There’s been plenty of coverage of the First Amendment implications of President Trump’s proposed “Compact for Academic Excellence in Higher Education” that was offered to nine universities in exchange for supposedly gaining preferential access to federal grants. But the proposal also has a pair of tuition regulation requirements that have not gotten so much attention, but are in some ways equally troubling.
The “deal” being offered would require, among other things, that university signatories agree to freeze tuition for U.S. students for five years and, if endowments exceed $2 million per undergraduate, grant free tuition for students pursuing “hard science” programs.
This sort of federal price regulation is, as far as I’m aware, completely unprecedented. It’s also completely half-baked policy thinking. The impulse to control the cost of higher education is commendable, but the President’s proposal shows a complete lack of understanding of higher education economics and of the science education in particular. Instead, what he has proposed are faux cost controls and a bizarro nerd subsidy that would apply to almost no schools. In other words, rather than serious policy proposals to deal with costs of higher education and to encourage the study of the sciences, the administration has put forth a set of meaningless headline grabbing proposals that would only make things worse.
Author: Adam Levitin
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Faux Tuition Freezes and Nerd Subsidies: Trump’s Half-Baked Ideas for Higher Education Reform
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Hotel California (Deposit Account Edition)
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You can checkout anytime you like, but you can never leave. That’s how I’m feeling about one of my banks. I recently decided to close a particular bank account. Turns out that the bank, which allows me to open new accounts on-line, won’t allow me to close accounts except in person. Having to go into a branch is a minor inconvenience, and I’m sure that’s the point: the added friction makes it that much harder to break up with the bank and gives the bank another opportunity to try to sell me additional services. What’s more, it gives the bank another shot at levying some fees on the account for one reason or another.
If pressed, I’m guessing that the bank would claim some security issue means that they need to verify my identity in-person. That’s nonsense: they had no problem letting me clear out the balance via an on-line transaction. This is just about making the deposit account relationship stickier and therefore less competitive.
So if there’s still anyone home and listening at CFPB, this should be low-hanging non-partisan fruit: use your UDAAP authority to put out a Hotel California rule that will make it easier for consumers to voluntarily close their deposit accounts. Think of this as the deposit account version of click-to-cancel. If the consumer is able to transfer all funds out of the account on-line—that is if the bank offers on-line funds transfers and there’s no hold on the account at the time—the consumer should also be able to close the account entirely on-line.
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Bill Pulte’s Looking for Mortgage Fraud in the Wrong Place
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Reuters is reporting that Lisa Cook scheduled her Atlanta property as a vacation home on a loan estimate from her lender. That indicates that the lender was aware that the property was not going to be used as Cook’s principal residence. It’s going to be pretty hard to sustain a mortgage fraud prosecution in the face of the loan estimate.
Consistent with the indication that the Atlanta property was a vacation home, Cook didn’t claim a primary residence tax deduction for it (unlike what Pulte’s own parents did for their properties!).
If Reuters was able to unearth the Cook loan application materials, surely Pulte should have been able to do so. Either Pulte was wildly reckless by making the referral without pulling the loan file, including the application materials, or he proceeded despite having the loan file, which suggests that he acted maliciously. Regardless of whether Pulte acted recklessly or maliciously, his actions here are more than cause for his removal.
The Cook’s declaration of the property as a second home also suggests that if there was fraud—and it’s far from clear that there was—that it wasn’t by Cook, but by either the loan officer or her credit union. The loan officer might have wanted to facilitate the loan closing, while the credit union would have gotten a better price from Fannie/Freddie for a principal residence mortgage than for a second home mortgage. We’d need a lot more information to know if there was fraud and by whom, but if Cook had alerted the credit union that the property was a second home, I can’t see how this could rise to a criminal issue for her.
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Russell Vought Is Wasting Government Resources
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The CFPB has proposed a rule to constrain when it can designate non-banks as subject to supervision. The rule is one of very narrow application: only 20 institutions have ever been so designated over 14 years.
