Do as CFPB Says, Not as CFPB Does: Comments of the Week
June 26, 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 how big data is changing the rules of bank marketing:
"Selling to a market of one is quickly approaching. This is a result of the vast reservoirs of data we have on individuals, from their credit card and PayPal purchases to their social media activities on everything from LinkedIn to Facebook. But unless banks start understanding the importance of big data and its impact on market segmentation, it will either be the likes of B of A, PayPal or an upstart from Silicon Valley that will be serving them in the future."
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Image: Bloomberg News
On how the Consumer Financial Protection Bureau has handled allegations of employee discrimination:
"The Bureau's failure to hold its most senior managers accountable for violating existing employment and whistleblower standards and for fostering a 'toxic' workplace demonstrates that the Bureau's absence of oversight has gone to its head, yielding a corporate mentality of arrogance and self-absorption that overshadow the good that the Bureau has achieved for consumers."
Pictured: CFPB Director Richard Cordray
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Image: Bloomberg News
On whether a Congressional investigation into the CFPB's employment practices has had an impact on the internal workings of the agency:
"'I don't think the CFPB is scared of Congress. They weathered the storm and feel more empowered.' Most troubling quote of the article. Just what we need a MORE empowered CFPB."
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Noting the irony of alleged discrimination against employees at the CFPB, an agency that has pursued bias charges against lenders:
"Do as I say, not as I do."
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Image: iStock
On which woman the Treasury should pick to replace Alexander Hamilton on the $10 bill:
"Let's do both: replace [Andrew] Jackson with [Harriet] Tubman and put Abigail [Adams] on the $10!"
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On a recent Well Fargo television ad featuring a lesbian couple:
"As a long-time customer, but more importantly as a former Wells Fargo banker, I applaud their continued support of the LGBT community. I spent many years hiding who I was while working at a suburban community bank. It was only after I was employed as a commercial loan officer at Wells, could I truly be honest about who I am in all aspects of my life."
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Speculating that socially conservative customers will leave Wells Fargo over an ad featuring a lesbian couple:
"The ad more than likely alienated a larger segment of the bank's client base than [it] generat[ed] sufficient acquisitions to replace the deposit and loan business that left or that they would have potentially."
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Rebutting speculation that Wells' public support of the LGBT community could hurt its reputation with social conservatives and older customers:
"Perhaps in the short term, they did lose a few deposits, but it also likely appealed to millennials and so could be a positive in the longer-term. Also, it probably isn't 'caving' [to alleged pressure from progressives] if Wells Fargo has been open about their acceptance for so long
more like pushing the boundaries a little to reinforce their universal brand value."
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On a proposal from Federal Deposit Insurance Corp. vice chairman Thomas Hoenig to determine banks' level of regulation according to their activities rather than their size:
"There is no doubt that a better definition of community banks than 'less than $10 billion in assets' would be beneficial to bankers and regulators alike. If Mr. Hoenig's plan is part of that redefinition, then it's certainly useful. There is a lot of discussion of changing the $50B asset bright line in the press and even legislature, [but] there isn't much going on around changing the $10B line. There are plenty of community banks changing their business model to stay under $10B or go 'way past' $10B due to this."
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Image: Bloomberg News
On a plan to shift big banks' fundamental obligation to taxpayers rather than shareholders:
"The fundamental remedy is to establish in law that megabank managers owe fiduciary duties directly to taxpayers. The way it is now, managers defend their actions by claiming that they have a formal duty to maximize value for shareholders. But if they are too big to fail, that norm actually entails a duty to steal value from taxpayers. That is the absolutely logical consequence of affirming maximizing shareholder value as the main duty of bank managers."
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On the need for financial institutions to start inventing new products and services in order to catch up with startups:
"Banks and credit unions can no longer ignore the fact that the decades-old deposit paradigm and simple online and mobile banking products are [not] enough to help their customers. This ignorance has helped fuel the billions of dollars being invested by venture capitalists in the fintech industry."
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On Moven chief Brett King's claim that the success of M-Pesa in Kenya is indicative of a broader trend in which fintech startups will surpass traditional banks in popularity (<a href="https://twitter.com/FinTechCynic/status/612994953535442944" target="_blank">via Twitter</a>):
"Not sure a use case in Kenya proves the rule in [North America]
but agree no zero sum game."
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Image: Bloomberg News
On small banks' continued dependence on overdraft fees:
"Banks should get back in the business of lending and treat their depositors as a source of capital, not fees."
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