Slideshow

'Homeowners screwed again': Comments of the week

August 2, 2018 10:00 PM

Readers react to Wells Fargo's latest penalty, weigh in on the Vatican's criticism of credit default swaps and opine on the long tail of the financial crisis.

Pope Francis smiles at supporters outside the Vatican Apostolic Nunciature in Santiago, Chile, on Monday, Jan. 15, 2018. 400,000 Chileans attended Pope Francis' public mass in O'Higgins park, where St. John Paul II celebrated mass three decades ago. Photographer: Tamara Merino/Bloomberg

Tamara Merino/Bloomberg

On the Vatican criticizing the banking industry for "immoral behavior," including its use of credit default swaps:

"The failure in 2008 was not a moral failure of the instrument per se, it was a moral failure of the people using it - the assignment of AAA ratings when it was obvious that greed alone was used to justify those ratings. Not to ignite another debate, but guns don't kill people, people kill people."

Related: The curious case of the Vatican and credit default swaps

Randal Quarles, Fed vice chair of banking supervision

Randal Quarles, governor of the U.S. Federal Reserve nominee for U.S. President Donald Trump, listens during a Senate Banking Committee nomination hearing in Washington, D.C., U.S., on Thursday, July 27, 2017. Trump's pick to be the Federal Reserves top Wall Street watchdog said it's time to reconsider the restrictions imposed on banks in recent years, even as he credited regulations with helping stabilize the financial system after the 2008 crisis. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

On the Fed hinting how it might overhaul its oversight of regional banks following the regulatory relief law passed this spring:

"Regulatory burden should be commensurate with risk, however lest we forget, this is not about a dozen banks in the $100-$250 billion range, but about the more than 30 who were affected when the bar was raised from $50 billion to $250 billion. Is it a question of regulatory burden alone or an admission that existing bank systems are "antiquated" and "incapable" of a higher level of compliance with any degree of certainty? Oh, and they also make huge political contributions through their PACs."

Related: Cheat sheet: How the Fed will revamp regional bank regulation

Thirteen years after President Obama signed Dodd-Frank, the agencies still have not acted to adopt the law's incentive compensation mandates.

Andrew Harrer/Bloomberg

On an argument that Trump administration changes to Dodd-Frank Act rules are making the system more systemically risky:

"The author assigns WAY too much effectiveness to the Dodd Frank Act. As with 99% of legislation coming out of Congress, the supposed fix to whatever problem is supposed to be fixed is anything but."

Related: ‘Too big to fail’ is alive and kicking

Jelena McWilliams, nominee for FDIC chair

Jelena McWilliams, member of the board of directors with the Federal Deposit Insurance Corporation (FDIC) nominee for U.S. President Donald Trump, speaks during a Senate Banking Committee confirmation hearing in Washington, D.C., U.S., on Tuesday, Jan. 23, 2018. If confirmed by the Senate, McWilliams would join other Trump appointees who are crucial to his goal of rolling back rules for the financial industry. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

On a task force of bankers asking the Federal Deposit Insurance Corp. to simplify the application process for new banks:

"There is plenty of reason for concern. Bankers trying to sell the business model of the 90’s & 2000’s, the lack of understanding technologies most vital role, the requirements for bank directors with greater depth in larger businesses, a belief that NIM can not be the sole provider of income. As for the FDIC they insure the deposits, they should focus on being the best insurance regulator not a licensee of the charter. Capital is more important today than it ever was!"

Related: Banks plead with FDIC to simplify de novo process

Approved the contract documents with rubber stamp concept

petzshadow - stock.adobe.com

Another reader weighs in on efforts to streamline approval for de novo banks:

"While the application itself is indeed a heavy (and expensive) lift to complete, it would also help if the FDIC and other regulators were receptive to new and innovative bank models, rather than insisting all models be pretty much alike. In addition, requiring rigid adherence to business plans submitted with the application, with a slow and tedious approval required for any deviation, denies management the ability to respond quickly to changes in the marketplace."

Related: Banks plead with FDIC to simplify de novo process

A Wells Fargo & Co. sign sits on display outside the company's offices in San Francisco, California, U.S., on Tuesday, April 27, 2010. Wells Fargo & Co., the fourth-largest U.S. bank by assets and deposits, may raise its dividend once capital levels satisfy regulators and if the economic recovery continues, said Chief Executive Officer John Stumpf. Photographer: David Paul Morris/Bloomberg

David Paul Morris/Bloomberg

On Wells Fargo being fined more than $2 billion for mortgage-backed securities abuses during the 2008 crisis:

"No mention of the fact that WF, or originating brokers, falsified the documents submitted. No mention of the millions of homeowners shepherded into foreclosure by applying for HAMP. The banks destroyed the economy and destroyed the housing market. To date, not one regulator has forced, or even suggested, the 'banks' restore illegally foreclosed property to homeowners, or adequately compensate them for their loss. Investors compensated. Homeowners screwed again. Bring back Glass Steagall."

Related: Wells Fargo to pay $2.09B to settle U.S. mortgage probe

Times square ticker is seen on Monday, Sept. 29, 2008 in New York, U.S. Photographer: Jin Lee/Bloomberg News

JIN LEE/BLOOMBERG NEWS

On an analysis of how the financial crisis has engendered greater polarization and populism in today's politics:

"Not very optimistic!" (via Twitter)

Related: The crisis isn't over