'Adversarial Regulation Is Good Regulation': Comments of the Week
June 12, 2015 7:30 AM
American Banker readers share their views on the most pressing banking topics of the week, from the qualities we should look for in the next sheriff of Wall Street to overdraft fee regulation. Comments are excerpted from reader response sections of AmericanBanker.com articles and from our social media platforms.
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On whether the next superintendent of New York's Department of Financial Services should emulate Benjamin Lawsky's tough-cop approach to regulating Wall Street:
"In financial matters, adversarial regulation is good regulation."
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On community-bank trade group head Camden Fine's assertion that the CFPB could put small banks' branch revenue at risk by issuing stringent overdraft regulation:
"Done properly, overdraft programs can have value to consumers. But Mr. Fine seems to suggest that community bank profits should determine consumer protection rules. If a bank's survival depends on taking advantage of consumers' inattention and irresponsibility, they don't deserve to survive."
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In response to a call for more private-sector competition in the secondary mortgage market:
"Nobody can compete with a [government-sponsored enterprise]. [We] cannot have 'competition' until we get the government out of the market as an issuer of [residential mortgage-backed securities] and bring in as much private capital as possible into the credit stack."
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On whether the private MBS guarantors are really interested in competing with Fannie Mae and Freddie Mac:
"All these ideas about competition ignore a central fact: there is no private money waiting to compete with the GSEs. There are exactly zero risk-taking rich people in the real world interested in actually taking a risk unless they see a clear path to dump it onto the government when the next crash comes."
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In response to the claim that customers will continue to frequent branches as long as there are skillful bankers ready to assist them in meeting their financial goals:
"The decline in branch [traffic] is not about skills it's about behavior. Unless you remove the smartphone from everyone's hands, you won't get them back in the branch, and that situation is just going to get more acute as we do more financial services contextually."
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In response to news that the black-owned bank M&F Bancorp plans to start reaching out to customers beyond its core demographic in order to stay profitable:
"We came to this conclusion 10-15 years ago and took the actions outlined in this article, including rebranding, adding online and mobile banking services and using social media.
We also find that it's important to maintain our authenticity and 'soul' by not viewing ourselves as a community bank that happens to be Black. We/you understand the Black community better than others, and in my opinion, the financial services industry can do a better job reaching minority and low- to moderate-income communities."
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On whether M&F should continue to focus primarily on serving African-American customers:
"I really don't see a problem with them remaining focused on a market segment. It's a good differentiator. And a segment I don't see any other bank doing. That said, their challenges and opportunities are largely the same as any other bank."
Pictured: James Sills, CEO of M&F Bancorp in Durham, N.C.
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