'All Tax Refunds Will Be Paid in Bitcoin': Comments of the Week
April 24, 2015 7:30 AM
American Banker readers share their views on the most pressing banking topics of the week. Comments are excerpted from reader response sections of AmericanBanker.com articles and from our social media platforms.
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On Republican presidential candidate Rand Paul's attempt to woo Bitcoin enthusiasts:
"Just for fun, imagine if Rand announced that if he becomes president, all tax refunds will be paid in bitcoin." (via Reddit )
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On whether banks or regulators are to blame for the derisking phenomenon that has limited access to banking services for legal businesses the government perceives as high-risk:
"The agencies' burdensome recordkeeping and documentation requirements have made doing business with certain companies just too costly. Banks have the burden of proof that [their] customers are not doing anything wrong and I can see why many banks just waved the white towel on this burden."
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On whether banks or regulators are to blame for the derisking phenomenon that has limited access to banking services for legal businesses the government perceives as high-risk:
"With record #AML fines, is it any wonder banks de-risk? Banks are not the police." (via Twitter )
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On former Federal Reserve chair Paul Volcker's proposal to consolidate regulatory agencies and strengthen the Federal Reserve's power:
"Imagine how the U.S. banking system would look today had we enjoyed a regulatory monopoly led by the Federal Reserve Board prior to 2008. Only the fact of regulatory competition between the Fed and FDIC led to the retention of the leverage ratio test for capital and thereby saved the U.S. banking system."
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On an alternative way to reform the regulatory restructure:
"The United States would be better served by reducing the number of regional Federal Reserve banks to six, with service areas relatively equal in population and each having a permanent seat on the open market committee. One advantage of such a reorganization would be an enhanced understanding by the open market committee: of foreign trade from a West Coast bank, energy from a Southwest bank, agricultural production from a central U.S. bank, manufacturing and automotive production from a Midwest bank, defense, tourism and retirement industry from a Southeast bank in addition to the current Northeast/Wall Street focus."
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On the relative safety of Bitcoin transactions compared to other payment methods:
"Just as the security measures in physical money have improved over time (watermarks, UV embedded thread etc.), I know the security in Bitcoin will also evolve but for now, use with caution."
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On how the actions of regulators, banks and legislators combine to create more risk in the banking system:
"It's true; too big to fail, too big to manage, too big to regulate, all create a feedback loop. Big banks become bigger as they add staff to deal with complex regulations. Regulators struggle to grasp the incredible complexity and scope of these behemoth institutions. Legislators then add even more complex regulations to try and keep a handle on the banks. And repeat."
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On United Community Bancshares' plan to hold off on future acquisitions after reaching $9.5 billion in assets:
"Another example of how the arbitrary regulatory 'bright line' of $10 billion creates a change in business model for a community bank. How many $9.5 billion community banks will we have in a year or two if this community bank definition isn't changed?"
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On whether mobile apps that allow customers to keep better tabs on their checking account balances will mean the end of overdraft fees:
"Yes, better technology may make it possible for people to avoid overdraft 'mistakes.' But that assumes that the vast majority of [non-sufficient funds] fees are from people who are forgetful or bad with math. This is simply not the case. Most folks being charged NSF fees know full well what they are doing and what the cost is. It's a choice."
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On how financial technology startups will alter the traditional banking system:
"Disruption will occur in the banking industry. Organizations that fail to adapt will be left behind. But in a business where 50% of the households still don't feel comfortable depositing a check in an ATM and 75% haven't used mobile deposit capture, the change in consumer behavior may be slower than some believe."
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