Slideshow 'A Totally False Agenda': Comments of the Week

  • November 18 2016, 7:30am EST

American Banker readers share their views on the most pressing banking topics of the week. Comments are excerpted from reader response sections of articles and our social media platforms.

On payment speed being less important than payment security:

"We live under a totally false agenda. We're not getting what we should be getting from our financial providers —namely, the feeling of financial security. Payment improvement is a non-starter. They're fine. And they were fine long ago. Who needs to pay rent or apply for a mortgage instantly or P2P? Large services that 'make it faster and cheaper' worsen the summary of risk/return for an end-user. Their costs reductions are illusory."

Related Article: Payments Disruption: You Ain't Seen Nothing Yet

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On incentive structures driving unethical business practices — not just Wells Fargo's recent scandal:

"The problem at Wells Fargo and potentially other banks lies not in the incentive comp paid to employees for sourcing new customers and meeting their needs, but rather in the development and implementation of broad and sometimes arbitrary scorecards that require bank employees to meet minimum monthly or quarterly sales quotas on products that customers may not actually want. By continuing to incorrectly focus on the carrot (incentive comp), the banking industry risks an exodus of top talent, while the underlying problem, the stick, continues to drive bad behavior."

Related Article: Banking's Ethics Problems Run Much Deeper than Wells Fargo

On bank CEOs needing to accept the sometimes bitter realities of their changing businesses:

"Brutal honesty should be the hall mark of any organization and its executives and employees — but alas it is something that has been missing all around and the organizational culture remains toxic — it has led to the death of many organizations."

Related Article: 'My Bank Will Survive' and Other Delusions

On whether President-elect Donald Trump, as he called for during the campaign, will actually restore Glass-Steagall:

"These megabanks aren't just a 'systemic threat' to our economy. Through their enormous wealth, and because of the ruthlessness with which they're willing to wield their influence, they are also a systemic threat to democracy itself. It can be seen in Wall Street political contributions which flow to powerful and familiar names, Republican or Democratic. Banks have acquired too much power."

Related Article: Trump Is Unlikely to Bring Back Glass-Steagall

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On Sen. Elizabeth Warren warning Democrats not to yield to GOP efforts to restructure the Consumer Financial Protection Bureau:

"The structure of CFPB leadership indeed poses a challenging dilemma for the Democrats, particularly if Mr. Cordray is forced out: then it will be a case of 'be careful what you wish for' (in this case, arranged for — a single-director structure). At the same time, though, recall the populist tone of the Wells Fargo hearings — those senators and representatives, regardless of party affiliation, did not appear eager to placate industry interests. Trump, meanwhile, has positioned himself as a populist, so the jury is still out regarding whom he might appoint as head of the CFPB if he had the chance. Don't assume it would automatically be someone especially friendly to the industry."

Related Article: Future of CFPB in Play as Warren Digs In

Suggesting that weakening the CFPB would help smaller banks compete:

"Now the little guys are afraid to lend under CFPB regs and many don't have the resources to even try to keep up with the new technology and processes required for the new Closing Disclosure. Guess who that leaves? Big banks."

Related Article: Future of CFPB in Play as Warren Digs In

On a group of online consumer loans souring more quickly than lenders and bond underwriters expected:

"Innovative and efficient origination of bad loans."

Related Article: Consumer Loans Souring Fast in Bonds Tied to Online Lenders