Differential Validity in Fair Lending

Fair lending’s disparate impact doctrine aims to address lending disparities. But which disparities? Traditional fair lending has narrowly focused on equal outcomes — examining differences in loan approval rates or interest rates. However, this singular focus overlooks other dimensions of disparities that are essential for fair credit access. This article challenges the conventional emphasis on equal outcomes, demonstrating how it has failed to address deep-rooted inequalities in traditional credit allocation while also stifling innovation in machine-learning and alternative data. We argue that disparities in the validity of creditworthiness predictions — the accuracy with which a model identifies creditworthy applicants — importantly impact equal access to credit and, in particular, the extension of credit to the creditworthy. Despite mounting empirical evidence of the harm of validity disparities, traditional fair lending enforcement inadequately recognizes this disparity dimension, a gap that may become increasingly harmful as lending decisions rely on advanced statistical methods. Future regulatory guidance, enforcement, and supervision should explicitly recognize validity inequalities across protected groups while addressing the accompanying challenges of this more comprehensive perspective on disparities, which is essential for equitable credit allocation

CRT2 S3E5

Photo of Mika’il DeVeaux, Chairman of the Cannabis Social Equity Coalition of New York State.https://scholarship.law.columbia.edu/crt2_podcast/1034/thumbnail.jp

The Revival of Section 5: A Return to the FTC’s Roots in a Time of Democratic Crisis

On November 10, 2022, the Federal Trade Commission (FTC or the “Commission”) issued a policy statement on the scope of unfair methods of competition under section 5 of the Federal Trade Commission Act (FTCA). This policy statement marked a significant shift, reviving a broad interpretation of the agency’s authority to police anticompetitive conduct. The antitrust defense bar reacted with alarm, arguing that the principles are overly ambiguous and lack guidance. This Essay contends that reaction is misplaced. The statement draws on a rich body of U.S. Supreme Court and circuit court precedent that the antitrust bar seems to have largely forgotten. This Essay first explores the historical enforcement of section 5 as an expansive tool reaching beyond the Sherman Act and Clayton Act. It then examines the period from the 1980s to the 2020s, when section 5 enforcement was largely dormant and marked by overreliance on policy statements and a narrow economic lens. Next, it analyzes the 2022 policy statement and argues that the antitrust defense bar’s reaction reflects a broader pathology—dependence on agency speeches and policy statements at the expense of statutory text and case law. Finally, it examines the renewed section 5 enforcement under the administration of President Joseph R. Biden Jr. in cases involving Amazon, pharmacy benefit managers (PBMs), the crop protection industry, and the “right to repair.” The Essay concludes by discussing section 5’s future and its importance in modern antitrust enforcement, particularly in the age of artificial intelligence (AI)

CRT2 S4E4

Photo of Kendall Thomas, Nash Professor of Law at Columbia Law School.https://scholarship.law.columbia.edu/crt2_podcast/1056/thumbnail.jp

Sticky Charters? The Surprisingly Tepid Embrace of Officer-Protecting Waivers in Delaware

This article examines the response to Delaware’s much-heralded 2022 legal reform that permitted corporations, for the first time, to adopt charter provisions exculpating corporate officers from liability for breaching their fiduciary duty of care. Contrary to widespread predictions that corporate actors would swiftly adopt officer exculpation provisions, our analysis — using both traditional and generative artificial intelligence (AI) methods — reveals a surprisingly low rate of uptake, over three years after the reform’s enactment. Our study makes both methodological and substantive contributions. Methodologically, we present a novel application of large language models (LLMs) to identify and interpret technical clauses in corporate charters. This approach significantly reduces the time and resources demanded by manual review and labeling. Moreover, unlike earlier machine learning tools, we demonstrate empirically that LLMs can achieve highly accurate results without requiring specialized training datasets. Substantively, our findings provide a cautionary tale about how the rhetoric surrounding corporate law reform can outpace operative reality. Despite significant excitement (and apprehension) over Delaware’s officer exculpation experiment, only a small minority of eligible firms have actually taken the bait. This reluctance manifests even among companies going public after the reform, indicating that transaction costs alone cannot explain the languid response. Moreover, muted stock market reactions to reform-related events suggest that investor pressure also is not deterring firms from embracing officer-facing waivers. We posit that two alternative explanations — (a) the possible irrelevance of the reform, and (b) an excess of managerial caution while awaiting court and stakeholder reactions —  offer more compelling insights into why Delaware’s statutory change seems to have delivered a bark that far eclipses its bite

In Defense of Creditors’ Schemes for Mass Torts

Companies in the United States have increasingly turned to reorganization under Chapter 11 of the Bankruptcy Code to resolve mass tort claims. Despite this experience, Australian companies have hesitated to use similar processes to achieve the same goal. Instead, mass tort liability continues to be resolved through traditional class action litigation. This essay argues that such hesitation is unfounded and that the creditors’ scheme of arrangement process in Part 5.1 of the Corporations Act 2001 (Cth) provides not only an appropriate method for resolving mass tort liability, but one which is in many respects superior to a Chapter 11 reorganization. Accordingly, it advocates for increased use of creditors’ schemes by Australian companies as a means of fairly and finally resolving mass tort liability

Why Constitutional Argument Matters

The program for this symposium promised that I would be discussing the “descriptive grammar of constitutional law.” To put my purpose less benignly, I should say that I mean to attack the practice of limiting what I will call “modal analysis” to its descriptive virtues. Part of that attack will be the claim that courts and their commentators should pay closer attention to the modal requirements of the fundamental forms of constitutional discourse, but not because straying from this is a kind of grammatical faux pas. After all, if the system I have urged for constitutional analysis — the system of classifying constitutional arguments and requirements for their use — were only descriptive of what courts and presidents and columnists do, then their very clumsiness — and worse — would amount to a kind of permissible reform

CRT2 S3E2

Photo of Flores Forbes, Adjunct Professor at Columbia Law School.https://scholarship.law.columbia.edu/crt2_podcast/1038/thumbnail.jp

CRT2 S2E2

Photo of Tom Oppenheim, Artistic Director at the Stella Adler Studio of Acting.https://scholarship.law.columbia.edu/crt2_podcast/1026/thumbnail.jp

CRT2 S3E3

Photo of Sarah Lamdan, Professor at CUNY School of Law.https://scholarship.law.columbia.edu/crt2_podcast/1040/thumbnail.jp