Injustice for All? Rep. Maxine Waters condemned U.S. prosecutors for perpetuating a two-tiered system of justice in which low-level drug offenders are handed harsh sentences while bankers who commit crimes go free. "The message for the very wealthy and powerful is that they will always be insulated from accountability even as hundreds of thousands of the rank and file suffer the full force of the law for a small fraction of the illegal conduct that multinational companies write off as the cost of doing business," she wrote. Reader "John C" agreed with Waters' criticisms, arguing that bank fines only penalize shareholders and taxpayers. "The tragedy is that if you couldn't buy your way out, you were prosecuted," he adds. Others suggested that Waters had a point but that her response came too late.
Always Be Prepared (for Bank Failures): The Federal Deposit Insurance Corp. wants large banks to keep daily records of the insured and uninsured deposits held by customers with multiple accounts in order to better prepare for potential failed-bank resolutions. There is just one problem, according to consultant Bert Ely: the chances that the FDIC will actually impose losses on a large failed banks' uninsured deposits are slim. While Ely says this renders the recordkeeping requirement pointless, some commenters disagreed. "Djmerkel" argued that while the FDIC rarely imposes losses on uninsured deposits, it is "a good thing to teach institutional investors to watch the solvency of where they invest. Otherwise, we get an FDIC that is more expensive." And reader "Boulder" said that the requirement does not appear all that tedious: "It seems like a pretty simple spreadsheet to me."
Also on the blog: Rep. Keith Ellison argued that using alternative data for credit reports will help put low-income and minority groups on an equal playing field when it comes to finding apartments, employment and affordable credit.
U.S. banks with operations in Europe need to stay abreast of Europe's forthcoming data privacy rules, according to Treliant Risk Advisors' Dan Goldstein.
The Consumer Financial Protection Bureau has proposed overly burdensome rules governing prepaid cards that could drive important players out of the market, writes Brad Fauss, the Network Branded Prepaid Card Association's executive director.
No matter how the competition between banks and marketplace lenders shakes out, consumers will wind up benefiting, according to Stephen Dash, founder and chief executive of online student-loan marketplace Credible. That is because both parties keep pushing each other toward more innovative underwriting models and broader credit access.
Perhaps the reason community banks have so much trouble marketing to millennials is that different people in the younger generation want different things, suggests marketing executive Kevin Tynan. "Demographers and sociologists may like to group consumers," he writes, "but when bankers market to the average instead of the individual, it's a losing strategy."
Mobile payments are a ways away from taking hold in the U.S. and other developed markets. But when they do, they are likely to cut into banks' revenue, according to Intrepid Ventures principal Eric Grover.
Nonbank mortgage lenders have a growing share in government-backed loans, but that is no cause for concern, according to Scott Olson, executive director of the Community Home Lenders Association. He argues that nonbank lenders are well regulated and already comply with financial-soundness requirements.