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'Litigation threats are destroying innovation': Comments of the week

ByRachel Witkowski
October 3, 2019 9:00 PM

Readers react to a regulator's promise to reduce regulation that hinders innovation, Sen. Elizabeth Warren's plan to impose heavier taxes on lobby groups, Freddie Mac's exploration into AI and more.

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Man working on a project using futuristic digital tablet
Kirill - stock.adobe.com
On Federal Deposit Insurance Corp. Chairman Jelena McWilliams vowing to eliminate regulation that discourages innovation:

"Litigation threats are destroying innovation that could be realized. The sooner the better. Banks need it."

Related: Regulators can be the glue in bank-fintech partnerships: FDIC chief
Sen. Elizabeth Warren
Senator Elizabeth Warren, a Democrat from Massachusetts and 2020 presidential candidate, speaks during the American Federation of State, County & Municipal Employees (AFSCME) Public Service Forum in Las Vegas, Nevada, U.S., on Saturday, Aug. 3, 2019. Democratic presidential hopefuls attended the Public Service Forum to discuss their economic plans for working families, union employees and public workers. Photographer: Jacob Kepler/Bloomberg
Jacob Kepler/Bloomberg
On a proposal by Sen. Elizabeth Warren, a Democratic presidential candidate, to levy steep taxes on lobbying groups, including those representing financial services:

"Another example of missing the forest for the trees. If you really want to make a difference in the political influence realm, time to look at campaign finance reform."

Related: Warren lobbying tax could hit banking industry hard
tax form
A variety of United States tax forms with a pencil
Michael Flippo - stock.adobe.com
Another reader responds to a plan by Sen. Warren to impose heavier taxes on lobby groups:

"Forgive me for thinking, Senator, that your true concern is that those lobbyists might be successful at occasionally thwarting some of the wildly irresponsible policies you constantly spin up."

Related: Warren lobbying tax could hit banking industry hard
Sen. Elizabeth Warren, D-Mass.
Senator Elizabeth Warren, a Democrat from Massachusetts and 2020 presidential candidate, speaks during the League of United Latin American Citizens (LULAC) Presidential Town Hall in Milwaukee, Wisconsin, U.S., on Thursday, July 11, 2019. Former Vice President Joe Biden still holds a comfortable lead in the Democratic primary, an NBC/Wall Street Journal poll released Thursday shows, but Warren is steadily gaining ground. Photographer: Sara Stathas/Bloomberg
Sara Stathas/Bloomberg
A third reader reacts to Sen. Warren's plan to charge higher taxes on lobby groups based on their expenditures:

"If this is a serious proposal, how would the CU [credit union] lobbyist fare under the rule?"

Related: Warren lobbying tax could hit banking industry hard
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Artificial intelligence Machine Learning Business Internet Technology Concept.
Sikov - stock.adobe.com
On Freddie Mac's partnership with ZestFinance to test the use of artificial intelligence in making loan decisions and predicting the likelihood of borrowers paying back debt:

"What nonsense. ... We made loans to people with a history of not making their payments and guess what, they didn't make their payments."

Related: Can Freddie Mac's embrace of AI pull the industry along?
Office of the Comptroller of the Currency
The Office of the Comptroller of the Currency contends that Industry Bancshares is "in troubled condition," citing outsized vulnerabilities to changes in interest rates and the company's reliance on "funding sources that may not be available in the event of further financial stress."
Andrew Harrer/Bloomberg
On an op-ed by the Office of the Comptroller of the Currency's head of large-bank supervision, Maryann Kennedy, about the rewards and challenges to examining banks:

"Former career OCC examiner here. I agree with everything Ms. Kennedy said, except for one thing. ... With proper training and preparation, analyzing data and delivering bad news is easy. ... Having to deal with the bad news is the hard part."

Related: Dear banker: It ain’t easy being a regulator
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Magnifying glass on wooden table
POPESCU GELU SORIN/fuzzbones - stock.adobe.com
On the Federal Deposit Insurance Corp. taking a deeper dive into the May failure of a small bank in Texas, Enloe State Bank:

"FDIC plans an 'in-depth review' that will last another six months for a tiny bank failure? Since we already know the cause (an old formula), this is nothing more than a make-work project for a bunch of bureaucrats with nothing else to do."

Related: FDIC to conduct in-depth review of suspicious Texas bank failure
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people, money, saving and finance concept - clerk counting coins for customer at bank office or currency exchanger
lev dolgachov/Syda Productions - stock.adobe.com
On an op-ed encouraging small banks to layer their strong customer service with new technology to stay competitive with big banks:

“At the end of the day, if customers can transact online, you have to give them another reason to interact with your great people otherwise your best asset is underutilized."

Related: Small banks don’t have to win the tech race to come out ahead
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On federal regulators of both banks and credit unions offering programs meant to encourage the return of small-dollar loans to the industry:

"It is heartening that credit unions and banks and their regulators are continuing to explore ways to bring small-dollar lending to consumers who desperately need it. Bill Isaac, former Chairman FDIC."

Related: Small-dollar loan formula eludes banks, credit unions
Rachel Witkowski
Tech reporter, Financial Planning
Fintech Fintech regulations Tax Lobbying Compliance Failures Consumer banking Small-dollar lending Jelena McWilliams Elizabeth Warren FDIC OCC
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