BankThink

The industry's movement toward plain-vanilla mortgage products since the crisis masks deficiencies in the underwriting process that remain to this day.

If TAG is senselessly allowed to expire, many depositors may sever their relationships with the smaller banks in their communities and opt to place their money under the "protection" of the Too Big to Fail institutions.

Wall Street JournalIf you want to catch up on FinCen's proposed expansion of anti-money laundering and know-your-customer requirements, which was released for public comment in February, the Journal offers a primer today. The gist is that "Treasury wants financial institutions to understand who owns or controls an account and keep detailed records that law-enforcement officials can access." While regulators have wanted banks to identify beneficial owners of accounts for years, the rule would codify this expectation. And not just for banks: Securities and commodities brokers and mutual funds would also have to identify beneficial ownership, and FinCen might extend the rule to mortgage lenders, casinos and even gemstone dealers. The Journal quotes an ABA official summing up why banks are wary of this plan: "You don't want to deputize bankers as junior G-men. … We're not good at it." Come to think of it, that pretty much sums up the trouble with AML laws in general. FinCen's holding a hearing on the proposal in Chicago next week.

Central clearing for over-the-counter contracts will undoubtedly reduce risks, but the market still has multiple regulators and multiple sets of rules for different players and for different instruments.

The attorneys general for Oklahoma, South Carolina and Michigan have joined a lawsuit challenging the constitutionality of the Dodd-Frank Act. They filed a complaint in U.S. District court about provisions in the legislation allowing the FDIC and Treasury to unwind troubled companies.

Personal motivations aside, many felt the hire made sense for the Financial Services Roundtable since it fortifies the trade group's relationship with Congress. What impact do you think Pawlenty is likely to have on banking policy?

Former Minnesota Gov. Tim Pawlenty, the incoming head of the Financial Services Roundtable and outgoing co-chair of the Romney campaign says the Dodd-Frank Act needs "refining." He also says banks should "stop doing stupid things."

China blocks U.S. banks from operating there. We should reciprocate. There's nothing to gain from giving keys to our banking system to entities owned and controlled by an adversary state.

Wall Street JournalBank of America is accelerating its job cuts, aiming to trim 16,000 positions by the end of the year, according to a front-page story in the paper.

What is good for the big banks is not necessarily good for the economy and the growth of jobs, writes the chairman of Signature Bank in New York.