Like many Washingtonians, I’m distraught about what’s happened to the Kennedy Center. It’s the cultural heart of the District, and it’s being destroyed by gross mismanagement that threatens not only the Kennedy Center itself, but also the incredible National Symphony Orchestra (with the Washington National Opera already having cut ties). But maybe there’s a solution: a receivership. (more…)
Category: Uncategorized
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Randy Picker – An Inspiration
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Randy Picker died on August 15, 2026. Randy will forever be a University of Chicago legend, a three-time alum, beloved professor, and, this summer, named to one of the most challenging roles a modern university offers: Vice Provost for Academic Affairs. Randy has been an academic superstar in multiple doctrinal fields, including competition policy/antitrust and intellectual property, as well as in methodologies such as game theory. This Credit Slips tribute emphasizes his contributions to the fields of bankruptcy and commercial law.
I met Randy in the 1990s as Congress expanded and intensified its aspirations for bankruptcy reform, and got to watch him testify before Congress several times on behalf of the National Bankruptcy Conference. Randy had been the reporter for the National Bankruptcy Conference’s exhaustive review of the Bankruptcy Code published in 1994 and again in 1997 – a monumental undertaking on many metrics, and one that has influenced policy discussions in the intervening decades. By the time I met him, Randy was well-recognized for his bankruptcy scholarship, including co-authoring one of the best known articles on municipal bankruptcy. At a March 1999 House Judiciary Committee hearing, he was given a tough assignment: to explain why a securitization provision in the bill, touted as a no-brainer by its advocates, was problematic. Here is an excerpt of his testimony at the March 1999 hearing:
The problem is that with regard to securitizations, understanding when you have a true sale and when you don’t turns out to be really hard…. The statute has taken what I would regard as what I think of as a deemed-tiger approach to solving this problem, and what I mean by that is as follows: I think of my 5-year-old son, Adam, walking into the room with his pink stuffed elephant and saying, here’s my tiger. I assume that would get some quizzical looks, right? We’d all look at Adam and say, you know, that’s an elephant, not a tiger. He would say, no, I’ve deemed it to be a tiger, and because I’ve deemed it to be a tiger, it’s therefore a tiger. Well, that’s exactly what this legislation does. If you look at the approach to a definition of transfer on page 286 of H.R. 833, and in particular line 10, a debtor who represents and warrants that a sale is a sale makes it a sale. All you have to do is say it’s a sale. You represent and warrant it’s a sale and you’re done. Well we have never in the history of commercial transactions law relied on the characterization of the parties to the transaction to determine what that transaction is, when it will have third party consequences. Do understand that asset securitization will have third party consequences.
(Find his full verbal and written testimony starting on page 355).
Even as other fields and projects consumed more of his time and attention, Randy continued service to the field of bankruptcy, including recently as Vice-Chair of the National Bankruptcy Conference.
Randy’s commitment to and appreciation of state commercial law also has a long pedigree. He served as a Uniform Law Commissioner (then called the National Conference of Uniform Law Commissioners, or NCCUSL) at a pivotal time, when Article 9 of the Uniform Commercial Code was being significantly overhauled. He wrote pathbreaking scholarship about secured credit that should inspire more such work now. Throughout his academic career, Randy continued to teach secured transactions with enthusiasm and rave reviews, to the benefit of students and the legal profession.
Speaking of courses, Randy lived the truth that passion about teaching and scholarly inquiry are mutually reinforcing rather than in opposition. Indeed, Randy was a pedagogical trailblazer. Did I even know what a MOOC was before overhearing Randy mention starting one? When COVID shutdown necessitated remote learning, he created more opportunities for learning and engagement, including taking Zoom’s potential to whole other levels with a remarkable summer seminar for alumni. And he contributed to the education of business school students as well as his law school teaching.
One last point: Randy was generous with people with no connection with the University of Chicago, with no particular aptitude for game theory or computer simulations (or improv, for that matter). I am such a person. Both early in my career and later, I sought his counsel on academic and professional things. He made time for me and was always constructive. That invisible professional service – whether it reflects kindness or social welfare maximization – is worth discussing out loud, and paying forward.
Deepest condolences to Randy Picker’s family. He will remain an inspiration.
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OCC Interchange Preemption Rule
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I submitted a comment letter to the Office of the Comptroller of the Currency regarding its proposed rule on interchange fees as non-interest fees and charges and its preemption order thereunder regarding the Illinois Interchange Prohibition Act.
My comment letter does not address the policy wisdom of the Illinois law. Rather, it focuses on the legal infirmities of the OCC rule. If we take the Major Questions Doctrine and the Unitary Executive Theory seriously, it is hard to see the authority for the OCC rule for national banks. (Yes, laugh away—we all know that these doctrines only apply in one direction, but let’s at least call out the hypocrisy.)
For Federal savings associations, the authority is even thinner; the OCC claims in a footnote that they have comparable powers, but the sole authority it cites subjects the Federal savings associations’ power to transfer funds to “applicable law,” which would be both the Illinois statute and federal antitrust laws, such that Federal savings associations cannot receive interchange fees that violate either the Illinois statute or federal antitrust laws. -
Would Anti-Weaponization Fund Payments Be False Claims Act Violations?
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I might be straying a bit from our usual debtor-creditor fare with this post, but I hope you’ll indulge me–there is a small bankruptcy hook. The President’s newly created $1.8 billion Anti-Weaponization Fund has been the subject of substantial political uproar. It’s not clear, however, that Congress is going to do anything to prohibit or limit the fund. Yet there might already be an existing legal tool that would make it very risky for anyone to accept a payment from the fund: the federal False Claims Act.
