Sound-Culture Shortcut: A simple question lies at the heart of ethical bank culture, according to BankThink contributors Robert Sloan and Dr. Leo Flanagan: "When weighing a dilemma, employees need only ask themselves if the action they are taking is right for the customer." This is a simple way to give employeess guidelines that help them remain compliant with regulations while imbuing them with a sense of purpose, the authors write, holding up Huntington National Bank and BlackRock as champions of this approach. Commenter Gary Lewis Evans wrote that he too encourages staff to follow the golden rule: "Be honest and fair and treat people the way you would like to be treated." But reader "CPlace" took issue with the authors' suggestion that regulators are focusing too much on compliance instead of culture: "That's like complaining that the cops are looking for criminals instead of preaching sermons."
Regulation Galore: The Consumer Financial Protection Bureau should pare down data-reporting requirements for community banks under the Home Mortgage Disclosure Act, according to Jack Hartings, chairman of the Independent Community Bankers of America and president and chief executive of Peoples Bank Co. in Coldwater, Ohio. He warned that a slew of new requirements would be too costly for banks already stretched thin by recent regulations. Reader "Mandykatie2" was on Hartings' side but doubted the CFPB was listening: "Banking used to be about helping people obtain their home and trying to protect the place you work for also, but now all it is is trying to make sure you have the fifty pieces of papers signed and in the file."
Merger Machinations: Consultant Jeffrey Marsico put on his detective cap and attempted to root out Square 1's motivations for selling to PacWest Bancorp. The startup bank had identified a profitable niche, he writes, but institutional investors may have been pressuring it to lock in stock-price gains. Meanwhile, two advocacy groups want regulators to investigate whether OneWest Bank tried to win support for its proposed merger with CIT Group with charitable donations. That's a bad idea, according to Pastor Mark Whitlock and Gilbert Vasquez of the National Diversity Coalition. They argue that nonprofits depend on banks' contributions, and that banks might be less inclined to make such donations if more regulatory hurdles are put in place. The idea's proponents responded that they stand by their calls for an inquiry and further proposed that the banks develop public benchmarks by which their Community Reinvestment Act activities can be measured.
Also on the blog: Bethan Cowper says the U.S. should take some inspiration from cutting-edge programs around the globe that aim to help people in poor and rural areas gain access to financial services. Nigeria has rolled out new electronic national identity cards that double as prepaid cards, while India is attempting to attract more banking customers by offering accountholders free life and accident insurance.
The Federal Reserve has capped the swipe fees that banks can charge merchants at roughly a quarter a far too generous ceiling, according to Lyle Beckwith of the National Association of Convenience Stores. He says the Fed should ensure that the fees are more in line with the costs of processing debit and credit card transactions. One community banker was skeptical of this argument, writing on Twitter: "What bank's debit card costs haven't increased?"
When banks face a social media backlash over branch closings, their best course of action is to address community concerns head-on, writes Kevin Tynan, a marketing executive at Liberty Bank in Chicago.
Former Federal Deposit Insurance Corp. director Joseph Neely made the case for a two-tiered deposit insurance fund, arguing that this would spare small banks from subsidizing the risky activities of their mega-competitors.