'Checkers Checking Checkers': Comments of the Week

American Banker readers share their views on the most pressing banking topics of the week. Comments are excerpted from reader response sections of AmericanBanker.com articles and from our social media platforms.

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On the argument that there are no economies of scale in banking: On the argument that there are no economies of scale in banking:

"When our processes are so complex that we have checkers checking checkers, and then G-man checkers checking the checkers, that don't scale."

Related Article: Why Scale Is Overrated in Banking, in Two Charts

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On how much bigness is worth in banking: On how much bigness is worth in banking:

"If banking is a competitive industry, then no bank should be able to dictate prices, and therefore scale shouldn't provide revenue benefits in theory. Whether revenue benefits from scale exist in practice is a good subject for investigation."

Related Article: Why Scale Is Overrated in Banking, in Two Charts

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On the relationship between a bank's size and the threat it poses to financial stability: On the relationship between a bank's size and the threat it poses to financial stability:

"Size really doesn't matter… 40 years ago a relatively small German bank (Bankhaus Herstatt), with less than a half a billion dollars in assets, caused immense chaos to the global financial markets when it failed."

Related Article: Why Pressure Is Building to Raise $50B 'Systemic' Threshold

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On the beneficiaries of the Dodd-Frank Act: On the beneficiaries of the Dodd-Frank Act:

"Glad to see that the [Dodd-Frank Act] has been a boon to so many banking consultants and analysts. Can only imagine how many weeks of wages from a low-wage worker it takes to pay for one hour of consulting or legal time."

Related Article: Four Years Later, Economic Cost of Dodd-Frank Remains Elusive

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On the Consumer Financial Protection Bureau's plan to let consumers publicly share detailed complaints against financial institutions: On the Consumer Financial Protection Bureau's plan to let consumers publicly share detailed complaints against financial institutions:

"Otherwise benign, even useful information positioned and broadly distributed under the righteous flag of 'consumer protection' gives rise to the unfounded, unproven presumption of wrongdoing.

Related Article: Bankers Rip CFPB's Plan to Disclose More Complaint Details

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On how Operation Choke Point is hurting legitimate businesses: On how Operation Choke Point is hurting legitimate businesses:

"We raise money online using crowdfunding and, although we found a major bank willing to take our accounts, they refused to process our online transactions, as 'investment opportunities' is a 'prohibited business category.' We ended up paying a significant premium to a high-risk processor."

Related Article: DOJ Memo Leaves No Doubt About Choke Point's Motives

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On the differences in how regulators treat banks and credit unions that offer short-term consumer loans: On the differences in how regulators treat banks and credit unions that offer short-term consumer loans:

"While the laws may be the same, the level of enforcement is not. Banks, especially small community banks, get hammered by bank examiners over small consumer loans … Credit unions simply are not subjected to the level of examiner review and second-guessing."

Related Article: B of A and Other Banks Back Credit Union to Solve Payday Problem

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On the suggestion that big-bank customers would readily defect for a more appealing nonbank alternative: On the suggestion that big-bank customers would readily defect for a more appealing nonbank alternative:

"That will only happen if Alibaba, Google, Apple or Amazon decide to fully implement competing banking services in the USA. The advantages banks and credit unions have today is how to navigate the regulatory environment that exists."

Related Article: Why Big Banks' Slick Strategy Will Be Their Downfall

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On the banking industry's outdated reliance on one-time passwords as a security measure: On the banking industry's outdated reliance on one-time passwords as a security measure:

"When are banks going to learn that one-time passwords in general and SMS of one-time passwords in particular are extremely vulnerable to multiple Trojans and attack vectors? The industry is creating a false sense of security by relying on this archaic technology for compliance and protection of customer transactions."

Related Article: Leaky Bank Websites Let Clickjacking, Other Threats Seep In

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American Banker readers share their views on the most pressing banking topics of the week. Comments are excerpted from reader response sections of AmericanBanker.com articles and from our social media platforms.

Comments (1)
Files upon spreadsheets upon binders upon archived files.
Posted by jfgaffney | Monday, July 28 2014 at 7:56PM ET
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