PayThink

The article by Frank J. Diekmann entitled, "Credit Unions? Snobs Who Are Based in Timbuktu" published in the May 21, 2012 edition of the Credit Union Journal raised some excellent points for consideration by credit unions and their trade associations.

True markets are transparent, competitive, regulated and fair. None of these adjectives accurately describes the CDS business.

When the going gets rough, you find out who your friends are. In Jamie Dimon's case, they're legion. He's recently been endorsed by, among others: Spencer Bachus (chairman of the House Committee on Financial Services), Richard Fisher (CEO of the Dallas Fed) and even Brian Moynihan (his competitor).

"I wouldn't want to be buying a foreclosure, then have the title examiner find that a robo-signer had participated in the process," says Massachusetts' register of deeds.

Banks and governments have not been required to account for the way in which, when important firms fall deeper into distress, implicit and explicit taxpayer guarantees absorb much of the markdowns that would otherwise have to occur.

Given the recent developments in Europe, investment managers are wondering when the euro will come crashing down. Challenges are likely to fall upon operations and technology departments within investment management firms. The steps to limit risk should be taken now.

I urge travelers to San Francisco to take a tour and visit some of the many startups, disruptors and success stories in the area.

Directors and officers of banks, already under scrutiny from the regulators and law enforcement agencies traditionally charged with examining their actions, should take heed of a new player on the scene: the Office of the Special Inspector General for the Troubled Asset Relief Program. SIGTARP has already been involved in a number of significant financial institution investigations and appears poised to increase the scope of its activity.

If ratified by the Fed, the new liquidity ratios could constrain lending, at the worst possible time. A proposed capital buffer is theoretically countercyclical, but needs more work.

Ignoring state appraisal laws may subject bank employees or third-party service providers to fines or even criminal penalties. National banks relying on federal preemption for appraisal laws should take another look at that assumption in light of Dodd-Frank.