'What Were These Directors Thinking?': Comments of the Week
October 9, 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 our social media platforms.
On the discontinuation of an ambitious faster-payments project and ouster of CEO Gordon Baird at Independence Bancshares in South Carolina:
"What were these directors thinking? Baird must have been a great salesman to entice the board to spend nearly $10 million on a totally unproven technology instead of them focusing on getting the bank back on a firm footing. I am also amazed that the regulators let this go on so long. Thank goodness the board came to its senses."
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On the Consumer Financial Protection Bureau's plan to all but ban arbitration clauses from retail financial contracts:
"The only ones who will benefit from this rule will be the lawyers, particularly the plaintiffs' bar. Consumers will see very little from settlements, costs to financial services providers and their customers will increase, and there will be even more disclosures to confuse and frustrate consumers, if they bother to read them."
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Speculating on CFPB Director Richard Cordray's motivation for curtailing arbitration agreements:
"Cordray is more concerned about protecting the income stream of his friends, the trial lawyers, than he is protecting consumers. Most class action cases return very little to the consumer and are a windfall for trial lawyers."
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On the peculiar way EMV cards are being rolled out in the U.S., with less-secure signature verification allowed rather than requiring PINs:
"Credit card companies say it's because fraud due to stolen and lost credit cards isn't a big deal. And that they don't want to 'burden' people with remembering lots of PINs. But there's no reason why you can't use the same PIN for all your credit cards. Sure, the online fraud problem still exists even with chip & PIN cards. But not implementing chip & PIN, when there's no good reason not do, seems like a gift to the bad guys. And an inconvenience to Americans who want to use their cards abroad."
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Responding to criticisms of payday loans:
"These loans are a last resort for borrowers who otherwise cannot qualify for mainstream credit. If payday loans are not automatically deducted from a paycheck, the payday lender would not see repayment. More laws on the books to restrict credit make people feel good but these same people fail to ask if the laws do any good. How about asking the former payday borrower, why did he use a payday lender and what would he have done without access to a payday lender?"
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On claims that Fannie Mae and Freddie Mac are not sufficiently capitalized:
"The GSEs are sovereign entities, period. They do not require any private capital beyond the support of the United States. Indeed, viewed from a fantastical 'private sector' perspective, both entities are technically insolvent.
Instead of making arguments about the need to recapitalize sovereign entities that require no capital, we should put both Fannie and Freddie through receivership
and reconstitute both entities as they were at inception. The act of putting the GSEs into receivership could perhaps serve as sufficient catalyst to force Congress to act on a long-term model for housing finance. Frankly with the FHA and the FHLBs, we really do not need two more GSEs in the mortgage market, especially with the various new regulatory mandates killing volumes in the 1-4 mortgage lending sector. Does a $1.5 trillion mortgage market really require FOUR GSEs?"
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On the vulnerability of Americans' sensitive personal data laid bare by the Experian breach:
"This isn't news; this has been the operating environment for years now and it just continues to get worse. There is enough supply out there for 'fullz' on carder forums (full name, [date of birth], address, [Social Security number], even mother's maiden name and other challenge questions) that a fully compromised identity sells for only $0.16 if you're buying in bulk .
Unless we change our national system of identification, it will only continue to grow worse."
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On the disproportionately small number of women in banking:
"The female view is getting lost. Females make up the majority of bank marketing positions, but their views do not get sufficient heard. As a result, we have very male dominated bank marketing. Just look at your typical bank branch, product brochure or advertisement colors, themes, etc. That is a shame as it is the female that often makes or heavily influences both business and household financial decisions. There is a disconnect here. A disconnect that can be partially solved by more women in executive management roles."
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