‘Why the double standard?’: Comments of the week

On Sen. Elizabeth Warren, D-Mass., calling on the Federal Reserve Board to remove 12 of Wells Fargo's 15 board members over the bank's phony-accounts scandal:

“If any community bank board had presided over the same outrageous and illegal practices as the Wells Fargo board members presided over, the community bank board members would have all been removed long ago and personally sanctioned and likely fined. Regulatory standards for the fiduciary obligations of board members do not delineate between community banks and mega banks. So why the double standard? What is good for the goose, should be good for the gander.”

Related article:

Warren calls for removal of most of Wells' board

A response to calls for banks to ape Amazon and other digitally driven companies that are expanding their physical footprints:

“We're not apples to apples in these comparisons. For one, good luck trying to get bank investors to take a ‘we'll be profitable sometime in the very distant future’ approach that Amazon has historically been granted. And Amazon and other online operators are coming from basically a zero physical location status, where large banks have thousands of existing locations. Amazon, et al likely do need more physical sites. Large banks may need fewer. Both things can be true.”

Related article:

Successful disruptors want brick-and-mortar. Why don’t banks?

In praise of an op-ed by Harris Simmons, CEO of Zions, advocating reform of Dodd-Frank’s $50 billion asset threshold for “systemically important” banks:

“The reason this policy has not been changed is not for the lack of well written, well-articulated arguments like this one. Everyone in D.C. KNOWS the current approach is wrong and is ruining our banking system and hurting our economy. But there are too many politicians who are more interested in defending and promoting a certain philosophical narrative than they are in actually focusing on results that help people. Thank you for your persistence Harris, we can't let the ideologues prevail.”

Related article:

Unshackle regional banks to jump-start economic growth

On small banks avoiding alternative data in their underwriting models:

“Community bankers have generally been through multiple credit cycles and a lot of their underwriting/credit policy comes from years of experience. Innovation is great, but sometimes those great scoring models don't work, and larger losses occur. Community banks are in this for long haul, and value the relationships they build with their customers. They don't want to risk those relationships or the bank’s capital on underwriting technology that may not be proven through multiple credit cycles.”

Related article:

Alternative credit data still a hard sell for small banks

On Michael Blume, a Department of Justice lawyer who played a key role in the Operation Choke Point saga, moving into a private law practice:

“Mr. Blume and the Administration agenda he championed used such a broad brush that many non-payday small business financial service providers and retailers had their banking relationships terminated for no reason. There was no justification or reasoning used....just 'off with your head' sayeth the King. Even businesses licensed by the federal government, such as firearms dealers were affected. There are many industries that will take note of where Mr. Blume now practices.”

Related article:

Key player in Operation Choke Point leaves DOJ, joins law firm

A response to advice on how banks should improve third-party vendor oversight:

“Just as bankers from smaller institutions point out the unfairness of ‘One size fits all’ regulatory treatment, they should have the same understanding of how their ‘One size fits all’ vendor management program unfairly taxes their vendor community.”

Related article:

Business lines must own their third-party risk management