Ideas for Teaching Banking Law When Everything Is Changing

Here's a discussion Cassandra Havard, Banking Law Professor at the University of Baltimore School of Law, would like to initiate.  She says:

"I'm writing to several banking law colleagues to ask how you've changed your syllabus since the financial crisis began. I'm tempted every semester to scrap the whole thing, but know that there are probably lots of innovative ideas of how to include the current events more.

One change I made last Fall was to have a hot topics newspaper discussion -- with each student presenting an article from the Sunday or Monday morning newspaper (my class met on Mondays). Our format was very similar to the news program Washington Journal on C-Span in the mornings, where the article is displayed on a document camera and highlighted in key places. I teach a seminar, which meets for three hours and the class is limited to 15 persons and I limit these discussion to the first 30 minutes of class."

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My comments from Texas Tech University School of Law:  I hope other banking law profs will share their ideas.  Here's what I do to keep the class fresh:

1.  Background is important.  Many people call every financial institution a "bank," with no distinction for non-depository mortgage lenders, investment banks, credit unions, or other types of charters with different powers and supervisors.  I use the textbook as a resource to put the business of banking in context, so that we can talk accurately about how banking evolved, who regulates what, and what the current powers and restrictions on each type of entity are.

2.  I invite Guest Speakers, including the General Counsels to the State Banking Department and the State Savings and Loan Department, banking lawyers from across the state, an investment banker from New York, and local bankers, to provide real world perspective.

3.  My course website includes links to each of the regulatory agencies, as well as Congressional committees, the State financial institution websites, and other sources.  We discuss current news items briefly almost every class day.  When developing issues are not covered in the textbook, I hand out packets that I prepare.  I suggest that students take a look at the Wall Street Journal online to follow the news.  This is a great class to be teaching now because everyone has questions and opinions.  I usually cap the class at 30-35, always with a waiting list.   

3.  In addition to a final exam to make sure we've covered the basics, I let each student choose a current topic, prepare a paper and make a group presentation (with powerpoint) to the whole class to share their research and gain public speaking confidence.  Following are some of the research topics I've assigned in recent years.  I provide some initial sources to get the students on the right track and I'm always impressed with their analysis and recommendations.  Of course, there's no problem finding new topics each year!

• Check 21:  Electronic Conversion and Check Truncation:  Why Does Wal*Mart Give Me My Check Back?  Why Don't I Get My Check Back in My Statement?  Will Paper Checks Become History?  Technology and the Changing Business of Banking
• Community Reinvestment Act:  What Is CRA?  Is It Serving the Purpose Congress Intended?  Why Are Banks Subject to CRA and Not Other Businesses?  Is This Fair?
• Financial Privacy Notices:  Why Do I Get All These Notices?  What Do They Mean?  Are They Accomplishing What Congress Intended?
• Federal Preemption:  When Can Federal Agency Interpretations Overcome State Law?
• FACTA:  What Is the FACT Act? Should Medical Information Be Used In Credit Decisions?  How will the affiliate marketing restrictions work?  What about requirements for "furnishers" of information to the Credit Reporting Agencies?  How will direct dispute resolution work?
• Financial Literacy:  What’s Available?  What’s Required or Recommended by the Federal Banking Agencies?  At the State Level?  Should credit counseling be mandatory before entering into a “high cost home loan”?  How can financial education address the problems in subprime lending?
• Sarbanes Oxley Section 404 Internal Controls:  What's the Impact for Large and Small Banks?
• Anti-Money Laundering:  Bank Secrecy Act and USA PATRIOT Act burden on banks after 9/11 - Is It Cost Effective?

• Loan Securitization – How did the originate-to-sell model for lending contribute to the subprime mortgage meltdown?  What role did securitization of subprime loans and the creation of complex derivatives play in the subprime mortgage crisis?  Who should we blame?  Borrowers?  Lenders?  Regulators?  Investors?

And a paper topic from my Fall 2007 Syllabus:  Subprime Lending and Predatory Lending – What’s the Difference?  What are the benefits and the pitfalls of subprime lending?  What are the ramifications for the U.S. economy and what are the global implications?

4.  Here's a compressed version of the basic topics I cover in a Banking Law course:

• Banking in the U.S. - Historical Development
• What Is A Bank?
• Money Supply and Payment Systems
• Regulation
• Charters - Types of Charters & How to Apply for a Charter
• Dual Banking System
• Bank Balance Sheet
• Loans as Assets and Lending Restrictions
• Investments as Assets and Investment Restrictions
• Deposits as Liabilities and Deposit Restrictions
• Capital Requirements
• Safety and Soundness
• Consumer Protection
• Activities Restrictions
• Geographic Restrictions
• Affiliates and Subsidiaries
• Enforcement
• Bank Failure

As a practicing banking lawyer for many years, I really enjoy this dynamic area of the law.  Getting the opportunity to teach the next generation of banking lawyers is great!  And frankly, I'm sure being a law professor for the last five years has been much less stressful than representing financial institutions through these economic times.  

AALS has a strong Financial Insitutions Section, which I encourage other banking law professors to join.  I'm always open to brainstorm about teaching and research in this area.  Just send me an e-mail!

(ag) July 3, 2009, in Banking Law