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Multi-Color Corporation: Venue Responses
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My amicus brief in the Multi-Color Corporation bankruptcy seems to have touched a nerve, with some interesting responses from both the debtor and Judge Kaplan. I’ll note that this is not the first time something has seemed amiss with New Jersey venue, and it’s not even the only pending case with strange venue.
I want to respond to the debtor’s claims about case distribution, to Judge Kaplan’s comments. In a separate post I’m going to discuss venue in the Eddie Bauer’s bankruptcy (which is with Judge Meisel).
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What’s Going on with New Jersey Chapter 11 Case Assignments?
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This morning I filed an amicus brief in support of the mandamus petition filed regarding the New Jersey bankruptcy court’s venue decision in the Multi-Color Corporation’s chapter 11.
It’s no secret that New Jersey has become on of the favored forum-shopping venues for large chapter 11 cases. It’s still not the premier filing venue, but it’s outpacing basically everyone except Delaware, SDTX, and SDNY when it comes to mega cases (>$1 billion in liabilities). What’s more interesting, though, is what happens to those cases when they get filed in New Jersey. The court’s local rules say that case assignment is by “vicinage”–basically north Jersey goes to Newark, central to Trenton, and south to Camden. But take a look at case assignments for cases with over $100 million in liabilities in NJ since 2018.
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A Cancer on the Chapter 11 System
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Judge Kaplan in Trenton has issued a significant, but troubling opinion on bankruptcy venue in the Multi-Color Corporation’s Chapter 11 that effectively blesses a blatant forum-shopping method of opening a bank account in a judicial district days before filing in order to establish venue through the location of the debtor’s principal assets. If this sort of forum-shopping is permitted, is there anything that crosses the line? (more…)
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The Council of Economic Advisers Discredits Itself
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The White House’s Council of Economic Advisers has put out a crazy report about the supposed costs of the CFPB. It’s frankly embarrassing to see such shoddy legal and economic analysis come out of the CEA.
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Viewpoint Discrimination in Banking
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I have a new draft article circulating, The Market for Ideas: Viewpoint Discrimination in Banking. The paper addresses both the positive claims that banks have engaged in viewpoint discrimination by “debanking” political conservatives and Christians and the normative claims from right and left that banks should be regulated as common carriers or public utilities. Basically, the evidence on debanking is remarkably weak; banks often have good reason to close accounts related to credit risk on charged-back payments and AML compliance burdens. On top of that, the normative case for common carrier or public utility regulation makes little sense: banks are not natural monopolies, the very nature of their business requires discrimination for credit risk, and if they are acting solely out of animus, the market will price against them for it.
At core, however, the real issue is that if the First Amendment means anything, then viewpoints cannot be treated as a protected class. Ideas have to sink or swim in the marketplace on their own without government subsidization.
The abstract is below:
May banks engage in viewpoint discrimination? That is, may a bank deny service to an anti-vaxxer or an antifa or an election denier? Concerns about viewpoint discrimination in banking have been a conservative cause for a decade, with “viewpoint debanking,” seen as an extension of progressive cancel culture. Yet there is scant evidence that banks, even in the face of regulatory pressure, have engaged in viewpoint discrimination, aside from a few cases related to the January 6 insurrection. To the contrary, bank account closings can often be explained by viewpoint-neutral concerns over credit and anti-money-laundering compliance risk.
Despite the dearth of evidence of an actual viewpoint discrimination problem, scholars on the right and left have argued for treating banks as either common carriers or public utilities, both of which are subject to a general duty of non-discrimination, not just in regard to personal status, such as race, sex, or religion, but also regarding customers’ lines of business, and political or religious views. Banks, however, have never historically been regulated as common carriers or public utilities and with good reason: they do not raise the concerns about monopoly power that animate common carrier and public utility regulation, and the very nature of the service they provide requires discrimination based on individualized counterparty credit and compliance risk. Moreover, prohibiting viewpoint discrimination forces a cross-subsidy among bank customers in which low-risk customers are forced to subsidize the high-risk ones, which just transposes the problem: viewpoint subsidization is itself viewpoint discrimination.
Allowing viewpoint discrimination means that all viewpoints are subject to market discipline: if a customer’s viewpoint imposes risk on a bank, then the bank should be allowed to price against it, while if a bank discriminates against a viewpoint solely from animus—that is, an expression of the bank’s own viewpoint—then market will price against the bank, which will lose market share to non-discriminating banks. Banks should be free to reject customers for any reason unrelated to personal status, including viewpoint. Doing so is a business decision that is best left to private actors and checked by the marketplace, not government.
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Fix Credit Card Competition with Market Improvements, Not Rate Caps
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There’s a problem with competition in the credit card market. But rate regulation, like a 10% usury cap, is not the way to fix it. The problems in the credit card market are informational: consumers cannot see precise interest rates when they apply for cards, so there isn’t competitive pressure on rates. Instead, card issuers compete based on opaque, but much more salient, rewards programs.
Since when is rate regulation the way we go about fixing informational problems? It’s the wrong tool for the job. Slapping on a 10% rate cap is a lot sexier and simpler than the sort of under-the-hood regulatory craftsmanship required to fix informational problems, but that doesn’t mean it’s the right solution. There are better ways to fix the consumer credit card market than a blunt tool like a rate cap that is likely to have a lot of unintended consequences.