Comments on: Congress writes strong new regulations for banks–and then exempts everybody but my grandma

By: tony_ansley

tony_ansley — Mon, 19 Oct 2009 18:20:02 +0000

@romingerd: Totally Agree! While I am for the language to be simpler to understand. At the end of the day, it is MY responsibility to know what I CAN AFFORD and it should be everyone elses as well. Government is not here to protect the public from stupidity or a lack of concern for each individual’s well being if they themselves don’t want to take that responsibility.

By: romingerd

romingerd — Mon, 19 Oct 2009 17:24:58 +0000

I regulate the banks I do business with just fine without the government’s help. I pay attention to my statements and question charges that are not what I agreed to. Rarely, I am caught off guard by something and am forced to contact the bank. If they are not flexible I close my account.
It would not take too many years for some loop-hole to appear in any regulation that the government might pass. Then banks would exploit this loop-hole and bubbles would form (in a different way) all over again. Can’t anyone see these bubbles are the result of government attempts to manipulate markets!?
I believe the government’s role should be primarily, to deregulate to the point that TRUE competition is allowed to work its magic, and then allow competition to work. Sure, some consumers would suffer. Sure, economic inequalities would exist. Sure, some institutions would “game” any system. But, how is that any different from what we have now? At least then, people who worked hard, played fair, and used their brain, would prosper. That would be a refreshing change.

By: cjxland

cjxland — Sat, 17 Oct 2009 19:03:03 +0000

Jim- there are a few steps WE can take:

First- the voters of NC and KS, respectively, can save themselves and the rest of us from Mssrs. Miller and Moore, repsectively, the next time they get a chance;

Second- we can all vote with our scissors and do our own bit of carving out, by carving up our credit cards- those of us that can, anyway;

Third- we can also “vote with our feet”- run, don’t walk, to the nearest local credit union. OK, they will be exempt under this new PT Barney law too- but as you point out, so will everyone else except your grandma. Credit Unions not only tend to be non-profits (sort of) but also tend to treat their local customers a bit better- frequently even recognizing the importance to their financial health of those “most desirable [of] assets” (well put DCM)…US.

By: dcmarciano

dcmarciano — Sat, 17 Oct 2009 12:21:04 +0000

The scenario you are describing would give a guarantee that biggest banks wouldn’t abuse the little guy. Kinda like $100,000 FDIC insurance but on the $100-$500 scale.
I may be wrong on this but hasn’t deleveraging made small depositors like me one of the most desireable assets for banks right now?
Seems like the unintended consequence here would make the “too big to fail” banks even bigger.

By: dblwyo

dblwyo — Sat, 17 Oct 2009 12:00:05 +0000

Bravo, glad to see you covering the regulatory reform fights. As much as Healthcare this will determine the path for the next 20 years and might even have more influence on investment success than paying attention to trends. It’s even refreshing to see you get a little hot about it, as we all should. That said, let’s raise three things to consider:
1. you should always consider the pragmatics of policy implementation….what kind of inspection staff would be required to create a duplicate regulatory supervisor for all the little banks? if it can be piggybacked on top of existing inspections and limit the burden on banks and the gov’t all to the good
2. the biggest offenders (the ol 80/20, or actually 90/10) in credit cards, mortgages, consumer finance, etc. are the big guys by far..go where the problem is and scale your efforts to the seriousness…again the carve out is not such a bad idea
3. as you point out competitive pressures should further induce more emphasis on service…in fact given the local advantage of the small banks you’d think they’d want to do this voluntarily
4. which leads to the major point – why is this necessary at all? what you’re describing is deliberate, conscious abuse of customers in the most shady and unethical ways…which violates every principal of good business practice there is (Nightly Business Report had an interesting segment Th on how important surcharges are to bank profits). This is the gov’t having to step in and fix problems the banks created and ones which should never have come up.
There are a lot of angry people out there, me included, so please keep covering this general area.