'This Is Why the Bitcoin Monster Was Born': Comments of the Week
August 9, 2013 10:25 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 the problem with balkanized regulation of money transmitters:
"If each state is allowed to set their own rules, fractured compliance will dissuade new players from entering the fintech space and the consumer will lose."
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On banks hiring former CFPB officials to help them with regulatory compliance:
"This is the typical result of well-meaning, but poorly thought out government policies exacted on the private sector. Legislators were not and are not bankers." (Pictured: Raj Date, CFPB veteran and consultant to banks)
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On a California law that put a hot payments startup on ice:
"Regulators should set high bars for allowing any business to hold funds belonging to other people.
Requiring a money transmitter business to maintain a substantial amount of real capital at all times is hardly unreasonable." (Pictured: Aaron Greenspan, founder of FaceCash)
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On the application of old state licensing laws to new payment businesses:
"The regulatory framework underpinning these novel technologies - money transmission - was largely designed in the late 19th century. Are the money transmission laws still relevant for these new technologies? Are concerns regarding consumer privacy, security and fraud being addressed?"
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On the barriers to entry created by state licensing laws:
"By choking the money transmitting industry for so long time, they managed to push evolution forward. This is basically the reason why the Bitcoin monster was born." (Via Reddit )
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On using size as the sole criteria for designating a bank as systemically important:
"Shorthand, rules of thumb, perhaps even arbitrary categories can sometimes have a place when pressed for time or when details do not matter so much. They do not have a place in trying to identify systemic risk."
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On using size as the sole criteria for designating a bank as a SIFI:
"The real criteria for Congress are simple to understand. The bigger the bank's lobbying expenses and political support, the 'more important' it is and therefore [it] should not be allowed to fail."
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On the benefits of adding mobile chat to banking apps:
"Mobile chat has the potential to be a strong touch point in many ways, but it has to be executed well
If you are in line at a store and your credit or debit card is declined, 'check back later' is not the message a bank would want to send."
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On using annual percentage rates to gauge the cost of a short-term, small-dollar consumer loan:
"APR is not the proper measure of cost for short-term, small consumer loans since the measure basically expresses the interest on an annual basis. The best alternative is to express the cost of the loan for the consumer in terms of X dollars per hundred borrowed."
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On the role government should play in the housing market:
"We need government intervention only to control lending standards and quality of mortgage loans. We don't need government agencies to buy mortgages to provide liquidity to the mortgage lending market."
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On bipartisan support for the Corker-Warner GSE reform bill:
"When both parties support a bill with widespread support from lobbyists, taxpayers should be on high alert!"
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