Beginning in 2008 there has been perhaps no area in the law that has seen more activity than in the arena of banking and investment law. The fact is that unless you have been living in a cave in some remote location you have at least some understanding of how volatile the banking and investment industries have become in recent months. Indeed, most experts agree that there has not been a more challenging time in the areas of banking and investments since the Great Depression some eighty years ago.
In regard to banking and investment law one of the more significant changes has been an alteration in the rules and regulations that have kept certain financial institutions from becoming involved in consumer banking. In recent months, a number of financial institutions that previously were not permitted to become involved in consumer banking have been permitted to do so. The argument has been that these institutions will become more financially viable if they were allowed to engage in providing banking services directly to consumers.
Another banking and investment regulation change that directly effects consumers centers on the amount of money deposited by a consumer in certain financial institutions that will be provided with FDIC protection. Historically, a consumer could have on deposit in a bank up to $100,000 that would be fully insured by the FDIC. In other words, if the bank ended up going under (which is becoming a common concern in this day and age) a consumer was insured for up to $100,000 deposited at such a bank.
With the current problems and concerns associated with the banking industry generally, the FDIC has temporarily increased the amount of money it will insure on behalf of consumers who deposit money with certain financial institutions. Until the end of December 2009, the amount of money on deposit at a particular institution that the FDIC fully will insure on the part of a consumer has risen to $250,000. Therefore, a consumer can now have on deposit at a single bank up to a quarter of a million dollars that will be fully insured by the FDIC until the end of 2009. (There is some talk that this date may be extended into the future although no firm or definitive decision has been made in this regard at this time.)
Finally, when it comes to banking and investment law, there has been a real tightening in the way in which financial institutions can package and sell home mortgage loans to other institutions and investors. Many experts maintain that one of the reasons why there are such significant financial problems today arises from the fact that institutions and individuals ended up investing in packages of higher risk loans – these packaged loans known as derivatives. Therefore, there have been some major changes in the way home mortgage loans can be “packaged and resold” from this point on into the future. In addition, there are likely to be additional changes in the laws governing the status of these derivatives or “packages” of mortgage loans and the buying and selling of these “securities” into the future as well.
Finally, both arbitration and mediation have resulted in allowing for some cases to move through the judicial system faster than what otherwise would have occurred. In addition, both mediation and arbitration have resulted in a reduction in the costs associated with certain types of cases. Most experts agree that both mediation and arbitration will continue to be more widely used in the court systems in many states across the country.