'The Entire Bay Area Is Basically Jumboland': Comments of the Week

August 21, 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.

On California banks that are betting big on jumbo mortgages (<a href="https://twitter.com/jeffcain415/status/634091069156659200" target="_blank">via Twitter</a>):

"Entire Bay Area is basically jumboland."

On the news that The Clearing House wants payments startups like Square and Venmo to face stricter security requirements (<a href="https://twitter.com/andrewrow/status/634378730865987584" target="_blank">via Twitter</a>):

"This is all sorts of wrong. Stripe & FB have better data practices than most banks for payments data."

On how The Clearing House's lobbying efforts could come back to bite its bank members (<a href="https://twitter.com/andrewrow/status/634378730865987584" target="_blank">via Twitter</a>):

"Careful guys, or startups will lobby for interchange regulation."

On a little-discussed upside of Dodd-Frank Act stress tests:

"My data tells me that lots of smaller banks are actually embracing DFAST. Senior risk managers always wanted to do this kind of risk analytics but never could. Now they have the regulatory mandate."

Describing a subtle way Dodd-Frank's regulatory burden encourages small banks to merge:

"There is a limit to how many able people want to run a small community bank when the perks of leadership have been reduced as they have. And there is simply not enough money in the institutions to pay significant cash compensation, so about all that's left is to try to build it up and sell it and cash in on options. The deferred satisfaction is less appealing these days."

On the debate over whether credit ratings are sufficient as a measure of borrowers' creditworthiness:

"Credit ratings are great for accelerating underwriting and achieving scale. But they're just too blunt. Proof is in the alternative lenders' success in [small business] and commercial lending."

On the question of whether readers are prepared for a dystopian, 'Mad Max'-style world of digital banking:

"Depends, if there is an app that lets me send money and shoot flames from my phone then ABSOLUTELY!"

On a $10 billion Pennsylvania bank's decision to sell to BB&T:

"It is a shame that a long-established, community-supporting institution like Nat Penn had to sell for essentially regulatory purposes. It wasn't an economic windfall, no particular problems at the bank, nor a lack of opportunities for expansion. It was regulatory. So now the business people and entrepreneurs have one less option for borrowing the money they need to expand and create jobs."

Scoffing at claims of innovation by marketplace lenders:

"Marketplace lenders are nothing new. This is subprime lending with an originate-to-sell focus and Internet enablement. Oh, and an arbitrage around state lending laws. This is the Uber of consumer lending I am going to enjoy watching the CFPB chew on the lending platforms for years to come."

On the FHFA's plan to require Fannie Mae and Freddie Mac to purchase manufactured housing loans:

"To paraphrase the immortal Hunter S. Thompson, 'The mobile home business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There's also a negative side.' Leave this business to the people who know how to price it, originate it and service it. Do not allow the GSEs to get involved with a business they have zero experience in."

Agreeing with the claim that the Dodd-Frank Act is destroying community banks (<a href="https://twitter.com/AmerBanker/status/633791007822245888" target="_blank">via Twitter</a>):

"Not only destroying but not allowing for new ones either."

On a law professor's argument that there's nothing to fear about the Consumer Financial Protection Bureau's data gathering because much of the information is already public:

"The good professor underestimates what one can do with public[ly] sourced big data."