No More Mr. Nice Guys: As New York's top financial watchdog Benjamin Lawsky prepares to leave the government to launch his own firm, speculation is rampant about whether his successor will take a similarly aggressive approach to reining in Wall Street. The Clutch Group's Brandon Daniels argues that the next "sheriff of Wall Street" could stand to benefit from warmer relations with the financial industry. "A better working relationship with the financial services industry could help the new sheriff improve information-sharing and deliver more informed rulemakings," he writes. But the comments section proved to dominated by fans of Lawsky's hardboiled tactics. "In financial matters, adversarial regulation is good regulation," wrote "djmerkel." "Given the evidence of the Great Crash, brought on by collaborative regulation, why is more collaboration with Wall Street thugs a plausible route to protecting the rest of us?" asked Ed Walker. "The last thing the U.S. needs is another 'nice' bank regulator," added Jim Wells.
Where Credit Is Due: Using alternative data to score people without credit histories is a hot topic these days, but consumer lawyer Chi Chi Wu says there are drawbacks to this idea. For example, including consumers' monthly gas and electric payments in credit reports could wind up penalizing people who aren't seriously delinquent and just need a little extra time to scrounge up cash for spikes in their bills. Wu suggests that a better approach might be to consider the fairness of credit scores altogether. "Credit scoring is a reflection of the racial economic divide in this country," she writes. But many commenters took issue with Wu's argument, particularly her suggestion that alternative data that includes payday loans and subprime credit could have a negative impact on Americans' credit scores. "Most borrowers start as subprime or no score (invisible) and only improve their scores by successfully paying their credit obligations," wrote BankerJoe. Greg Rable, head of consumer data provider FactorTrust, objected to the implication that alternative data should only be included in credit scores if it will improve borrowers' standings. "If bad behavior is excluded, a lender cannot accurately assess a consumer's ability to repay," he wrote.
Also on the blog: Barclays' stern response to a tongue-in-cheek email sent by a former employee was a misfire, according to communications expert Scott Sunshine. He says the bank had a golden opportunity to show the world it has a sense of humor and play along with the joke.
Basel III could put community banks in a tough spot when it comes to trust-preferred securities, according to the American Bankers Association's Hugh Carney.
The Mortgage Bankers Association's Michael Fratantoni argued that more private-sector competition in the secondary mortgage market would increase service standards and product development.
Mortgage lenders need to start offering more support to the operations staff who will bear much of the responsibility for implementing new disclosure rules, according to Stratmor Group's Garth Graham.
PaymentsSource reporter Evan Schuman argued that Apple Pay is opting for convenience over security in the short term and that it's the right call.
Bank advisor L.T. "Tom" Hall discussed the community bank leaders that have made the biggest impressions on him over the years and the qualities that made them memorable.
Calling All Bookworms: With the onset of beach book season, it's almost for American Banker's annual summer reading list. Send your recommended reads bank-related and otherwise to sarah.todd@sourcemedia, including the name of the book, the author, and why you think it's worth checking out. All submissions are due by Tuesday, June 16.
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