Checkpoint, Choke Point? A few BankThink contributors weighed in on "Operation Choke Point," the Department of Justice's probe aimed to prevent fraudsters from accessing consumer bank accounts by choking off their access to the payments system. Barry Brandon, executive director of the Native American Financial Services Association, argued that the initiative infringed on longstanding relationships between tribes and federal agencies. "As the DOJ's blanket actions continue to choke the illegal businesses, they also drown the legal ones, like ours, leaving consumers further underserved and tribal communities further isolated," he wrote. And former Federal Deposit Insurance Corp. Chairman Bill Isaac tagged the investigation as an attack on market economy. "If government bureaucrats, acting without statutory authority, can coerce banks into denying services to firms engaged in lawful behavior that the government does not like, where does it stop?" he wrote. "The same slippery slope that the DOJ uses today to choke off payday lenders from banking services could tomorrow be used on convenience stores selling large sugary sodas, restaurants offering foods with high trans-fat content or family planning clinics performing abortions." Some readers shared Isaac's sentiments." One commented: "I have other, related concerns: how agencies sometimes treat 'best practices' as though they are required … the use of supplementary information to augment/add to (rather than explain) regulations … and the use of [the Community Reinvestment Act] for social engineering, unrelated to the past practices of the industry." But other disagreed with his overall assessment. "All this is in service of a single point: anything that interferes with the sacred rights of the rich to make more money must be hated, scorned and defeated in detail," another commenter wrote.
The Future of Retail Banking: BankThink Deputy Editor Jeanine Skowronski shared some surprises from American Banker's Retail Banking 2014 conference upon her return from Orlando. Most notable among them: many bankers still believe in bank branches. "Taken together, these sentiments could change the negative connotations that have come to dominate the debate around branch banking … and even inspire some of the more ardent fin-tech enthusiasts to adopt [Chris] Skinner's other mantra: the bank branch isn't dead – it's just resting," she wrote. One commenter agreed that branches were still essential to the banking model. "Objective surveys bear out the fact that banking is still a 'people business'," they wrote. "Not necessarily for mundane, everyday tasks. But when there's a problem or a large transaction, depositors prefer face-to-face contact." But another reader suggested considering the sources before drawing conclusions. "[Bank of America] and Citi support [branches] because they got [them] and they're not easily disposed of," they countered. "And the tech operators support them because their business will grow faster if they don't go away."
Community BankThink: Kevin Tynan of Liberty Bank for Savings outlined what community banks can learn from the U.S. Postal Service and consultant J.V. Rizzi suggested dithering on M&A could be deadly for small banks. "Post-crisis structural changes will trigger a wave of community bank M&A, creating new regional bank powerhouses," he wrote. "Investors will pressure management to do something – acquire, sell or return capital through dividends or repurchases. There will be no runners-up in the coming consolidation wave."
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