The FinReg Pod

Congress passed the Community Reinvestment Act (CRA) in 1977 to encourage depository institutions to meet the credit needs of lower income neighborhoods. The last major changes to the regulations implementing CRA came in 1995, which has led to no shortage of calls to modernize CRA for our digital era. In this episode, Jesse Van Tol, CEO of the National Community Reinvestment Coalition, offers his thoughts on recent regulatory proposals to modernize CRA and what the final outcome is likely to be under a Biden Administration.

Jesse Hamilton McCoy II is the James Scott Farrin Lecturing Fellow at Duke Law and supervising attorney for the Duke Law Civil Justice Clinic. Jesse also runs the Durham County eviction diversion program in partnership with Legal Aid of North Carolina and the Durham County Department of Social Services. In this episode, Jesse discusses the impact of various state and federal eviction moratoria on his clients and what needs to be done in order to prevent evicting millions of Americans in the midst of a pandemic that is only getting worse.

Art Wilmarth is Professor Emeritus at The George Washington University Law School and author of Taming the Megabanks: Why We Need a New Glass-Steagall Act. The book traces the evolution of the US banking sector from the late 19th century to today, and demonstrates that universal banks were at the center of the great Depression and the Great Recession of 2007-09. In this episode, Art makes the case for reestablishing a clear structural separation between banks and the capital markets and for prohibiting nonbanks from issuing short-term financial claims, like money market mutual funds, that function as deposit substitutes.

Bob Litterman is chairman of the Risk Committee and a founding partner at Kepos Capital. Bob was also the chairman of the CFTC’s Climate-Related Market Risk Subcommittee which last month released a comprehensive report that identifies climate change as a systemic risk to the U.S. financial system and presents 53 detailed policy recommendations, the first of which is the need for an economy wide price on carbon. In this episode Bob talks about his background in risk management, how he got interested in climate change, and the incentives that are needed to transition to a net-zero emissions economy. Climate Risk Disclosure Lab Report: https://climatedisclosurelab.duke.edu/2020/10/climate-risk-disclosure-lab-report/ CFTC Report: https://www.cftc.gov/sites/default/files/2020-09/9-9-20%20Report%20of%20the%20Subcommittee%20on%20Climate-Related%20Market%20Risk%20-%20Managing%20Climate%20Risk%20in%20the%20U.S.%20Financial%20System%20for%20posting.pdf

Dick Kovacevich was CEO of Wells Fargo from 1998 until 2007, during which time he built the company into a banking powerhouse. Dick’s relentless focus on selling Wells Fargo’s customers as many products as possible is what made Wells such a widely admired company, but it also sowed the seeds of Wells Fargo's later problems. In this episode Dick discusses his philosophy of banking and the fake account scandal that became national news in 2016 with Lee Reiners and special co-host Patrick Rucker from The Capitol Forum. Notes: 29:11 - Wells Fargo more like Home Depot than Goldman Sachs. 37:20 - Telling managers that he was disappointed in sales numbers. 55:47 - Attrition loss of customers employees 1:05:57 - What would he say to the employees who were fired  1:14:59 - Discusses whether executives should go to jail  1:18:00 - Discusses continuing to work at the bank

Climate change poses a "slow motion" systemic threat to the stability of the U.S. financial system requiring urgent action from financial regulators, including the Federal Reserve and the Securities Exchange Commission. That is one of the findings of a recently released landmark report commissioned by the U.S. Commodity Futures Trading Commission and put together by a panel convened about 10 months ago by CFTC Commissioner Rostin Behnam. In this episode Commissioner Behnam discusses the report's recommendations and next steps with Duke Law professor Sarah Bloom Raskin. Report: https://www.cftc.gov/sites/default/files/2020-09/9-9-20%20Report%20of%20the%20Subcommittee%20on%20Climate-Related%20Market%20Risk%20-%20Managing%20Climate%20Risk%20in%20the%20U.S.%20Financial%20System%20for%20posting.pdf

Richard Cordray served as the first director of the Consumer Financial Protection Bureau (CFPB). His new book, "Watchdog: How Protecting Consumers Can Save Our Families, Our Economy, and Our Democracy," shows how the Bureau quickly became a powerful force for good, suing big banks for cheating or deceiving consumers, putting limits on predatory lenders, simplifying mortgage paperwork, and stepping in to help solve problems raised by individual consumers. On this episode, Rich shares insights from his book and offers his thoughts on the Supreme Court's Seila Law decision. https://www.washingtonpost.com/opinions/2020/06/29/why-cfpbs-loss-supreme-court-is-really-win/ https://medium.com/@RichCordray/cfpbwhitepaper-193a5aed0d75

Rodney Hood is the first African-American to lead a federal banking regulatory agency, the National Credit Union Administration-the independent agency that oversees the nation's federally insured credit unions. Since entering the role last year, Chairman Hood has focused on building and reinforcing places that have fallen behind, often in areas where opportunity is limited, like hard-pressed urban neighborhoods and rural communities fighting decline. In this episode, Chairman Hood offers his thoughts on how financial regulators can make inclusion a major priority in the financial industry and what financial institutions can do to promote financial inclusion and opportunities in underserved communities. https://www.wsj.com/articles/how-banks-can-help-america-heal-11591311103 Want to contact the show? Reach out at reiners@law.duke.edu Interested in learning more about issues in financial regulation and policy? Check out the Global Financial Markets Center’s blog, The FinReg Blog.

Jim Sills, CEO and President of M&F Bank in Durham, North Carolina, joins us to discuss the role of Minority Depository Institutions (MDIs), the challenges they are facing during the pandemic, and the opportunities presented by a renewed focus on supporting black owned banks in the wake of George Floyd’s death. M&F Bank was founded in 1907 by a group of nine successful African American businessmen in Durham in a thriving district that came to be known as Black Wall Street. Today, M&F Bank is a $265 million asset state-chartered bank with over 70 employees and serving the five largest urban markets in North Carolina: Charlotte, Durham, Greensboro, Winston Salem and Raleigh. Want to contact the show? Reach out at reiners@law.duke.edu Interested in learning more about issues in financial regulation and policy? Check out the Global Financial Markets Center’s blog, The FinReg Blog.

In this episode, Liam Vaughan discusses his new book: “Flash Crash: A Trading Savant, a Global Manhunt, and the Most Mysterious Market Crash in History.”  The Flash Crash occurred on May 6th, 2010, when the Dow Jones Industrial Average plunged roughly 9% in a matter of minutes only to recover a large part of the loss within half-an-hour. Liam’s book is a fascinating account of how the U.S. government, well after releasing their official report on the causes of the Flash Crash, came to pin much of the blame for that day’s events on a sole trader trading out of his parents’ house in London. Liam is a senior reporter with Bloomberg and Businessweek magazine in London and can be followed on Twitter @liamvaughanBBG. Flash Crash: A Trading Savant, a Global Manhunt, and the Most Mysterious Market Crash in History https://www.amazon.com/Flash-Crash-Trading-Manhunt-Mysterious/dp/0385543654/ref=sr_1_1?crid=HPQJ0R9385FM&dchild=1&keywords=flash+crash+liam+vaughan&qid=1594860947&sprefix=flash+crash%2Caps%2C160&sr=8-1 Want to contact the show? Reach out at reiners@law.duke.edu Interested in learning more about issues in financial regulation and policy? Check out the Global Financial Markets Center’s blog, The FinReg Blog.