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• The Federalist Society will be sponsoring a luncheon program on the predatory lending debate on October 20 at the National Press Club in Washington, DC.
• With a new federal law that took effect Oct. 1 making digitally signed documents legally binding, banks have begun to offer secure storage havens. The virtual boxes are initially aimed at small business owners and will offer 24-hour access to whatever digital information a customer chooses to store inside them.

• For more information on predatory lending, see: http://www.washingtonpost.com/wp-dyn/articles/A31505-2000Sep18.html.

• Democratic Presidential candidate Al Gore has suggested that more federal laws and regulations are needed to protect the public from predatory lending. Senator Phil Gramm, chairman of the Senate Committee on Banking, Housing and Urban Affairs, however, has questioned Mr. Gore's suggestion, stating, "I don't know how we can hope to address the problem before we have decided what it is. That is the first step and we cannot skip it."  According to Senator Gramm, "If we act hastily to stop predatory lending without knowing what it is, we could end up cutting off legitimate loan sources and ending the home ownership dreams for millions of Americans. I, for one, am not willing to take that risk." A Senate Banking Committee report on the issue follows http://banking.senate.gov/docs/reports/predlend/predlend.htm. Mr. Gore's suggestion that we adopt additional regulatory protections against predatory lending can be found in his recently released economic plan found at http://www.algore.com.
• The Federal Reserve Board issued examination guidance identifying sound practices for equity investment and merchant banking.  The guidance, contained in a supervisory letter sent to Federal Reserve bank examiners and supervisors as well as banking organizations supervised by the Federal Reserve, codifies and supplements existing supervisory practices. To read the rest of the press release, visit http://www.federalreserve.gov/boarddocs/press/general/2000/20000622/default.htm To view the Senior Loan Officer Opinion Survey on Bank Lending Practices, visit: http://www.federalreserve.gov/boarddocs/SnLoanSurvey/
• Section 713 of the Gramm-Leach-Bliley Act of 1999 (Public Law 106-102) directs the Board of Governors of the Federal Reserve System to study and report to the Congress on the default rates, delinquency rates, and profitability of lending activities undertaken in conformance with the Community Reinvestment Act of 1977 (CRA). The Board was directed to make the report and supporting data available to the public. See: http://www.federalreserve.gov/BoardDocs/Surveys/CRAloansurvey/

• Will the Net Turn Car Dealers into Dinosaurs? State Limits on Auto Sales Online
  By Solveig Singleton

Protectionism does not help consumers.  This study discusses the various state laws that are in place in the name of the consumer, but in reality only protect the middleman.  It is conceded that every company has a right to be in business, but not that there should be laws to ensure that they can continue to operate in the same way.  The Internet is changing the way people do business, and states are attempting to apply old laws to new business models. Also, due to the interstate nature of the Internet, these state laws may be construed to be violating the commerce clause of the Constitution.  Local dealers will not be run out of business due to their local service ability.  States should not fear this new development in technology and allow competition to take place. See: http://www.cato.org/pubs/briefs/bp-058es.html

• California considers internet tax

California lawmakers are hoping to send a bill to the state's governor that would require businesses to add sales taxes to online purchases made by state residents.  The bill, AB2412, which was introduced by state Assemblywoman Carole Migden in February, is being reviewed by the California Assembly today after it passed the Senate August 29 by a  majority vote.

If the bill is signed, it would represent the first legislation to tax Internet purchases based on current tax laws. See the full story at: http://news.cnet.com/news/0-1007-200-2654862.html?tag=st.ne.1002.tgif.ni

• The failure of the online retailer Toysmart has abruptly raised fundamental issues concerning a company’s rights to sell its web site customer list in federal bankruptcy court, a somewhat unlikely forum. TRUSTe, represented by Wiley, Rein & Fielding, is seeking enforcement in the bankruptcy proceeding of seal program commitments. In addition, because recent interventions by the Federal Trade Commission and the attorneys general of more than 40 states have raised the stakes significantly, the outcome of the case may not only play a pivotal role in shaping the law of privacy, but also in assigning institutional responsibility for privacy enforcement.
  
• Although the internet is still a tax-free zone, several states have efforts underway to tax online cigarette sales. For more information, see: http://www.washingtonpost.com/wp-dyn/articles/A37841-2000Aug28.html

• The Cato Institute is holding it Technology & Society conference from November 9-10 at the Hyatt Regency in Reston, Virginia. The conference brings together CEOs of the nation's leading high tech entertainment companies to explore the challenges the industry is facing with regard to intellectual property, free speech, and free trade. For more details and to register, visit: http://www.cato.org/events/techconf00/index.html.

• A conference at AEI brought together a distinguished group of scholars and banking policy experts to discuss the necessity of government regulation of banks. Some maintained that the government safety net was necessary in order to suppress instability. Others took issue with the over-reaction to perceived instability. When reviewed individually, it appears that the various elements of the safety net – deposit insurance, the Fed’s function as lender of last resort, and the Fed’s role in the large-dollar payment system – either do not represent a risk to the federal government (deposit insurance), could be administered by the Fed without risk (open market operations for its lender-of-last-resort responsibilities), or could be carried out effectively by the banks themselves without government involvement (a private payment system). The result of this conference shows a strong argument against government regulation of banks. CONTACT: AEI, http://www.aei.org.

• A credit card company issued a "pre-approved" card to a customer who used it to obtain 14 cash advances and then went bankrupt. The company argued that the debt should not be discharged because the card holder had procured the card through implied misrepresentations. Nope, said the Fifth Circuit, the card holder made no representations at all, and the debt is discharged. (AT&T Universal Card Services v. Mercer). The Ninth Circuit has gone the other way.

• Privacy Disclosure Requirements: Boon or Bane?
• The Federal Reserve Board today announced its approval of the proposal of Wells Fargo & Company, San Francisco, California, to acquire First Commerce Bancshares, Inc., Lincoln, Nebraska, and its banking and nonbanking subsidiaries. http://www.federalreserve.gov/Boarddocs/press/bhc/2000/200005303/default.htm
• Remarks by Vice Chairman Roger W. Ferguson, Jr. Before the National Association of Urban Bankers, Urban Financial Services Coalition, San Francisco, California http://www.federalreserve.gov/boarddocs/speeches/2000/20000526.htm