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'Field of membership is the biggest sham': Comments of the week

By Victoria Finkle
August 23, 2018 10:00 PM

Readers react to an argument that credit unions are being unfairly attacked, weigh in on trends in enforcement, reflect on the need for worker diversity programs and more.

Jelena McWilliams, nominee for FDIC chair
Jelena McWilliams, member of the board of directors with the Federal Deposit Insurance Corporation (FDIC) nominee for U.S. President Donald Trump, speaks during a Senate Banking Committee confirmation hearing in Washington, D.C., U.S., on Tuesday, Jan. 23, 2018. If confirmed by the Senate, McWilliams would join other Trump appointees who are crucial to his goal of rolling back rules for the financial industry. Photographer: Andrew Harrer/Bloomberg
On an argument that the administration should fill a Federal Deposit Insurance Corp. vacancy with someone who has state supervisory experience:

"That was precisely the purpose of the change in the law. In fact, the original version of the legislative language would have placed a sitting state banking commissioner of the FDIC Board."

Related: FDIC needs a state regulator on its board
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On an argument that credit unions are being unfairly criticized for their growth:

"Why not just tax all credit unions that have grown beyond around say $1 Billion to $5 Billion or forcibly convert them from a tax-free structure. To fix this should be easy-peasy lemon squeezy."

Related: Bank lobbyists’ hollow campaign against credit unions
J. Mark McWatters
J. Mark McWatters, acting chairman of the National Credit Union Administration, listens during a Senate Banking Committee hearing in Washington, D.C., U.S., on Thursday, June 22, 2017. Top U.S. banking regulators are sprinting to ease the Volcker Rule, stress tests and other constraints on Wall Street after the Trump administration issued a long list of proposals last week for rolling back post-crisis financial rules. Photographer: Andrew Harrer/Bloomberg
Another reader weighs in on a credit union executive's argument that the industry is being maligned to spare banks more criticism:

"Part of the problem with your entire argument is that you give the public the impression that credit unions don't make money (non-profit). That's simply an industry tag-line. Facts are facts. If you look at N.I.M. comparisons, credit unions have very similar N.I.M.'s. The field of membership is the biggest sham and the NCUA's lack of enforcement and oversight has made them the laughing stock of the industry. Act like a bank, get taxed and regulated like one."

Related: Bank lobbyists’ hollow campaign against credit unions
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Caucasian business hands holding tablet with business screen
On an argument that banks need to make better use of their customer data:

"Facebook users generally know that they're giving their data to Facebook in exchange for using the Facebook platform. Unlike bank clients who just want their data to be used to process and service their accounts and don't want their data to go anywhere. The comment, '....customers should know how and why their data is being shared, with an understanding of how it benefits them and the ability to opt in or out.' is a tall order and rife with compliance/privacy challenges."

Related: Don't let that data you're sitting on go to waste
Citigroup sign
Signage is displayed outside of a Citigroup inc. Citibank branch in the Little Tokyo neighborhood of Los Angeles, California, U.S., on Monday, July 13, 2015. Citigroup Inc. is expected to report second-quarter earnings results on July 16. Photographer: Patrick T. Fallon/Bloomberg
On Citigroup's plans to improve worker diversity:

"It's not rocket science. Bring back the 2 year management training programs so common at Wall Street firms and Banks in the 80's. If Corbat were serious he could also instruct each of the bank's 18-person operating committee (as well as ask each board member) to mentor one or more diverse candidates and have them shadow the executives for 18 months or so."

Related: Citigroup's three-year plan to reverse its falling diversity
A recent court ruling in Illinois advances a conspiracy case against prominent Wall Street banks.
A recent court ruling in Illinois advances a conspiracy case against prominent Wall Street banks.
On an analysis that compliance remains a top issue even after regulatory relief loosened some rules this spring:

"Perhaps the banking bill actually did as it was intended to do - sweep away some of the ineffective and perfunctory regulations that consumed bankers and regulators alike so that both groups could actually focus on making the system safer. The devil is in the details of those enforcement actions, but if the threats therein are real and the regulatory concern is warranted, then we should all applaud. None of us wants to go through 2008 - 2011 again."

Related: Reg reform hasn't translated into relaxed enforcement
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On an argument that more needs to be done to make overdraft rules clear to customers:

"How about a return to teaching financial literacy in schools to start? Bank customers don't often read the disclosures and other materials they receive from their banks and don't even know how their account fees are assessed? The same analogy can be be said about loans, cable tv, and another other service a consumer uses but doesn't understand the product/service because they didn't read all the literature provided."

Related: It's past time to overhaul overdraft
Victoria Finkle
BankThink Editor , American Banker
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