VolckerThink: Pamela Martin of KPMG pointed out that the Federal Reserve's new market risk capital rule further complicates Volcker Rule compliance. Good thing Carlos Pereira and Thadi Murali of Capco predict more changes are in the works for the Dodd-Frank provision. And Wayne Abernathy of the American Bankers Association put a positive spin on Volcker's ups and downs by arguing that the controversy over the provision's original plan to treat investments in trust-preferred securities provides some valuable lessons for how bankers should talk to regulators. "Clear arguments presented calmly, firmly, but with equanimity are heard better than expressions of outrage, however justified that may be," he writes. A few readers championed Abernathy's assessment. "Your suggestion that bankers engage persistently but reasonably is absolutely good advice," one commented.
Postal Banking Still Polarizing: BankThink Deputy Editor Jeanine Skowronski incurred some populist wrath when she suggested the U.S. Postal Service's terrible customer service was a reason it should stay out of banking. "As if private banks are any better," one reader commented. Another added: "If there were a centralized place for consumer complaints about banking practices, it would be far longer than that for U.S. Postal Service per person." But new BankThink contributor Carl Packman equally incited bankers when he suggested a full-fledged postal bank would benefit the economy. "Redirecting the $7.4 billion spent annually by the 12 million Americans who take out payday loans would certainly help the nation's gross domestic product," Packman wrote. But many readers thought revamping the short-term credit space was far from simple. "A few credit unions tried to enter this market and found they had to charge rates close to the payday lenders to break even," one reader commented. "This idea should go no further until the Post Office can produce credible pro formas showing what it would have to charge to break even on these loans. I suspect Sen. Warren would not be happy about the results of that analysis." Another reader added: "Just because [the U.S. Postal Service] has a large geographic footprint does not make the economics of lending any different."
Around the Blog: Consultant Andrew Waxman urged global banks to make privacy a priority, while Don Childears of the Colorado Bankers Association suggested only Congress could resolve banks' concerns over serving legal pot dealers.
Got an informed opinion on the business of banking? Submit to BankThink. Full submissions guidelines are available here.