(Papers to be published in Chicago-Kent Law Review)
Aberrant Contracts – rent to own agreements, tax anticipation loans, legal lending contracts, payday loans, and title loans – are often referred to as “fringe banking” in the fringe economy. Because these loans involve exorbitant fees and interest rates, some view businesses that provide these loans or services as loan sharks, preying on the working poor by offering modern household necessities such as refrigerators, washers and dryers or services that consumers need but are unable to acquire with credit cards or traditional loans. On the other hand, advocates for these businesses assert that the consumer is provided with goods or services that cannot be otherwise afforded; the rates charged reflect the risks undertaken in dealing with this particular market. Are the concerns of Walker Thomas being resurrected and extended by these agreements? Should other contractual relationships be deemed “aberrant” such as the consignment of consumer goods? Is the legal academy adequately assessing the lender’s position? Should traditional bargain-for-exchange doctrines be used to police these agreements or other tools? What, if any, regulatory efforts address these contractual relationships? Are these governmental efforts effective and balanced? Is securitization of receivables of these contracts sound? A distinguished panel will address these and other issues. Professor Emeritus Joseph Perillo will moderate the panel discussion.
Business Meeting at Program Conclusion.