Slideshow

'A textbook example of rent-seeking': Comments of the week

January 10, 2019 10:00 PM

Readers weigh in on pushback by appraisers to a new regulatory proposal, consider credit card issuers' role in the gun debate, respond to recent credit union mergers and more.

Comptroller of the Currency Joseph Otting

Joseph Otting, comptroller of the U.S. currency, listens during a swear-in ceremony at the U.S. Treasury in Washington, D.C., U.S., on Monday, Nov. 27, 2017. Otting, a former OneWest Bank Group chief executive officer, won Senate approval this month to lead a key U.S. bank regulator, further clearing the way for the Trump administration to roll back Wall Street regulations. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

On a look at an uptick in charter competition among regulators:

"There could be a couple reasons for bank ratings to go up after a regulatory switch not discussed in this article. One is that a bank often corrects the issues identified by the previous regulator prior to making the switch, i.e., its condition is improved, but they still switch because the regulatory relationship became toxic in the process. Another is that fresh eyes see stuff differently."

Related: Regulatory competition is hot again — and that’s worrisome

Home For Sale Real Estate Sign in Front of Beautiful New House.

Andy Dean Photography/Andy Dean - stock.adobe.com

On appraisal industry groups seeking a hearing to discuss a proposal by bank regulators to raise the threshold for transactions requiring outside appraisals:

"A textbook example of rent-seeking by the appraisal industry. If the regulators cave to the ridiculous request for a hearing, let's make sure the borrowers are represented in equal strength, since they get the privilege of paying fees for these nearly-worthless appraisals. There are at least a few million foreclosures on the books which were fully supported by appraisal values at the time of purchase/refinance."

Related: Regulators urged to hold hearing on proposed appraisal relief

An attendee holds a pistol during the Defense and Security Equipment International exhibition at Excel in London.

On an argument that credit card issuers should step up their monitoring of suspicious activity when it comes to gun purchases:

"Missing is a discussion of what the rate of false positives is likely to be. It is likely to be high, which would not only potentially chill legal activity by law-abiding card holders but would harm law enforcement by giving them more bad info (on top of the vast majority of SARs that don't amount to anything), while creating a trove of super-sensitive data that would be very harmful for consumers when a breach occurs."

Related: How credit card issuers can help curb gun violence

A customer at a gun shop in Albuquerque, New Mexico.

Another reader weighs in on a proposal in support of credit card issuers monitoring gun purchases:

"While the idea that gun purchase sku level data is available is hopeful - sku level data for cards is pretty messy if it exists at all. What is with the idea that BANKS should police LEGAL behavior? As abhorrent as it may seem, stockpiling a bunch of weapons is legal in this country. What other LEGAL behaviors should we have banks policing? If you want this be ILLEGAL, then lobby against assualt weapons. You don't want bank risk departments legislating. PERIOD."

Related: How credit card issuers can help curb gun violence

American Capital Building in Washington DC at Dusk.

W.Scott McGill - stock.adobe.com

On an argument that there could be room for compromise on some banking issues this term, if not for the partisan rancor:

The author makes an excellent case. This would be more of a return to norm, not just of recent years, but historically of banking law and regulation in general. With very, very few exceptions, banking legislation and regulation have not only been rather bipartisan, it might be more accurate to characterize them as nonpartisan. Differences and disagreements have more focused on questions of workability. The result has tended to be better and more durable policies.

Related: Banking could be bipartisan again. No, really

rubber stamps marked with regulations and rules

Wolfilser - stock.adobe.com

On an argument that recent credit union mergers don't pose a threat to banks:

"Credit unions are a fantastic deal for consumers. Their credit rates and account maintenance fees are always lower than the big four banks. Mergers of weak CU players make sense as $300 million and lower in total assets is just pathetic and incapable of sound diversification. However, since only 6 credit unions exceed $10 billion in assets there is probably a legislative sweet spot since they should not be allowed to grow forever tax free and unfairly compete with the high fee mega banks."

Related: Banker concerns about credit union mergers are overblown

Renovacio - stock.adobe.com

Another reader weighs in on an argument downplaying the impact of credit union deals, including a recent merger by PenFed:

"'Instead of closing the credit unions and shutting off access to credit union services, other credit unions stood up and worked with the regulators on emergency mergers.' Banks do this all the time. Welcome to the banking world, now pay your taxes you thief."

Related: Banker concerns about credit union mergers are overblown

The Amazon.com Inc. application icon is displayed on an Apple Inc. iPhone in Washington, D.C., U.S., on Monday, Dec. 5, 2016. Amazon.com unveiled a new security tool for cloud customers last week, part of a slew of product announcements designed to fend off competition from Microsoft Corp., Alphabet Inc.'s Google and others in the fast-growing cloud computing market. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

On a look at how banks can attract new customers online outside of traditional apps:

"It's one thing to imbed and integrate into other channels and platforms, and another to try to provide a soup-to-nuts menu of services. I prefer that my bank stay in its lane and provide a really good mortgage experience, and not presume to be expert in real estate, moving, etc. Jack of all trades, master of none."

Related: Banks need to think outside the app