Scrutinizing Payday Scrutiny: Bill Isaac, former Federal Deposit Insurance Corp. chairman, scrutinized the regulators scrutinizing online payday lenders. The ongoing crackdown creates more problems than it solves, he argued, since the short-term credit industry is often cash-strapped borrowers' only resort. "The millions of people who use these loans are not irrational," Isaac wrote. "To the borrowers, these loans are less expensive than a series of overdrafts. They are less painful than the consequences of defaulting on an auto loan or a mortgage. They are a better deal than having the electricity and heat turned off only later to pay for having them turned on again." Many readers agreed with Isaac's assessment. "The current conversation is more political than practical," one commenter wrote. "Working families with poor credit need solutions." But others thought the loans only exacerbate the problems they are purported to solve. "Those underbanked will suffer upfront or upfront and down the road (with payday loans)," another reader wrote. "The stress alone is unhealthy. For each dollar they borrow at each paycheck … the bad cycles will just fester."

Anticipating Senate GSE Bill: Looking ahead to the Senate's forthcoming GSE reform bill,Shekar Narasimhan of Beekman Advisors and former Federal Housing Finance Agency director James B. Lockhart urged Congress to make multifamily the starting point for housing reform.  And our Risk Doctor Cliff Rossi outlined how to judge the new bill once it debuted. "Placing a high threshold for when public capital absorbs loss – which would be needed to bring widespread Republican support to the table – is not unreasonable," Rossi wrote. "But if something close to 10% remains in the new plan, then it must clearly establish conditions and the type of market participants that can provide the equivalent of neutral buoyancy for the secondary market."  

Staff Potpourri: National Mortgage News Editor at Large Mark Fogarty explained to readers why he's psyched for the next onslaught of HMDA data. American Banker National Editor Maria Aspan mulled banks' loss of top talent after reading Kevin Roose's new book "Young Money." Reporter Andy Peters wondered why big banks didn't behave more like credit unions following the big Target data breach and Daniel Wolfe, Editor in Chief of PaymentsSource, suggested Target may be a galvanizing for payment data security akin to the Tylenol poisoning crisis of the 1980s. "Before the Target breach, many merchants were apparently willing to delay or ignore the card networks' deadline for adopting EMV and ready to face the consequences. Now, even merchants who remain unsold on EMV as cost-effective security may view incorporating the technology as unavoidable," Wolfe wrote.

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