BankThink

When I started in this business, if the Lead Balloon Corp. had hung up the Going Out of Business sign and you needed comment on how its closure would affect its credit union, you called the Lead Balloon Employees Credit Union. An airline's employees on strike? Append the airline's name with "Employees Credit Union," and you knew who to call.

As I watched the recent British Open golf tournament my thoughts strayed to the predicament facing the financial services industry and how we're rising to the challenge.

A quick link of interest for BankThink readers: Simon Johnson pointed out on The Baseline Scenario yesterday just how tiny Citigroup Chairman Dick Parsons' financial interest is in the company he chairs.

The banking industry has voiced a range of objections to the proposed Consumer Financial Products Agency, the new consumer protection regulator the Obama administration wants to establish. Even regulators say putting consumer protection in a separate agency would be a step in the wrong direction. But an analysis of fair lending law enforcement among bank regulators by the General Accountability Office concludes the present system isn't working well at all. The GAO's criticism of the current regulatory structure is explicit, but it's worth pondering whether there's implicit support for something like the CFPA woven into the report as well.

The regulatory restructuring debate has included its fair share of nostalgia for the days when investment and commercial banking were strictly separated—the days before lawmakers took a sledgehammer to the Glass-Steagall Act. But a new wall going up between the two may diminish the need for wistful reflection. Investment and commercial banks are sinking into an image war, with the winner’s prize going to the side that ends up less reviled by the public and lawmakers.

While credit unions have been faring better than many large banks and savings institutions in this current economy, it is now more important than ever to maintain member loyalty. Not only do credit unions need to solidify those member relationships, but they need to ensure those relationships are as deep as possible and profitable to the institution. How can this be accomplished?

I loved Frank Diekmann's column in the July 13th issue. I have believed for a long time that credit unions should first lift the value of the credit union space and then communicate and differentiate their individual brands. To win members from banks, we need to tell the larger credit union story. Though attempts have been made, we've never quite gotten it right because we've never found a way execute well on a national scale.

Checking into the Barcelona AC Hotel recently I was greeted with an announcement so shocking, so unbelievable, so completely unheard of, I stared blankly at the front desk clerk for a moment and then asked him if he would repeat what he had just said. Slowly.

If it indeed enjoys blood, the phantom squid plaguing the financial system must be feasting right now. Members of the financial media are tearing each other up over whether Goldman Sachs is good or evil, and the fight is providing an increasingly effective counterpoint to the mounting pile of stories about Goldman’s sickeningly large returns. The bank whose image problem stems from making too much money is getting a media boost that’s coming, ironically, free of charge.

There's evidence in today's Financial Times that idealists live on — on Capitol Hill. Sen. Mark Warner, D-Va., published an op-ed in the paper arguing for the creation of a single financial regulator. Released as the regulatory restructuring hubbub in Washington comes to a temporary halt and the last remaining lawmakers depart the District for their August recesses, Warner's piece demonstrates how very little progress policymakers have achieved in their attempts to fix a broken system.