BankThink

Financial institutions with a long-term strategic interest in the credit card business should reap the benefits of the existing safe harbor and buy while it lasts. Those who don't should take advantage of the current environment and sell.

John Walsh, the former acting Comptroller of the Currency, has doubts about the Financial Stability Oversight Council, wishes Dodd-Frank mandated a single federal regulator for banking, but also says regulators need to be efficient in implementing rules required by the legislation.

Perhaps, given the wild ride of the past decade, banking can learn something from aviation, an industry that has posted an impressive and improving safety record over a similar time span.

Ratings drive ad dollars, and networks chase ad dollars like sharks chase chum. So it should come as no surprise that Discovery is planning a companion week of programming, and Credit Union Journal has the first look: Get ready for "Loan Shark Week."

Participant meetings are one of the best opportunities you have for your credit union's financial advisors to boost your assets under management and to provide much-needed guidance to members.

Defense credit unions, like all credit unions, stand behind these brave individuals and their families and offer financial services second to none.

Mitt Romney has stated he wants to repeal Dodd-Frank, but GOP members of Congress at the convention in Tampa indicated they're more likely to target the legislation in pieces.

A small number of alternative financial services providers would be permitted to operate nationwide and on the Internet without adequate policing of their products for underserved consumers.

Receiving Wide Coverage ...Fed Watch: The papers preview the speech Chairman Ben Bernanke is scheduled to deliver today at the central bank's annual retreat in Jackson Hole, Wyoming. "He must once again address whether there is more the Fed can do to get the economy going and whether it is worth taking chances on controversial new programs," says the Journal. "All along he has argued these efforts are worth it and appears likely to stick to that line." In an op-ed in the Journal, Gerald O'Driscoll, a veteran of the Dallas Fed and Citigroup now at the Cato Institute, argues against a third round of quantitative easing, warning it would "would act as a sugar rush to financial markets while spurring little if any growth." PIMCO's Mohamed El-Erian writes in the FT that some have urged Bernanke to set a nominal GDP target, which "certainly would be viewed by markets as a favorable development as a GDP target would effectively re-price the 'Fed put.'" However, El-Erian doubts Bernanke will endorse any specific policy in Jackson Hole; instead, expect the Fed chairman to lay out "future options and [reiterate] the general commitment to do more if needed." Last but never least, Izabella Kaminska of the FT's Alphaville blog wrote a characteristically thought-provoking post the other day on the less-obvious objections to further easing — not that it's inflationary, as the goldbugs and Austrian economists say, but that it's potentially deflationary and, perhaps more to the point for this audience, could "ultimately spell doom for many of today's financial business models." Kaminska quotes some examples from a working paper by Bill White of the Dallas Fed: "Futures brokers demand margin, and customers often over margin. The broker can invest the excess, and often a substantial portion of their profits comes from this source. Low interest rates threaten this income source and perhaps even the whole business model. A similar concern might arise concerning the viability of money market mutual funds, supposing that asset returns were not sufficient to even cover operating expenses." And in the interest rate swap markets, White cautions, "unexpectedly low policy rates can punish severely those that bet the wrong way. This could lead to bankruptcies and other unintended consequences." Any traders hoping for more cheap money from the Fed should perhaps be careful what they wish for.

Dodd-Frank, aimed at restoring confidence in the so-called Wall Street banks, had a devastating effect on Main Street banks, and is now threatening their long-established role as the backbone of the American Dream.