Anmerkungen:
In: Akron Law Review, Vol. 46, No. 1, p. 2-46, 2013
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 4, 2013 erstellt
Beschreibung:
The cycle of poor credit history is a powerful one. An individual or business with a low credit rating, perhaps from the late payment of past bills, will have difficulty gaining access to traditional forms of lending. According to some sources, many banks within the United States may even collect data about the financial histories of individuals with respect to their bank accounts and use that information to prohibit individuals with a poor record from opening or maintaining a checking account. Yet, it is the status of maintaining a traditional bank account that provides creditors with the assurance that an individual or business is credit worthy. Without access to credit, those with a poor or non-existent credit history will not have the opportunity to improve their ratings. Thus, the cycle continues: those with bad credit are unable to gain access to loans or to make improvements to their businesses. They are stuck in the fringe economy: a banking world where consumers and small businesses alike suffer from questionable practices and, at least for the consumers, inadequate regulation. This Article considers fringe banking issues — the gaps or problems in service for both individuals and businesses when the usual banking channels are impractical or even unavailable. Some people may only have recourse to the robust, but often very expensive and less protected, financial products sold for what is, or is supposed to be, a very short-term basis. The Article first examines the fringe banking world, but ultimately considers whether and how consumer protections are needed for franchisees. Small businesses, including franchisees, are often the forgotten players in the fringe economy. If a franchise actually engages in selling fringe banking products, it almost certainly got to that position by not engaging in the financial practices it now trumpets and sells to others. If a franchisee buys fringe banking products, whether and how this small businessperson deserves the regulatory protections of a person not engaged in business is a matter not just for statutory or administrative law but also requires consideration of the franchise relationship and its likely impact on franchisee finances