Banks and Bank Regulators
Best nugget — OK, boulder — I’ve run across the last few weeks discussing banks, bank regulators, and the tortured birthing (maybe) of a consumer financial protection agency:
The real reason current regulators don’t pay more attention to consumer problems is not that they are evil (well, mostly they’re not), but that they have another mission that takes priority. They are charged with insuring the safety and soundness of the banking system. And safety and soundness means making sure that banks have enough capital ” and are compensating for loan losses. When a bank decides to raise a customer’s credit card interest rate to 35 percent to make up for losses elsewhere in the credit card portfolio, that believe it or not, is a good thing from the perspective of safety and soundness. Even though it is a terrible thing for consumers.
–Joe Nocera, “Have Banks No Shame?”; The New York Times (10/9/09)
P.S.: my first “real” post-college job — about 25 years ago(!) — was as a CPA. My specialty? Auditing small banks and agricultural co-ops.