There’s a lot of silliness with the proposed rule, which eliminates none of the uncertainty it claims to address, but here’s what’s really galling: the rule is expected to reduce the total number of exams conducted by the CFPB by no more than one! What’s more the Bureau estimates that an exam costs a non-bank about $27,000 in labor costs. So the Bureau has undertaken the promulgation of an entire rule in order to save one entity $27,000/year. It will cost the Bureau more than $27,000 to promulgate this rule, which will also increase the Bureau’s litigation risk. Talk about a waste of government resources. This might well be the most inefficient regulation I’ve ever seen.
I thought this administration was about getting rid of needless regulations. And here it is creating one. Perhaps instead of a comment letter, I should have filled out the form on Regulations.gov to “Submit Your Deregulatory Recommendations.” smh.
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That Mortgage Document Doesn’t Say What You Think It Says
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I’ve been getting a lot of emails and on-line comments in recent days from people who work in the mortgage industry about the Lisa Cook mortgage situation. What I’m seeing in these comments is a serious gulf between lawyers and non-lawyers. The non-lawyers tell me that “This is how it is supposed to work.” To which my response is “Have you actually read the legal documentation?” (more…)
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Pulte’s Latest Bad Faith Accusation
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Bill Pulte’s newest fraud claim against Lisa Cook is more outlandish and desperate than his original attack.
Pulte’s latest claim is based on Cook having rental income from 2021 second home mortgage in Cambridge. Pulte alleges that this means that Cook defrauded the lender by claiming the property as a second home, when it was actually intended as an investment property.
Once again, this is Pulte acting in bad faith to abuse his authority. There is no basis whatsoever on the current evidence for Pulte to be making a mortgage fraud referral to DOJ for Cook’s Cambridge mortgage. (more…)
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The President’s Firing of Lisa Cook Is Illegal
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President Trump fired Federal Reserve Board Governor Lisa Cook tonight based on unproven allegations by his politically motivated henchman that Cook engaged in mortgage fraud. The President’s actions are illegal. He currently has no legal basis to fire Cook. Instead, he disregarded even a modicum of due process in order to achieve a political goal.
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Bill Pulte’s Enemy’s List
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The media coverage about President Trump's demand that Federal Reserve Board Governor Lisa Cook resign based on alleged occupancy fraud on a 2021 mortgage application has missed the real story: how terrifyingly inappropriate FHFA Director William Pulte has behaved. Pulte is using control of the GSEs to pursue a political enemies list. That is an incredibly dangerous abuse of office. We do not tolerate this with the IRS, and we should not tolerate it with FHFA. Pulte should resign.
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Will Corporate Treasuries Have Any Interest In Using Stablecoins?
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With the GENIUS Act signed into law now we get to see if stablecoins can actually walk the walk, not just talk the talk. The story the stablecoin industry has told is one of payments innovation, particularly for international payments, with stablecoins poised to displace the expensive and ungainly wire transfer system. Is this right?
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It’s Time to Get Rid of Law Reviews
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The Washington Beacon has published an absolutely jaw-dropping piece about the Harvard Law Review's article selection process, which allegedly gives substantial consideration not just to the assumed identity (race, gender, sexual orientation) of the author, but to the assumed identity of the authors of sources cited. (Who knew that I should have been indicating in every citation the race, gender, and orientation of the author?)
I haven't bothered submitting to HLR for some time, but if the allegations are true, it still leaves me dismayed that I have had my time wasted as an author and furious that I have had my time wasted doing outside reviews. Don't ask me to do free reviews when it's just for show. I'm just waiting for the class action…
It’s easy to dismiss the HLR fiasco as an example of woke gone wild, and that’s undoubtedly part of the problem, but the more fundamental problem is that student editors should have no business selecting articles. Indeed, as I will argue below, law reviews are a medium that has served its purpose and they should shut down—there’s a much better way to disseminate legal scholarship: connecting authors directly to legal research databases (direct-to-database publishing).