Dimon vs. the Little Guys: Independent Community Bankers of America president and chief executive Camden Fine came out swinging at JPMorgan Chase chief Jamie Dimon, who angered community bankers this week by suggesting that small banks can be riskier in some ways than big ones. Fine faults Dimon's claim that many big banks fared just fine during the crisis as smaller banks failed: "Had big banks been allowed to fail like smaller institutions [during the financial crisis], they would have decimated the FDIC deposit insurance fund many times over." Fine's defense of community banks struck a chord with American Banker readers. "Ditto," wrote Chris Whalen of Kroll Bond Rating Agency on Twitter. "Little banks are [the] only source of credit for U.S." Speaking of the small fry: As Congress considers ways to lift the regulatory burden on community banks, it should remember to take the interests of smaller nonbank mortgage lenders into account, wrote Community Mortgage Lenders of America chair Paulina McGrath.
Pot, Meet Kettle: If banks are so worried about complex regulatory structure, why don't they have the same reservations about their own business models? Federal Deposit Insurance Corp. vice chairman Thomas Hoenig argues that rather than listen to bankers' calls for simplified regulation, agencies can make the financial system safer by introducing more transparency into the regulatory process, hiring experienced supervisors and emphasizing annual full-scope bank examinations. He also suggests that banks take a look in the mirror and focus on reducing risk and complexity in their own structures. Down in the comments section, American Bankers Association's Wayne Abernathy agreed with Hoenig's call for higher-quality supervisors and more transparency but continued beating the drums on regulatory complexity, which he said "undermines the effectiveness of regulation and achievement of the goals of the regulation."
Also on the blog: Why aren't more banks appealing regulators' examination findings? Maybe they're afraid that supervisors will seek vengeance, suggests former regulator and FinPro executive vice president Scott Polakoff.
The Cato Institute's Thaya Brook Knight rose to the defense of the SEC's much-criticized "bad actor" waivers, arguing that the waivers provide the agency with a necessary correction to punishments that are intentionally broad.
Mobile devices may be the future of banking, but laptops are its present, according to Millward Brown Digital's Ananda Jaakson and Jennifer Canfield.
Banks can bruised by sleek tech startups, but the traditional financial services industry won't be dislodged by them, writes banking expert Chris Skinner. "My view is that saying some geek in a bedroom can create the Uber of banking is like saying that some nerd in a garage can create the next Pfizer," he writes. "It is highly unlikely to happen, as the incumbent will have the time to adapt."
Many millennials have struggled to find sufficient work and deal with student loan debt in the years since the financial crisis, which makes them less lucrative than other bank customers. But ACI Worldwide's Mark Ranta says that there are profits to be found in serving the younger generation particularly if banks offer services that help them keep their debt levels manageable.
Merchants argue that lower debit-card swipe fees would allow them to pass the savings onto consumers. But the ICBA's Fine, in an earlier post, says merchants and consumers actually benefit from banks' interchange revenue, since financial institutions reinvest a portion of the profits into security technology that keeps hackers and thieves at bay.
The Consumer Financial Protection Bureau's proposed reforms to payday lending won't be the death of short-term credit, writes Reinvestment Partners' Adam Rust: "While payday lenders may be forced to adjust their business models, well-meaning ones should be able to operate in this new framework."
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