasing fees by solicitors. Ultimately, all these costs are met by insurance companies who then increase premiums. However, any employer not covered by accident insurance faces bankruptcy, which encourages them to follow every recommendation of their health and safety consultant, no matter how absurd.

The Report makes a number of different proposals, including introducing a simple procedure for personal injury claims, replacing the Adventure Activities Licensing Authority with a Code of Practice; changing the risk assessment process, and introducing minimum qualification standards for health and safety consultants. The Report announces:

We should all accept that health and safety in non-hazardous occupations is little more than common sense in action.

And Lord Young wants to change the behaviour of insurance companies:

Insurance companies should cease the current practice that requires businesses operating in low hazard environments to employ health and safety consultants to carry out full health and safety risk assessments.

He also suggests that schools should be able to have a single consent form that would cover the activities a child might be involved in during his/her time at a school. This is an idea Cameron likes, but I’m not sure I would sign such a consent. Who knows when they might decide to go on a dangerous (and seemingly to be unregulated) caving trip? And what about sports injuries (see also here)?

consumer protection in the uk October 14, 2010

Posted by Bradley in : consumers , add a comment

More details on what is to happen with consumer protection here (wouldn’t it be nice if the announcement of changes to quangos (or non-departmental public bodies) linked to other related departmental press releases and announcements ?). Enforcement will be transferred to the Citizens’ Advice service and to local Trading Standards bodies:

In our proposed new regime, Trading Standards will be given responsibility for enforcement of almost all consumer law. Local threats to fair trading will continue to be handled at local authority level. But national and regional threats will now increasingly also be addressed through one or more dedicated, expert teams, within Trading Standards with work co-ordinated nationally for this purpose. Specific arrangements may need to be made in Scotland and Wales.
This approach chimes with the Government’s Localism agenda, should lead to significant efficiency savings and is a potential model for integrating local and national funding for regulatory enforcement in other areas.
In addition to these measures, I propose that responsibility for all non-financial consumer education, information and advice, and notably the Consumer Direct helpline, will transfer to the Citizens Advice service. I believe there is scope for other Government advice and information services also to become part of the Citizens Advice service, to reinforce a simple message to consumers – if you need information or advice, go to Citizens Advice.

Yes, but will they provide proper funding? And how is this decentralization of enforcement consistent with the idea of increasing transparency touted in the quangos announcement?

details of the uk quango hit list October 14, 2010

Posted by Bradley in : governance , add a comment

The list is here. The press release describes the rationale for the new approach, including the abolition of many arm’s length or non-departmental public bodies as being:

to radically increase the transparency and accountability of all public services.

One might ask how accountability is furthered by bringing functions back into a government which requires the support of people who renege on election pledges to remain in power.

The press release states that bodies which are not abolished are those which perform technical functions, require political impartiality, or need to act independently to establish facts. The Westminster Foundation for Democracy (founded 1992) is safe on grounds of impartiality (?) while National Tenant Voice has to find its own way in the wilderness. There are other examples of undoing what has happened over the last dew years. For example, the Security Industry Authority established under the Private Security Industry Act 2001 is disappearing as part of a “Phased transition to new regulatory regime”.

There are to be mergers. For example, the Competition Commission is to merge with the OFT although there seem to be some uncertainties about what happens to consumer protection after the merger (“Government will consult in the New Year on a merger of OFT’s competition functions with the Competition Commission and transfer of consumer and enforcement functions”). And the Gambling Commission, which warns people of the dangers of gambling is to be merged with the National Lottery Commission which doesn’t, except to warn people of scams which pretend to be connected to the (good) National Lottery (“Ensuring a fair Lottery for the nation £25 billion for good causes £37 billion in prizes).

house of lords committee says seasonal workers proposal does not satisfy subsidiarity October 13, 2010

Posted by Bradley in : eu , add a comment

In its report, the House of Lords EU Committee states:

The need for seasonal workers is, as the Commission says, “a common occurrence in most Member States”. However the needs of Member States all differ as regards the numbers of workers needed, the times at which and for which they are needed, the work for which they are needed, and many other matters. Additionally there are differences between Member States as to whether their needs for seasonal workers can be satisfied primarily by workers from other Member States (as is the case with the United Kingdom), or whether they need to rely mainly on third country nationals. Article 79(5) of the Treaty on the Functioning of the European Union recognises that the volume of admissions to their territory of third country nationals is a matter for determination by the Member States.
.. Because of these differences, we believe that the entry to and residence in each Member State of third country nationals as seasonal workers can be and should be governed primarily by a combination of these market factors and of the policy of each State towards the admission of such workers. Action at
EU level does not seem to be necessary.

fsoc details October 8, 2010

Posted by Bradley in : financial regulation , add a comment

The FSOC‘s documents announced on October 1 were published in the Federal Register on October 6th, and comments are due November 5th. Both documents show a recognition of the international context of financial activity. For example, the ANPR on regulation of non-banks asks:

Since foreign nonbank companies can be designated, what role should international considerations play in designating companies? Are there unique considerations for foreign nonbank companies that should be taken into account?

And the Volcker Rule RFI asks:

How should the international context be considered when implementing the Volcker Rule? Are
there any factors or considerations that should be taken into account regarding the application of the Volcker Rule to banking entities or nonbank financial companies that operate outside the United States? What issues does implementation of the Volcker Rule present with respect to the following:(i) Domestic banking entities that have access to foreign exchanges, (ii) foreign affiliates of domestic banking entities, and (iii) foreign non-bank financial companies