Slideshow

'Accounting smoke and mirrors': Comments of the week

February 14, 2019 10:00 PM

Readers weigh the BB&T-SunTrust deal, consider how a new accounting standard could affect Fannie Mae and Freddie Mac, debate the impact of the government shutdown on credit histories and more.

Deutsche Bank AG signage sits on the facade of a branch above a no entry sign, in Hamburg, Germany, on Saturday, Feb. 13, 2016. Deutsche Bank plans to buy back about $5.4 billion of bonds in euros and dollars as it seeks to allay investor concerns about its finances. Photographer: Krisztian Bocsi/Bloomberg

Krisztian Bocsi/Bloomberg

On Bob Roach, formerly with the Senate’s Permanent Subcommittee on Investigations, being hired by House Financial Services Committee Chair Maxine Waters to help lead an investigation into Deutsche Bank:

"Very thorough - and yet - none of the senior executives of the wrong-doers has spent a day in jail. Another opportunity to spend tremendous amounts of tax dollars that create theater but nothing else. Congress should focus on something other than 'politics as usual.'"

Related: Wall Street nemesis to join House panel's Deutsche Bank probe

Representative Blaine Luetkemeyer, a Republican from Missouri, speaks during a House Financial Services Committee hearing in Washington, D.C., U.S., on Wednesday, Nov. 14, 2018. Randal Quarles, vice chairman of supervision at the U.S. Federal Reserve, played down the risk of automation eliminating jobs and noted the "strong demand for labor in our current economy" as well as the hope that technology will enhance worker productivity. Photographer: Zach Gibson/Bloomberg

Zach Gibson/Bloomberg

On Rep. Blaine Luetkemeyer, R-Mo., seeking information about how a new accounting standard will impact Fannie Mae and Freddie Mac:

"Accounting Smoke and Mirrors! Assess the source of the profits that were swept to the Treasury over the last few years -- the vast majority were due to a reversal or reduction of existing reserves. Also examine the practice of pervasive off-cycle adjustments."

Related: House lawmaker warns of CECL's impact on Fannie, Freddie

Representative Maxine Waters, a Democrat from California and ranking member of the House Financial Services Committee, questions witnesses during a hearing in Washington, D.C., U.S., on Wednesday, Oct. 25, 2017. The hearing was titled Examining the Equifax Data Breach. Equifax Inc., already reeling from American probes into the loss of data on 145.5 million customers in a computer hack, will face an investigation in the U.K., where 694,000 consumers had information stolen. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

On Rep. Waters' criticism of the BB&T-SunTrust merger announced last week:

"If past mergers of similar and smaller scale are any indication, this is likely to spawn a wave of denovo activity as displaced middle managers hit the streets with their customers in tow. If only the FDIC can get its act together on applications this could end up being a good thing."

Related: Waters says BB&T-SunTrust warrants 'serious scrutiny'

document folder with the label regulations

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Another reader weighs in on Waters' critique of the BB&T-SunTrust deal, including her charge that it is a "direct consequence" of the current push for deregulation:

"No Mrs. Waters you are wrong. Dodd-Frank and the avalanche of other regulations is the reason for consolidation -( IE.. BSA - Beneficial Owner - Trid etc.....) They have had a devastating effect on Banks across the country. With increasing compliance cost, scale has become necessary. It has been especially hard on Community Banks which are the heart and soul of many of our Communities. We are losing those Banks at an alarming clip!"

Related: Waters says BB&T-SunTrust warrants 'serious scrutiny'

Senator Elizabeth Warren, a Democrat from Massachusetts, speaks at American University in Washington, D.C., U.S., on Thursday, Nov. 29, 2018. Warren said she opposes Nafta 2.0 in the foreign policy speech and will vote against it unless President Donald Trump reopens the agreement and produces a better deal for Americas working families. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

On Sen. Elizabeth Warren slamming regulators for lackluster supervision of M&A deals:

"The fact that the Board of Governors 'virtually approved all merger and acquisition requests' is hardly dispositive of a Fed that 'summarily' approves such transactions. Sen. Warren clearly knows not of what she speaks. You can't imagine the depth of analyses, even to the extent of handwringing, especially when considering CRA, that the Board goes through in rendering a decision. The process is borderline anti-business, with people who, ironically, are largely philosophically aligned with her."

Related: Warren questions Fed resolve on mergers after BB&T-SunTrust deal

US congress building in Washington DC, with blue sky

Gang - stock.adobe.com

On concerns from House Democrats that the 35-day shutdown unfairly hurt the credit histories of furloughed federal workers:

"It's not completely true that the credit bureaus couldn't figure out who was affected by the shutdown - your credit report often shows who your employer is. Or the credit bureaus could let you submit documentation that you were affected. Letters from consumer groups make this point."

Related: Government shutdowns add new wrinkle to credit bureau reform