BankThink

Public-private partnerships designed to dispose of banks’ costly noncore assets allow governments to transform themselves into facilitators of a banking revival, banks to bolster their balance sheets and private investors to gain access to a pool of profitable assets providing attractive rates of return.

Mitt Romney may be getting impatient for the final rule on the "qualified mortgage" definition from the Consumer Financial Protection Bureau, but lenders are taking their best – and very conservative – guess at it for now.

Senator David Vitter (R- La.) predicts that regulators, using their authority under Dodd-Frank, will "once again bail out Wall Street and its creditors, perhaps with some feel-good (and probably politicized) restructuring of those firms for window dressing" when the next financial crisis hits.

FHFA is admirably trying to design a platform that will work under any future scenario for the mortgage market. But history shows large-scale projects can fall victim to sheer complexity.

Most customers want to spend less time on their finances, not more. They will flock where they are rewarded for transacting conveniently, rather than for counting their pennies through PFM.

Receiving Wide Coverage ...Bluebird Alights: The Bluebird debit card Walmart rolled out Monday marks another phase in the retailing giant's aggressive push into financial services, the Journal reports. The Bluebird card doesn't have a monthly maintenance fee, annual fee or activation fee, whereas other prepaid cards carry fees of $5 or more a month, as well as a nest of other charges, notes the Journal, which adds that Bluebird arrives as checking account fees reach record highs. The Journal also reminds readers that Wal-Mart has pushed aggressively into financial services despite failed attempts to obtain a U.S. bank charter. The Post notes that Walmart officials predict the card will have appeal beyond the unbanked. Anyone wondering how Walmart and American Express, Bluebird's other backer, plan to make money on the card may have to wait. On a call Monday with reporters, the companies declined to detail the financial relationship, although both said they would profit from the card, Times reports. Bluebird also may represent a realization by Walmart that consumers aren't connecting with its MoneyCard, run by Green Dot. "This market is growing, and it's moving beyond just that chunk of people that we consider to be underbanked," David Robertson, publisher of The Nilson Report, told the Times. "It includes people who might be wanting to buy a prepaid card for other reasons, like budgeting purposes." Green Dot's stock declined roughly 20% on Monday, though Walmart executives said the retailer would continue to offer Green Dot's MoneyCard. Though Bluebird represents "a direct challenge" to U.S. banks, according to the FT, some bankers may not regret losing Walmart customers to Bluebird, as many have weak credit scores and average household incomes from $30,000 to $60,000 a year, according to the report. JPMorgan Chase said this year that four out of five customers who hold assets of less than $5,000 with it were unprofitable, the FT notes. Still, there are 10 million unbanked households in the U.S., according to the FDIC, the FT's "Lex" column reminds readers. Prepaid debit cards also have come under scrutiny from regulators, who are said to be tightening controls on them, the article recounts.

Financial institutions can avoid negative headlines by monitoring feedback via social media, continually educating staff on how to talk to customers and making reputation risk a major part of their enterprise risk management program.

A non-profit organization is launching a campaign to make sure bank employees know about new whistleblower protections under the Dodd-Frank Act.

A LinkedIn discussion thread mulls a potential hazard of rigid risk management: Does an unyielding concern for risk impede financial institutions from coming up with creative solutions to traditional problems?

Parting wisdom from John Annaloro, CEO of the Washington Credit Union League and the then Northwest Credit Union Association.