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Cheryl Wade and Janis Sarra have a new book out entitled, Predatory Lending and the Destruction of the African-American Dream.  It’s available to order now.  My copy is on the way and I’m looking forward to getting into it.  The authors describe the book this way:

Since the Great Recession of 2008, the racial wealth gap between black and white Americans has continued to widen. In Predatory Lending and the Destruction of the African-American Dream, Janis Sarra and Cheryl Wade detail the reasons for this failure by analyzing the economic exploitation of African Americans, with a focus on predatory practices in the home mortgage context. They also examine the failure of reform and litigation efforts ostensibly aimed at addressing this form of racial discrimination. This research, augmented by first-hand narratives, provides invaluable insight into the racial wealth gap by vividly illustrating the predation that targets African-American consumers and examining the intentionally obfuscating settlement terms of cases brought by the U.S. Department of Justice, states attorneys, and municipalities. The authors conclude by offering structural, systemic changes to address predatory practices. This important work should be read by anyone seeking to understand racial inequality in the United States.

Predatory lending in the…

Sherlock Holmes aficionados distinguish between literary criticism that is “Watsonian” in perspective, and criticism that is “Doylist.”  As any fan knows, the stories were written by Arthur Conan Doyle as a first-person narrative; they purport to be the work of John Watson, who is recounting the exploits of his brilliant friend and sometime-roommate, Sherlock Holmes.  Fans who analyze the stories, then, have a choice: They can take an “outsider” perspective and discuss them as works of fiction authored by the real-life person Arthur Conan Doyle, or they can take an “in-universe” perspective and discuss them as the actual literary product of John Watson, unreliable narrator.  Depending on which viewpoint you adopt, you may end up in strikingly different conversations.  For example, a Doylist might look at inconsistencies in how Watson’s wife is described throughout the series, and attribute them to the multi-year period over which the stories were published; a Watsonian might argue that Watson was covering for a gay relationship with Holmes and couldn’t keep his lies straight.  Neither viewpoint is incorrect, but the two fans are talking past each other; in order to communicate, they have to define the relevant playing field.

That’s how I feel…

This news story in the Cowboy State Daily, Kraken: World’s First Digital Bank to Open in Wyoming, came to my attention this afternoon.  Wyoming granted Kraken a Special Purpose Depository Institutions Charter, a type of state bank charter enacted into Wyoming law in 2019.  The Kraken blog notes that “From paying bills and receiving salaries in cryptocurrency to incorporating digital assets into investment and trading portfolios, Kraken Financial will enable Kraken clients in the U.S. to bank seamlessly between digital assets and national currencies.”  Its “vision is to become the world’s trusted bridge between the crypto economy of the future and today’s existing financial ecosystem.”      

Not surprisingly, the banking law academic in me has lots of questions, and I’ll look forward to sharing some with BLPB readers when I’ve had more time to learn about this development.   

As a side note, in July 2020, the Office of the Comptroller of Currency (OCC) announced that “federally chartered banks and thrifts may provide custody services for crypto assets.”  The OCC charters national banks, and individual states grant state bank charters.     

Welcome to the final guest blog discussing the work of the ULC study committee that focuses on coercive labor practices.  In previous blogs I have discussed other frameworks the study committee is considering, including disclosure-based regimes and frameworks that are centered on procurement.  In this final blog, I will examine what some consider the next frontier for combating coercive labor practices in supply chains: mandatory human rights due diligence.   

More after the jump …

I write briefly to call attention to the opinion in SEB Investment Mgmt v. Align Tech., 2020 U.S. Dist. LEXIS 164661 (N.D. Cal. Sept. 9, 2020), partially dismissing a 10(b) action against Align Technology, the manufacturer of Invisalign teeth-straightening products.  Plaintiffs alleged, among other things, that the company’s financial projections were false for failing to consider what would happen when its patents expired and competitors entered the space.  The court rejected this claim on the ground that the projections were protected by the PSLRA’s safe harbor, which insulates forward-looking statements if they are “accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statement.”  15 U.S.C. § 78u-5.  According to the PSLRA’s legislative history, “boilerplate warnings will not suffice…. The cautionary statements must convey substantive information about factors that realistically could cause results to differ materially from those projected.”  Thus, in the Align case:

The Court agrees with Defendants that the statement was accompanied by adequate warnings. Defendants explain that, at the beginning of the investor call, Align’s representative stated:

As a reminder, the information that the presenters discuss today will include forward-looking statements, including statements about Align’s

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Earlier today, The Institute for the Fiduciary Standard held a panel on financial advice.  I served as the moderator for three fantastic panelists, Donald Langevoort, James Cox, and Ann Lipton.  As part of my role, I opened the panel with a summary of the current landscape for financial advice.  Hopefully this helps others who are trying to understand the current state of play:

In the past, American retirements had often been supported by three different sources of retirement income: an employer-sponsored, defined-benefit pension; social security; and personal savings.  Today, few Americans have all three sources of support.  Employers have largely shifted to offering defined-contribution retirement plans, allowing participants to contribute a portion of their salary to a 401k plan or similar plan, which the employer may or may not also make some contributions to.  At the same time, Americans, on the whole, generally lack financial sophistication, and often struggle to navigate our increasingly complex financial landscape.  In short, Americans need access to competent, trustworthy advice to make decisions.

Sadly, far too many Americans struggle to access high-quality and trustworthy financial advice.  Our fragmented regulatory system makes this even harder.  A person holding themselves out as a

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Welcome to the ongoing guest blog that discusses the work of the ULC study committee that focuses on coercive labor practices.  In the last two blogs (here and here) I discussed two frameworks the study committee was considering: one that focuses on disclosure and one that examines labor procurement. Both of these frameworks rely on the government-as-regulator model. In this next blog I examine the government-as-purchaser model, one that would harness the enormous buying power of many of our states into a uniform law. 

More after the jump …

I’ve talked before in this space about how regulation of ERISA plans and ERISA plan voting is really part of a larger debate about the proper role of shareholders in corporate governance, and even whether the purpose of the corporation is to maximize shareholder value.  And a few weeks ago, I blogged about how the Department of Labor had proposed new rules/interpretations to limit ESG investing for ERISA-governed retirement plans, and promote investments in private equity.

Apparently to honor Labor Day, the DoL took it a step further this week to limit ERISA plans’ ability to vote their shares, in large part because – it says – of excess costs due to “the recent increase in the number of environmental and social shareholder proposals introduced. It is likely that many of these proposals have little bearing on share value or other relation to plan interests…”

A lot of words after the jump. So many words.

Dear BLPB readers:

AALS Section on Real Estate Transactions and Section on Academic Support

The Changing Architecture of Legal Education: 

Real Estate Transactions as a Case Study

Seeking Panelists:

What real property law courses should law schools be teaching?

Who should be teaching these courses?

How should the courses be taught?

The Section on Real Estate Transactions and the Section on Academic Support seek to explore these questions and related issues at their joint online session during the 2021 AALS Annual Meeting, The Changing Architecture of Approaches to Legal Education: Real Estate Transactions as a Case Study.

Members of the legal academic community are invited to submit statements of interest in joining the panel of presenters who will discuss the following in the context of real property law and related courses (mortgage finance, securitization, commercial leasing, housing law, real estate development, etc.):

  • Law schools’ curricular choices
  • Course content and design
  • Teaching and pedagogy application.

As explained more in the “Background” section below, the Sections are specifically looking to highlight issues related to course offerings, curricular design, and teaching methodologies that can better prepare students for modern practice and ensure student achievement of course objectives. Statements of interest (including a description/summary …

Sergio Gramitto, co-author (with Lynn Stout and Tamara Belinfanti) of Citizen Capitalism: How a Universal Fund Can Provide Influence and Income to All just published Artificial Agents in Corporate Boardrooms in the Cornell Law Review.  Here is the abstract:

Thousands of years ago, Roman businessmen often ran joint businesses through commonly owned, highly intelligent slaves. Roman slaves did not have full legal capacity and were considered property of their co-owners. Now business corporations are looking to delegate decision-making to uberintelligent machines through the use of artificial intelligence in boardrooms. Artificial intelligence in boardrooms could assist, integrate, or even replace human directors. However, the concept of using artificial intelligence in boardrooms is largely unexplored and raises several issues. This Article sheds light on legal and policy challenges concerning artificial agents in boardrooms. The arguments revolve around two fundamental questions: (1) what role can artificial intelligence play in boardrooms? and (2) what ramifications would the deployment of artificial agents in boardrooms entail?