Slideshow 'Who Needs a Balance Sheet?': Comments of the Week

  • March 18 2016, 7:30am EDT
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American Banker readers share their views on the most pressing banking topics of the week. Comments are excerpted from reader response sections of articles and our social media platforms.

On the soundness of alternative lenders' growth strategies:

"Marketplace 'lenders' are generally not lenders at all, but marketing and securities placement entities. Who needs a balance sheet? Not a viable business model in normal times IMHO."

Related Article: Reality Check for Marketplace Lenders

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On an inspector general finding that the Federal Deposit Insurance Corp. engaged in "abusive" behavior in efforts to shut down tax refund anticipation loan businesses:

"When was [NFL Commissioner] Roger Goodell appointed head of the FDIC?"

Related Article: FDIC Strong-Armed Banks on Refund Anticipation Loans: Inspector General

In response to analysis on whether consumers will pay for faster payments:

"If banks really need to charge fees for a service like this they should probably consider a three-tiered approach: you get, say, three free real-time P2P transfers a month with your checking account and for, say, $6.95/month you get unlimited. For those who need more than three per month but not unlimited there could be a small (< $1) fee per transaction but not as long as someone like Square is making it free for 'fast enough' transfers."

Related Article: What Are Real-Time Payments Worth?

On whether the blockchain could replace banking networks such as Swift:

"Blockchain is an interesting but simple technology, smart contracts are probably where the future of innovation lies in this area. However, I fail to see how either will magic away the bureaucracy that infects the banking world."

Related Article: Will the Blockchain Replace Swift?

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A retort to an op-ed highlighting growing risks of the shadow banking sector:

"As large banks slowly reduce their direct exposure to mortgage lending, they are picking up new, indirect exposure via credit relationships with non-bank companies. The risk, in other words, is still very clearly 'in the bank' — albeit in a different form. The continued, irrational drumbeat against non-banks by current and former regulators is a false narrative that misstates the nature of the risk, which remains 'in the bank.'"

Related Article: Unregulated Shadow Banks Are a Ticking Time Bomb

In agreement with the argument that bank regulations ignite unintended consequences:

"Conceptually, it would be nice to condense all banking law into one, and make it UDAAP. Let banks do whatever they want, but they have to clearly tell their customers what they are doing, they can't deceive them, and they can't take advantage of them. And heaven help the bank that doesn't get it right. That would encourage an atmosphere of customer service, which is usually the root of complaints, rather than one of technical compliance. It might also add to those ambulance chasing legal solicitations I see on TV in the wee morning hours."

Related Article: Too Many Bank Regulations Are Counterproductive: M&T's Wilmers

On the regulatory imbalance between banks and shadow banks:

"We have an FDIC system in recognition of the importance of banks in protecting the money supply and transmitting the Fed's monetary policies. This is why we regulate banks more stringently than non-bank financial companies. That said, we must be much more intelligent about how, and the degree to which, we are regulating banks, as they are rapidly losing market share and are becoming less relevant in the marketplace."

Related Article: Unregulated Shadow Banks Are a Ticking Time Bomb