'I Would Not Recommend Banking to Any Young Person': Comments of the Week
August 16, 2013 11:16 AM
American Banker readers share their views on the most pressing banking topics of the week. As excerpted from the Comments sections of AmericanBanker.com articles.
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On the Consumer Financial Protection Bureau's 'disparate impact' investigation of PNC's mortgage lending:
"The CFPB is Rosemary's baby. Just wait until it grows up!"
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On the 'disparate impact' doctrine:
"Disparate impact may be a useful tool, if carefully employed, to identify where there might be discrimination, leading to further inquiry after the facts. But actual unlawful discrimination requires an intentional act to treat someone unfairly and illegally. There can be no unintentional discrimination, and using the disparate impact doctrine to do that is an affront to the rule of law."
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On the financial tech startup Perk Street shutting down:
"One of several 'disruptor' groups, as they like to be referred to. Blazing on the banking scene with the mantra that 'we will change everything so all will like and appreciate banking again.'"
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On why small banks find it difficult to cut operating costs:
"The challenge is that many organizations of all sizes are still run by management that learned banking in the 60s and 70s, when rates were high, spreads were generous and face to face interactions were the only way to sell. It's time to smell the roses and realize the industry (and the customers) have changed."
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On why small banks find it difficult to cut operating costs:
"There is little innovative thinking among community bank management. The community bank model is not dead by any stretch. However, new thinking must prevail if we are to 'gin out' respectable returns in the environment we are in."
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On why banks struggle to recruit young graduates:
"Recruiting employees is like recruiting customers. There has to be a value proposition that fulfills an underlying need.
Unfortunately, for the banking industry recruits don't see a career in banking as having value because, as your customer, [they see that] there isn't any real value within the current relationship."
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On why commercial banking is no longer an attractive industry for young people:
"It is much less common for candidates to find reputable, challenging training programs in the banks.
Second, many candidates now want to be making complicated, high-margin loans two-weeks after hire - no longer does the apprentice/mentor model seem to prevail."
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On banking as a career choice:
"I would not recommend banking to any young person. The system is broken! Too much regulation, too much power [given] to regulators.
All the work in the bank is now based on what examiners would do and most of them would have no clue how to actually get the job done."
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On the inconsistent calculation of risk-weighted assets across large banks:
"[Former Citigroup CEO] Vikram Pandit had a decent idea that never seemed to get much purchase: Require the regulators to prepare a hypothetical balance sheet for a large bank and require each large bank to run it through its internal models. Publish the results. That provides a way to compare one bank's analysis with the others without spending a lot of effort determining what the 'truth' might be. Which banks are 'liberal' and which 'conservative' would become clear."
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On Wells Fargo measuring 'active' Internet and mobile customers as those who log in at least once every 90 days:
"I do not recall ever measuring 90 day activity as an active customer in any industry I worked in.
When it comes to the internet customer in financial services I have pondered what the time frame for an active Internet/mobile customer should be.
I thought 30 days maybe too short of a time frame. I wonder what others use."
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On Rep. Jeb Hensarling's effort to privatize the secondary mortgage market:
"Strangely, I've heard banking associations in Jeb's home state bemoaning the fact that he's a free market Republican. Huh? Climb out of your bunker and take your blinders off and look at what's best for the country first, rather than just one industry. Neither Jeb nor any other legislator should be beholden to one industry - even if it's my industry."
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On New York regulator Benjamin Lawsky's aggressive style:
"Mr. Lawsky succeeds in making a lot of noise. And, it's certain he is adept at squeezing cash out of industries having deep pockets. Additionally, his team has 'rocked' the Alternative Financial Services (AFS) industry. It's a good wake-up call for those of us who became complacent and failed to employ multiple options for loan proceeds delivery and best practices."
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