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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 except when otherwise noted.

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On community banks' reduced risk appetite:

"There will always be winners. If there wasn't a Warren Buffett, the market would have created one. It's the likelihood of success that has gotten much smaller for entrepreneurial-minded community bankers."

Related Article: Is Bank Risk-Taking an Endangered Practice?

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In response to a banking lawyer who criticized the way foreclosed borrowers fight deficiency claims:

"The mere existence of a deficiency claim suggests that lenders may well have failed in performing due diligence, lent an amount that represented an excessive percentage of loan to value, or might even have unloaded property carelessly, in haste, or in sweetheart deals. Allowing creditors the ability to hound debtors ever longer and more easily presents the threat of turning the poor and dispossessed into modern-day 'indentured servants.'"

Related Article: Debt Collection Law Warped by New Breed of Suits

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On the best way to ensure individual banks manage risk responsibly:

"Just as personal responsibility is the basis for a healthy citizenry, individual institution responsibility is the basis for a healthy banking industry. The means to this is simple: end deposit insurance and all stated and implied forms of government guarantees for the banking industry, together with 90% of all regulations on the industry."

Related Article: Banking's Tragedy of the Commons

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On the incentives for banks to lower credit standards:

"By lowering credit standards first, a bank exposes itself to adverse selection since it's the only game in town for the higher risk population. As more banks lower their credit standards, that risk gets distributed. So it's in everyone's best interest for all banks to lower credit standards."

Related Article: Banking's Tragedy of the Commons

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On whether looser lending standards pose a risk to the financial system:

"Why are credit standards being lowered? Is it because they were way too tight? If so, what's the problem? Is it because the new normal for borrowers is poor pay, few assets and massive needs for borrowing to get an education or just to stretch to cover current shortfalls, with little long-term hope for improvement? Lower standards in this case are a disaster waiting to happen."

Related Article: Banking's Tragedy of the Commons

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On the difference in the ways that regulators and bankers see risk:

"When I was a kid, we had a go-kart that we would race against time around a course in my backyard. But the kart was equipped with a governor that prevented it from going over 15 mph, so once we got the hang of taking the curves at full throttle, no one was able to beat anyone else's time. Boring! Then a mechanically minded friend figured out how to remove the governor, and we were off to the races again, with each new lap besting the time of the previous. It was great, exhilarating fun until one of our friends flipped over and had to be rushed to the hospital with a broken arm and a concussion.

"I think that injured friend became a regulator. The mechanically minded buddy? A banker."

Related Article: Banking's Tragedy of the Commons

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On the argument that banks need to balance high-tech investments with services that offer customers face-to-face financial advice:

"I do believe that banks need to shift their focus from providing detailed transactional data to giving financial advice, but … that doesn't mean this advice has to come from a human being."

Related Article: Go Digital, But Don't Forget Banking's Human Factor

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On how the recent repeal of a Dodd-Frank swaps provision highlights Wall Street's influence over politicians:

"This is the reason that I would propose a constitutional amendment that would restrict a candidate to obtaining funds only from the constituents the candidate would represent. Thus, all big business, unions, [Republican National Committee], [Democratic National Committee] and the Soros, Bloombergs, Kochs, and all other millionaires and billionaires that give money to candidates in order to project their agenda would be made illegal subject to severe penalties."

Related Article: Swaps Rule Repeal Shows that Community Banks Are the 99%

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On the argument that branches offer banks an opportunity to stand out from the crowd in the digital age:

"Traditional banks' point of differentiation is the branch, yet that is persistently declining in use and relevance. … How many bookstores are there today, compared to 20 years ago? Differentiation is not sufficient — it must also be compelling. Gradually but inexorably, bank branches will become less compelling to more people, and the point of differentiation will shrink in value."

Related Article: Branches Are Banks' Last Big Differentiators

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Arguing that banks should have clawback provisions for loan officers:

"It protects those who can't afford a particular loan from loan officers who are looking to make commissions and quota bonuses no matter the qualification of the borrower. There are too many 'loan officers' who are only watching for their own bottom line, not the borrowers' nor lenders'." (Via Newsvine.)

Related Article: Discussion: Should Loan Officers Have More Skin in the Game?

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Arguing against clawback provisions for loan officers:

"Why should an LO have skin in the game if they have no say in the credit approval? If companies want LOs to care more about credit quality, maybe they should explore making higher-producing LOs equity partners similar to like at law firms or ironically, how Wall Street used to be. This way, the LO can see the big picture and has more at stake when it comes to risk." (Via National Mortgage News.)

Related Article: Discussion: Should Loan Officers Have More Skin in the Game?

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On when it's appropriate for banks to claw back pay from loan officers:

"If there is clear loan officer fraud or misfeasance sure, go to the LO. If it is a credit issue where someone got qualified that should not have, the problem is not the LO but the underwriting. UW is controlled by the lender." (Via Newsvine.)

Related Article: Discussion: Should Loan Officers Have More Skin in the Game?

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