Comments of the Week
May 4, 2012 12:50 PM
On moral hazard and principal reductions:
"Opposing principal write downs at this time underscores how out of touch some folks are with what's actually happening to homeowners today. The sub-primers, flippers, no-doc borrowers, etc., washed out years ago…Those remaining are a cross section of Americana today. …Those opposed to principal reductions today have never walked a mile in the other guy's shoes." (Image: ThinkStock)
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On delays in implementing Dodd-Frank:
"Debates over issues like Basel III, Volcker Rule and living wills are all diversions in which bank lobbyists seek to exhaust reformers from making any changes that might restrict the mega-banks' ability to pillage the global financial markets."(Image: ThinkStock)
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On whether the Durbin Amendment has helped consumers:
"Anyone who knows a thing about retailing knows most retailers have no choice: They must pass savings along in the form of lower prices or get crushed by the competition." (Image: ThinkStock)
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On B of A's core systems conversion in California:
"That is amazing! It certainly did not take that much effort — over 10 years worth — to accomplish. There must have been many 'holds' placed on the project for both valid and not-so-valid business reasons. But those second and third kick-offs of a project can be more difficult than the first. (Image: ThinkStock)
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On Costco partnering with mortgage lenders:
"Remember Dean Witter in Sears? Not good. Same thing here. In this case the lenders will have to cut fees and margins to the bone, and then pay the house some of the top line. No thanks!" (Image: Bloomberg News)
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On big-bank officials meeting with Federal Reserve Governor Daniel Tarullo:
"The entire Wall Street spin on financial reform has been nothing but a cover to protect the cushy deal these oligarchs have had for years."
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On big-bank officials meeting with Federal Reserve Governor Daniel Tarullo:
"Let me get this straight: If all they talk about is bank supervision then secrecy is OK; but if they talk about regulation, then the Fed's transparency conscience kicks in? This makes no sense. The whole point of stress tests is to restore confidence. How can you do that with this cloak-and-dagger approach?" (Image: ThinkStock)
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On big-bank officials meeting with Federal Reserve Governor Daniel Tarullo:
"I would play massive hardball with them and force them to write off these indebted 'customers' 'assets' on their books, send us 1099s for the principal forgiven and let us deadbeats pay the IRS directly. Then we'll see if they got the right capital structure. Stop the nonsense stress tests." (Image: ThinkStock)
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On 'deadbeat' consumers:
"Mr. Kahr points to the need to look at the very provable problem of predatory borrowers, who borrow money with the intent (either at loan originiation or later) of not paying it back. He also points to who picks up most of the tab of the predatory borrowers." (Image: ThinkStock)
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On the deals for American Perspective Bank:
"[I] don't want to hear anything from bankers about how credit unions control the Santa Maria-San Luis Obispo marketplace when community bankers sold their franchises to out-of-town banks and the CUs moved up on the largest financial institutions in the area as a result." (Image: ThinkStock)
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On attracting the best tech minds to banking:
"I would say that bank tech can be cool, but in some cases it should not be. … From the back office perspective, yes, many banks are lacking when it comes to the 'cool' technologies, but they really need to be focused on the basic blocking and tackling functions of banking. And those require extremely secure and reliable systems which are based on fundamental technologies that just work." (Image: ThinkStock)
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On whether big banks should be broken up:
"One word: Europe. U.S. taxpayers cannot be held hostage by our largest financial institutions, as has happened across the Atlantic. Just as too much algae on a pond is bad for its overall ecosystem, financial institutions that are too big to fail are a fundamental threat to the financial and economic 'ecosystems' of our nation." (Image: ThinkStock)
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On the CFPB collecting data regarding banking staff diversity:
"Successful companies learned a long time ago to nurture and promote talent regardless of race, ethnicity, sex, etc. Successful companies mirror their communities and customer bases — and if they don't, the marketplace votes with [its] feet, and they go out of business." (Image: ThinkStock)
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On banks embracing social media:
"You must have an appreciation for the hesitation of an industry that is continually bashed over compliance." (Image: ThinkStock)
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On loan decisions based on big data and machine learning:
"The subprime lending of the past decade applied PhDs and their models with a vengence. They were all wrong. The PhDs should have been paid in residual interests of subprime securitizations." (Image: ThinkStock)
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On loan decisions based on big data and machine learning:
"Perhaps, Household Finance had over 100 PhD quants. HSBC bought the theory that [its] models had the risks well defined. Ooops got that really wrong. Data is retrospective. The best lenders use data and gut instinct." (Image: ThinkStock)
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On loan decisions based on big data and machine learning:
"Good banking in the end, like a good baseball manager, requires good information, good data, but it can never get away from good judgment. And in the end, it still seems that the ones with good judgment have the competitive edge." (Image: Bloomberg News)
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On ZestCash's emergency loan decision-making model:
"Regulators should realize consumers need and demand these products. The best strategy is to embrace the product, allow technology to emerge and drive lender costs down resulting in lower fees to consumers. You cannot legislate demand for payday loan types of products and services out of the marketplace." (Image: Bloomberg News)
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On community banks courting the affluent:
"Wealth management is an extremely broad term, which encompasses lending, trust services, investment management services, and brokerage services, and, I'm sure, more. A common thread tends to be 'high touch' customer relations, which translates to higher costs. If institutions are hesitant to charge 'fair' fees, they're not going last." (Image: ThinkStock)
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