Comments of the Week: Aug. 27 - 31

August 31, 2012 12:35 PM

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On the CFPB's plans for an Internet chat room:

"Let's hope that the CFPB [Consumer Financial Protection Bureau] is merely showboating [its] hipness...The notion of a financial product marketplace regulated based on chat room chatter is a real gut-churner."

Pictured: Richard Cordray, director of the Consumer Financial Protection Bureau

(Image: Bloomberg News)

On Mitt Romney's muddled Dodd-Frank message:

"If my choice is between the guy who actually signed this damaging legislation into law and a guy whose message the American Banker deems 'muddled,' I say 'muddle away.' How about focusing on the ones who actually did the damage?"

Related Article: Romney's Muddled Message on Dodd-Frank

(Image: Bloomberg News)

On Mitt Romney's muddled Dodd-Frank message:

"Dodd-Frank, even if it is altered, is needed to control an out of control industry. Banking seems so staid that no one has looked behind the curtains for years…It's an ugly greedy world where profit is king. If it's isolated from the rest of the economy, no one cares. If it puts me out of work, I care."

Related Article: Romney's Muddled Message on Dodd-Frank

Pictured: House Representative Barney Frank and Chris Dodd

(Image: Bloomberg News)

On Treasury's claim that Dodd-Frank aids small banks:

"Only a Washington bureaucrat could conclude that hundreds of new and onerous financial regulations layered on top of existing ones would be helpful to small banks. Dodd-Frank and its horrible stepchild, the CFPB, continue to cause mayhem in the financial community with uncertainty, lost manpower and increased cost of compliance."

Pictured: U.S. Treasury Secretary Timothy F. Geithner

(Image: Bloomberg News)

On Treasury's claim that Dodd-Frank aids small banks:

"Strengthening of the TBTF [too big to fail] status of big banks, and the continuation of the TAG [transaction account guarantee] program, which also heavily subsidizes small banks, has introduced so much moral hazard into the system that it is hard to accept the claim that we have made it safer or more rational."

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On Treasury's claim that Dodd-Frank aids small banks:

"3 words ... out of touch! I would readily invite any official to visit a community bank outside of the beltway to see if the bank agrees. There are 7,000 of them - take your pick."

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On what caused the housing crash:

"The root cause…was the bankers' belief that no matter what risks they took they would be bailed out when things went wrong. All the rest of the factors are just window dressing."

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On investigations into force-placed insurance:

"Remember the term Force-Placed Insurance, as it is the leading cause of foreclosures since 1994. False placement of illegally and artificially inflated premiums has been proven to create a negative escrow account, which leads to increased mortgage payments, blocked tax payments, and denial of a loan modification."

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On a proposal to combine Fannie Mae and Freddie Mac:

"Combining would be great, but why not remove them from receivership, capitalize under the free market and remove the government guarantee that is costing taxpayers billions? … These two groups in buying up most of the mortgages today are potentially setting themselves up for more failure down the road. What's the definition of insanity again?"

Pictured: Fannie Mae

(Image: Bloomberg News)

On a proposal to combine Fannie Mae and Freddie Mac:

"If you strip the residential operations from both, merge them into a liquidating trust, disband FHFA [Federal Housing Finance Agency] & resell the remaining entities to the public, you'll get the best outcome for the taxpayer."

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On servicers' $10.6 billion in homeowner relief under a national settlement:

"$10.6 billion spent on around 138,000 borrowers? I realize the numbers may not be exact due to the 'credit' system used in the settlement agreement, but roughly extrapolating from that, one can safely assume that when all is said and done, the $25 billion settlement obtained by 49 state Attorneys General will directly benefit less than 1% of all borrowers."

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On the FDIC's latest quarterly banking report:

"The low rates that are squeezing earnings are largely responsible for the improved portfolio performance that has produced lower provisions."

On the SEC's failed bid to reform money market funds:

"The problem seems to be the public perception that [money market funds] are too big to fail. The regulatory proposals seem to have trouble avoiding reinforcing the basic problem without destroying the instrument."

Pictured: Securities and Exchange Commission Chairman Mary Schapiro

(Image: Bloomberg News)

On the implications of M&T's bid for Hudson City:

"With the arbitrage opportunity for excess funds gone, banks will have to look at other asset categories, other fee income plays or a merger with someone where duplication of overhead expenses is significant."

On how shrinking banks hurts the economy:

"Capital has to go to work before people can go to work. The constraints on the banking system are restricting investment and lending, as [is] the triple whammy of high and increasing regulation; high and increasing taxes; and the unknown costs of the new healthcare mandate."

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On how shrinking banks hurts the economy:

"Banks have long since come to rely on the government as their source of capital, and having to fill that chronic hole is indeed a drag on the economy."

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On what bankers can learn from Bitcoin:

"Banking could be just like bitcoin, if it wasn't for all of those pesky government regulations that are soooo expensive."

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On what bankers can learn from Bitcoin:

"Sounds like they are taking advantage of avoiding the costs that banks pay for AML/BSA [anti-money laundering/Bank Secrecy Act] compliance and maintaining the security, reliability, and integrity of the payments system. I wonder whether it will outlive the online P2P lending services available on the Internet that work well until they don't."

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On offering a bank's best terms to all qualified customers:

"Customers add different value to a bank and the price should reflect the value of the relationship. Someone who buys a mortgage and nothing else adds only the value of that single transaction (especially if the risk is sold to a GSE). So what are the 'best terms'? Aren't they relative to the customer's interest in either being a customer or purchasing a product?"

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