'Federal Regulators Are Too Easy to Co-Opt': Comments of the Week
September 13, 2013 10:08 AM
American Banker readers share their views on the most pressing banking topics of the week. As excerpted from the comments sections of AmericanBanker.com articles.
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On a suggestion that bank IT managers ask vendors what they know about security "backdoors" secretly installed by the National Security Agency:
"I'm sure the equipment vendors are just begging for someone to ask them these questions so they can freely discuss anything they may or may have done at the request of the NSA. While you are at it, check with your internet service provider with the same questions." (Pictured: Gen. Keith Alexander, the director of the NSA)
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Image: Bloomberg News
Arguing that banks should be regulated only at the state level:
"Federal regulators are too easy to co-opt."
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On the Dodd-Frank Act's intrusiveness:
"If the Volcker Rule is not the soul of government planning and heavy-handed government direction of private investment, then nothing is."
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On the danger of legal challenges to foreclosures under the Consumer Financial Protection Bureau's ability-to-pay rule:
"The CFPB has underestimated the litigious nature of hungry attorneys."
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Image: Bloomberg News
On big banks being spared from criminal prosecutions:
"Personal and corporate prosecutions are absolutely necessary to stop this behavior. So far the only bright spot is the $100K these institutions have paid their lawyers to avoid culpability."
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On calls to prosecute big banks:
"It
seems unfair to talk about criminal prosecution when the real problem is that we have such a maze of arbitrary, capricious, politicized and corrupt regulations."
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On big banks being spared from criminal prosecutions:
"If the civil penalty against their institution is large enough and the increased regulatory oversight is onerous enough, I think you would start to see the boards much more willing to rid themselves of the guilty executives."
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On big banks protesting a Federal Deposit Insurance Corp. rule clarifying that foreign-branch deposits are not FDIC-insured:
"Is there no limit to what liabilities giant banks will ask the safety net to support?
U.S. taxpayers already provide implicit guarantees to foreign-branch depositors. Why do banks need to extract explicit guarantees as well? Answer: Because they think they can."
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On a suggestion that banks make it harder to withdraw CDs early:
"When a consumer grants a bank the privilege of their patronage, the consumer becomes a victim of the bank's profit model."
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On a suggestion that banks make it harder to withdraw CDs early:
"A rational customer would be expected to be less inclined to purchase a CD from an institution that is perceived to penalize her for doing business with the institution, and perhaps less inclined to do business with the institution at all."
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On the risks and benefits of penalizing customers for withdrawing CDs early:
"It's never black or white
This one could go either way depending on the severity of the penalties and the specific need of the bank based on their asset liability modeling."
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Image: Thinkstock
On retailers passing the cost of accepting debit cards to consumers:
"Interchange fees cost the poor billions of dollars a year in higher prices for a service they do not or cannot use. The obvious solution to this problem is to require retailers to add interchange cost to the bottom of the receipt the same way we add sales tax."
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