James E. McNulty

Consumer Protection Settlements: Theory and Policy Issues

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In a new paper, I compare private and public class action settlements. I find a dearth of theoretical law and economics literature on public class actions, so I use the private class actions literature and a pivotal case study to highlight key issues and suggest areas for future research.

Class Actions Are Different. Class actions are quite different from other lawsuits. Frequently an attorney initiates the action rather than a plaintiff, and there is no formal relationship with members of the class.  There are clear economies of scale in class actions, and the plaintiffs’ attorneys perform a socially useful … Read more

Subprime-Mortgage Servicing Regulation and the Financial Crisis

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Scholars are attempting to fully understand all the causes of the 2007-09 U.S. financial crisis, hoping their efforts will ensure that something like this will not happen again. Nonetheless, in this research, weaknesses in mortgage servicing regulation have been largely ignored. Servicers collect payments from homeowners, keep records of mortgage balances, pool the payments and remit them to investors, and manage escrow accounts. In a world where mortgage assets are securitized, mortgage servicing is essential to the functioning of the financial system. Investors in mortgage-backed securities routinely expect that the servicer of the underlying loans will keep accurate records, and … Read more