Slideshow 'A Fury of Stupid': Comments of the Week

Published
  • June 20 2014, 7:30am EDT

American Banker readers share their views on the most pressing banking topics of the week. As excerpted from the comments sections of AmericanBanker.com articles and from our social media platforms.

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On the theory that AIG's securities lending program played a crucial role in the insurer's collapse:

"The securities lending program was a factor, that's true, but the insurance company subs were solvent, due in no small part to state level regulation. We know what the financial sector does when the regulators aren't watching. They invest in a fury of stupid."

Related Article: AIG's Collapse: The Part Nobody Likes to Talk About

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On what politicians should learn from the surprise primary defeat of House majority leader Eric Cantor:

"Cantor's ouster should serve as a warning for incumbents who no longer listen to their constituents. You're there to serve us, not for the sole purpose of getting re-elected and keeping your power."

Related Article: What Cantor's Surprise Ouster Means for Banks

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On New York Attorney General Eric Schneiderman's support for a bill that would bar payroll cards from charging certain kinds of fees and require new disclosures:

"While AG Schneiderman['s] proposal to curb abuses in payroll card programs is certainly welcome, the same rationale should have him target card programs for federal & state income tax refunds, unemployment benefits, social welfare benefits and the like. All of these programs eliminate consumer choice and shift the cost of distributing payments from company and government entities to recipients."

Related Article: New York A.G. Backs Payroll Card Bill

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On federal regulators' delayed response to the living wills submitted by the nation's largest banks eight months ago:

"This is one test, of many, measuring whether regulators have been given more than they can frankly be expected to do."

Related Article: Banks Face Deafening Silence on Wind-Down Plans

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On a lawsuit filed by Mississippi Attorney General Jim Hood charging credit bureau Experian with violating consumer protection laws and knowingly including inaccurate data in Americans' credit files:

"Hard to understand why the CFPB would be launching into new areas such as mobile banking — where there is no evidence that consumers are being hurt — without first addressing the widespread and well-documented errors in credit reports that plague consumers right now."

Related Article: Experian Sued for Alleged Data Errors

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On attempts to distinguish between insolvent and illiquid borrowers in order to lower the costs of payday loans and other forms of small-dollar credit:

"… Nothing can improve upon good underwriting. I watched FICO grow in use and cause a drug-like reliance in lenders. Big data has some value but we need other old school techniques to make this work for people that don't have big data to access."

Related Article: Shifting the Debate on Small-Dollar Credit

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On the inherently political nature of discussions about small-dollar credit:

"… There is no taking the politics out of this subject. Not until our politicians take the responsibility to ensure that our educational system treats personal finances on par (if not above) 'readin', writin' and 'rithematic.'"

Related Article: Shifting the Debate on Small-Dollar Credit

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On an alternative method of credit scoring that would include on-time repayments of payday loans:

"There might be an excellent opportunity for the three large credit bureaus to establish an 'Auxiliary Payday Loan Score' that only reflected whether a borrower had repaid or defaulted on previous payday loans. It could be as simple as the percentage of previous loans repaid on-time, and the total number of such loans."

Related Article: Shifting the Debate on Small-Dollar Credit

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On a controversial research report from Sanford C. Bernstein that suggests regional and midsize banks should shutter hundreds of branches:

"One of the most glaring holes in the research is that there was no consideration taken for CRA/Fair Lending. We can talk stats all day, but the regulators are not going to allow a bank to take this kind of drastic action in what they deem to be low-income markets."

Related Article: Ax How Many Branches? Bankers Say 'No Way!' to Big Cuts

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On how banks that close a lot of branches are perceived by their customers:

"To many commercial clients, banks that have a robust branch network project health and stability, while banks that are constantly downsizing and scrambling to cut costs look desperate and more profit-focused than client-focused— if you were a commercial client, which type of bank would you want to do business with?"

Related Article: Ax How Many Branches? Bankers Say 'No Way!' to Big Cuts

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