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Slideshow

'Poster child of the deep state': Comments of the week

By Victoria Finkle
October 4, 2018 10:00 PM

Readers weigh in on infighting at the Consumer Financial Protection Bureau, react to a push for open banking in the United States, consider small-dollar bank loans and more.

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On an argument that the U.S. banking industry needs to move to adopting open banking:

"Not sure it's fair to say the U.S. is way behind the curve. 'Open Banking' isn't dictated and regulated by the federal government [yet] but that doesn't mean capabilities don't already exist. Hard to make comparisons to the UK and Australia when US GDP is $18.6 trillion, UK GDP is 2.6, and AU GDP is 1.2 (2016 numbers). The scale is orders of magnitude different. Think 300 UK banks against several thousand U.S. Agree that improving the system is a daunting task, evolution is the way forward."

Related: U.S. way behind the curve on open banking
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On the response to news that a top official at the Consumer Financial Protection Bureau was involved in the writing of a controversial blog 14 years ago:

"What are the odds that an entire fair lending enforcement division and the union join forces to call for the resignation of a Mulvaney appointee? I guess they need something to do after their indirect auto lending guidance was squashed."

Related: 'It is an issue for all of us': Dissent spreads at CFPB over top aide's writings
Eric Blankenstein, head of CFPB enforcement
Another reader weighs in on the findings regarding CFPB official Eric Blankenstein:

"Blankenstein's 24 year old posts may very well be racist, but the Enforcement division of the BCFP is the poster child of the deep state that does not want to follow the direction of the executive branch for which it works. Also, Enforcement can't cite one action by Blankenstein thwarting any fair lending decisions of the Bureau. This is simply The Resistance, dominated by Ivy educated lawyers trying to make a name for themselves. A Reagan-esque firing might be useful and in order."

Related: 'It is an issue for all of us': Dissent spreads at CFPB over top aide's writings
CFPB's Patrice Ficklin.
On Patrice Ficklin, head of CFPB's fair lending office, pulling her support for Blakenstein in the wake of news about his blog posts:

"Ficklin is the one who should resign after her personal crusade against the auto finance industry on discredited legal theories and indefensible made-up statistics were effectively grounded by the U.S. Supreme Court. Banks, dealers, and finance companies incurred incredible compliance burdens to meet her demands during the Obama Administration. All without cause and unquestionably, the costs of legal, regulatory and compliance were passed on to consumers, all due to Ficklin."

Related: Top CFPB official yanks support for political appointee over past writings
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loan application in business folder showing financial investment concept
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On an argument that new short-term loan products from banks could still harm consumers:

"'High-cost installment loans also often add to already unsustainable debt burdens.'" talk about a hideously obvious statement. If you have an unsustainable debt burden and you add any loan to it, it will naturally become more unsustainable. "Credit must be affordable" credit is affordable, that is, unless you are a deadbeat that doesn't pay your bills or someone who is trying to live a champagne lifestyle on a beer budget. Better solution, teach people about spending less than they make!"

Related: High-cost bank loans a step in the wrong direction
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Another reader responds to an argument that small-dollar bank loans are still too costly for many customers:

"'The most efficient and effective way to ensure affordability is through interest rate caps of no higher than 36%.' That sounds so simple a solution, who could argue against it? Unfortunately, history does. Artificially capped interest rates upset the risk/reward equation, which leads to a market place reaction of unintended consequences such as an actual contraction of acccess to credit rather than an expansion."

Related: High-cost bank loans a step in the wrong direction
Joseph Otting
Joseph Otting, comptroller of the U.S. currency, speaks after being sworn-in during a ceremony at the U.S. Treasury in Washington, D.C., U.S., on Monday, Nov. 27, 2017. Otting, a former OneWest Bank Group chief executive officer, won Senate approval this month to lead a key U.S. bank regulator, further clearing the way for the Trump administration to roll back Wall Street regulations. Photographer: Andrew Harrer/Bloomberg
Andrew Harrer/Bloomberg
On an argument that the Office of the Comptroller of the Currency's potential changes to the Community Reinvestment Act could make it harder, not easier, for some groups to obtain loans:

"I've been doing CRA for 30 years and we should welcome the opportunity to refine the CRA evaluation process. It's too subjective as one examiner may consider a CRA investment innovative while another examiner considers it uneventful. The law isn't the problem; it's the paperwork burden and subjectivity in the exam process that's created the problem we're dealing with today."

Related: OCC should improve CRA, not gut it
Victoria Finkle
BankThink Editor , American Banker
CRA CFPB
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