BankThink

Adopting universal terminology will allow financial institutions to quickly identify, understand and share information about threats, plan for different scenarios and build the systems required to effectively defend their interests.

The board of directors must anticipate the unexpected and quickly execute strategic alternatives when a problem arises, regardless of its severity. Failure to do so could land their financial institution on the FDIC's problem list.

Receiving Wide Coverage ...Mobile Payments: Jack Dorsey's Square closed on a $200 million financing round that the papers say values the mobile-payments company at about $3.25 billion. The Journal's "Heard on the Street" column uses the occasion to offer a succinct overview of the disruptive implications of mobile payments technologies. Not only are the makers of cash registers and swipe terminals threatened (Nordstrom, for example, plans to go "completely mobile" in its department stores), so are merchants themselves to some extent, the column notes. That's because Square and other mobile app makers stand to acquire a wealth of valuable data about customer spending habits - information that merchants would prefer to control themselves. Wall Street Journal, New York Times, Financial Times

"The 20% down payment is not part of our proposal," said Consumer Financial Protection Bureau Director Richard Cordray, in Senate testimony, about the qualified mortgage rule.

Fanatical insistence on lending to risky borrowers to get them to buy more houses destroyed trillions of dollars. Now there's pressure to make even riskier, unsecured loans to these consumers. A freer, fairer market would do better.

The Consumer Financial Protection Bureau has, as required by Dodd-Frank, appointed members to a board that will consult twice a year with director Richard Cordray. The members range from bank executives to consumer advocates.

The Dodd-Frank Act has a champion in Treasury Under Secretary for Domestic Finance Mary Miller. To those who would repeal or roll it back she warns that doing so could lead to another crisis.

Underserved consumers need access to high-quality small loans from financial institutions that are based on sound underwriting and include tools for budgeting and saving.

Receiving Wide Coverage ...QE3,the Weekend After: The analysis of whether the Federal Reserve's latest round of quantitative easing is likely to accomplish anything continues. The Journal suggests big bank stocks will get a boost from Fed chairman Ben Bernanke's big move since it will increase lending and bank-revenue growth. It's also likely to underpin "the nascent housing recovery" and "extend the recent refinancing wave that has lifted mortgage revenue at a host of banks." But, according to the FT, the Fed's plan isn't likely to have an immediate effect on the larger economy since many banks are struggling to process back-logged mortgage applications, which could keep "rates on home loans elevated." And this Times article suggests banks may not be encouraged to push mortgage rates down as low as they could go since "by keeping the rates elevated, they are able to earn much larger profits when they sell the mortgages into the bond market." The collective assessment sounds an awful lot like the criticism of government stimulus efforts we've heard before: good for big banks on Wall Street, of little help to those on Main Street.

A couple of columns back I shared (actually, tried to start) a rumor that Discovery Channel was launching a new series called LoanShark Week. Not to be outdone, the state of Pennsylvania's Treasurer, Rob McCord, tried to draw attention to his department's unclaimed property database (about one-in-10 Pennsylvanians have unclaimed property, with $1.9-billion waiting to be claimed) by highlighting every Shark Week-related name his department could identify that had unclaimed property.