'Financial Engineering for No Purpose': Comments of the Week
June 6, 2014 7:30 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 and from our social media platforms.
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On the enduring appeal of cash in the digital age:
"Cash also gives consumers real-time settlement. When I give you cash it's yours to spend immediately. But when I pay you with a card or ACH that could take several days for the money to come into your account. In our increasingly real-time world, consumers will increasingly expect payments to settle in real-time."
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On the reason some bankers take on too much risk, endangering the stability of the financial system:
"The value placed on money itself is the root problem."
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On a lawsuit filed by the city of Los Angeles accusing JPMorgan Chase of discriminatory mortgage lending practices:
"Once again, it is local authorities holding the Too Big To Behave banks accountable for anti-consumer lending practices while federal bank regulators continue to turn a blind eye to such nefarious activities - just as they did in the run-up to the financial crisis."
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(Image: Bloomberg News)
On a proposal to give banks a tax credit for charged-off consumer debt and donate the debt to non-profits that help borrowers work out feasible repayment plans:
"I am one person that can't get behind this. I agree that the bank stockholders will benefit as will the consumer. I don't know why all Americans (through the tax system) should pay the price for bad debt."
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On Capital One's decision to ditch coin-counting kiosks:
"Hope more mega-banks follow this trend. Community bankers need this type of help to remind consumers who really cares about their needs, and who does not."
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(Image: Bloomberg News)
On the strategic benefits of encouraging face-to-face interactions:
"Having lollipops for kids wasn't just something cute and anachronistic. It was to encourage parents and grandparents to bring kids in so that bankers could see how many there were, what their ages were and offer products that responded to those circumstances."
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On the news that a Minnesota bank's holding company was forced into involuntary bankruptcy by holders of its trust-preferred securities:
"Maybe no one cares about holding companies? The bank will be just fine, and the shareholders of the holding companies took the big risk so they get to eat the big loss. This is just the natural consequence of financial engineering for no purpose, and losses are to be expected."
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On the Consumer Financial Protection Bureau's dilemma over whether and when to regulate auto title lending:
"Rather than trying to plug the various leaks in the dam, perhaps more focus should be placed on WHY consumers need/demand this type of credit product. It goes back to a lack of sustainable jobs and little to no financial education." (Pictured: CFPB Director Richard Cordray)
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(Image: Bloomberg News)
On the dwindling importance of customer service as more people transition to digital banking:
"As the branch employee interactions decrease for basic banking functions related to deposit accounts, product becomes more important than ever, especially checking-related mobile and online banking. One banker expressed it as the front door of the branch is now the mobile phone and tablet screen."
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On potential new uses for Bank of America branches as the company sells off hundreds of locations (via <a href="https://twitter.com/leimer/status/474419083341860864" target="_blank">Twitter</a>):
"It's just getting started
I wish they could all becomes libraries but community media/meeting centers and incubators are nice."
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