'The Last Real Money Likely to Stay in U.S.': Comments of the Week
May 16, 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 debate over whether mutual funds should be branded as systemically important financial institutions:
"Part of me believes that mutual funds should not be declared SIFIs. Another more Machiavellian part of me wants the FSOC to name mutual funds as SIFIs because that is exactly the type of issue that could change the politics in Washington (senior citizens and baby-boomers unite!) and possibly bring about a significant change to the policy in the Dodd-Frank Act. " (Pictured: portrait of Niccolò Machiavelli)
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On an alternative way to evaluate the risk posed by banks' vendor relationships:
"Community banks lack the technical expertise and time to [evaluate vendor risk]
. What might be more helpful is for the regulators to give large vendors a pass/fail examination, with results readily available to community banks. "
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On whether mutual funds could threaten financial stability:
"Of course mutual funds, particularly money market funds, pose a dramatic threat to the financial system. Most MMFs are short term lenders to banks. All mutual funds park a large amount of short-term cash in repos. A run on one or more would dry up liquidity in the entire financial sector."
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On Florida's renewed appeal for deal-hungry banks:
"Why would they not come to Florida? The last real money likely to remain in America resides in the baby boomers now streaming there."
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On New York Attorney General Eric Schneiderman's debt-collection crackdown:
"While the CFPB is still taking bows for success in its first two criminal cases against a debt settlement company referred to U.S. prosecutors, the N.Y. Attorney General is pursuing legal actions against some of the largest firms. Would that the Bureau were more focused on enforcing regulations than generating headlines."
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On SunTrust's refusal to partake in a self-regulating organization's inquiry into its online advertising practices:
"I'm gonna form a self-regulating organization to load up the self-regulatory bodies with self-regulating suggestions to give them something to do with their days and leave people with actual jobs alone to do theirs."
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(Image: Bloomberg News)
On how regulators' new rules on vendor relationships may affect community banks:
"Outsourcing and vendor relationships are very important to community banks for their survival. Impeding or eliminating those relationship or choices will greatly affect the cost and services they receive."
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On why more homeowners are choosing to stick with their current mortgages:
"When a significant slice of the population loses all of their accrued equity, they aren't much interested in signing another mortgage."
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On alternatives to the payday lending model:
"Certainly there is a model for relying on deep-pocketed investors to provide subsidized loans to low-income consumers. But it is hard to consider such an unsustainable model a serious competitor to payday advance companies or even microfinance institutions."
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On the similarities between McDonald's hamburgers and small-dollar credit products:
"If Americans wanted a safer hamburger they wouldn't be lining up three deep at their local McDonalds to get the supersized deal of the day despite the ample warnings about fat content and calorie counts
These products exist because Americans WANT them, and they appreciate the ease and convenience of acquiring the solution to an immediate need, not because they don't have choices or don't understand the cost or risk."
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(Image: Bloomberg News)
On assessing the pros and cons of payday loans:
"What level of people having problems with payday loans would be tolerable when weighed against the convenience and needs served for those who repay the loans?"
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On why banks must monitor salespeople's use of social media:
"Social media is how business is being driven. It's no longer acceptable to say you didn't know about it." (via Twitter )
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