Dennis Moore Interview

I interviewed Representative Dennis Moore, D-KS, yesterday about the Consumer Financial Protection Agency and the amendment he submitted to keep institutions under $10 billion from being directly regulated by the CFPA. Seemed like a nice guy. He had some interesting things to say about preemption and too big to fail. Look for my article on these topics in the December issue of BankNews to read what he had to say.

Not a Recession, but a Man-cession?

In the October issue of The Regional Economist magazine published by the St. Louis Fed, there was an article about how this recession is hitting men harder than women. It said that "between the fourth quarter of 2007, when the current recession began, and the first quarter of 2009, men bore 78 percent of the job losses. Over the same period, the unemployment rate for men rose from 4.9 percent to 8.9 percent, while the rate for women rose by only half as much, from 4.7 percent to 7.2 percent." The article goes on to say that this gap in unemployment for the genders has no precedent during the post-war period. Therefore, some are calling this a man-cession, not a recession. Wonder why that is?

Protesters at ABA Convention

The American Bankers Association's annual convention was held Oct. 25-28 in Chicago and was the site of a three-day demonstration against foreclosures and taxpayer bailouts for banks. The event was organized by union and community organizations with one article citing more than 5,000 protesters in attendance. According to an article at PR Newswire, the ABA and the six top banks have spent $35 million fighting financial reforms after accepting $17.8 trillion in taxpayer bailouts and backstops.

http://media.prnewswire.com/en/jsp/latest.jsp;jsessionid=E2C28EE41FAA53912E057ADF2C983F2E.tomcat1?resourceid=4098835&access=EH

http://rawstory.com/news/afp/Thousands_protest_bailout_bonuses_a_10272009.html

Not sure what to think about this. I guess my initial reaction is "just another reason community banks need to differentiate themselves from the big banks." Then I read this article and even more interesting to me -- the comments people posted below the article.

http://www.chicagobreakingnews.com/2009/10/american-bankers-association-protest-michigan-avenue-chicago-showdown.html

It's interesting to read the various arguments and rebuttals. It gives you a real sense of what Americans are thinking and how well informed or misinformed they truly are.

They Make Their Mommas Proud

Here's an article today about two sets of siblings that robbed a bank but accidentally left their car keys in the bank when they ran out with the money. Ha!

http://www.philly.com/philly/news/breaking/20090901_Call_it_a_case_of_sibling_robbery.html

Tough Battle Ahead

Well, something the banking industry was praying was avoidable now appears to have started the process of becoming unavoidable. The House Financial Services Committee approved H.R. 3126, which creates the Consumer Financial Protection Agency.

However, there is positive news. A critical amendment proposed by two democrats was included. According to the summary of the bill, "The bill will leave primary responsibility for consumer compliance examinations with the appropriate federal prudential regulator for banks with assets of $10 billion or less and insured credit unions with $1.5 billion or less. Larger depository institutions will have simultaneous federal safety and soundness and consumer compliance examinations (unless they request exams at different times). "

That's good news in that smaller institutions won't have to deal with yet another regulator coming through their banks. But, I'm not convinced that couldn't happen, because the bill summary goes on to say "For depository institutions below the asset threshold, the bill:
1. Allows the CFPA to send an examiner to participate in exams conducted by prudential regulator
2. Gives the CFPA authority to remove a prudential regulator as consumer compliance regulator on an institution-by institution basis if it determines the regulator failed to adequately carry out consumer compliance supervision with regard to the particular institution (Such determination could be overruled by the Secretary of Treasury)
3. And allows the CFPA to make special investigations and prosecute enforcement actions based on complaints received in the CFPA’s consumer complaint process."

Yikes! That's still a lot of power. If this bill passes in the Senate too, it sounds like community banks can expect increased scrutiny from its current examiners as well as potentially from this newly created entity.

Check Out the Article in USA Today

There's an article on USAToday.com that briefly explains how community banks are struggling to compete with big banks who get bailed out by the government. While short, it's an interesting article that gives the average consumer a brief glimpse of what community banks are currently facing.

Of all the regulators, Bair seems to be the most vocal about too-big-to-fail and its impact on community banks. This is not the first time I've read about her defending community banks. I think that's great. She's a powerful ally for the industry.

FDIC chief: Small banks can't compete with bailed-out giants
http://www.usatoday.com/money/industries/banking/2009-10-19-FDIC-chief-sheila-bair-banking_N.htm