Four Things You Should Know This Morning

August 10, 2017 at 8:59 am Leave a comment

Camden Fine, the President of the Independent Community Bankers of America is one of the best provocateurs in the financial industry. He has really landed a good punch this week with a letter expressing outrage over the one billion dollars in legal fees, paid to the law firms which secured settlements against some of the largest banks in the world on behalf of credit unions. He even suggests that the episode demonstrates that “NCUA is in over its head in overseeing an increasingly complex and concentrated industry.” While I have a soft spot for bomb throwers – it’s time to set the record straight before this argument gains any more traction. For me, Chairman McWatters’ halfhearted defense of the agency’s decision to litigate, in which he throws previous board members under the bus, doesn’t go quite far enough.

Rather than be so outraged at the allegedly exorbitant fees paid by NCUA, why isn’t Mr. Fine outraged that the OCC and the FDIC didn’t come up with the idea of taking similar actions on behalf of those small community banks that suffered so much as a result of the excessive risks taken by the world’s largest financial institutions? Surely, they could have used 3.8 billion dollars in settlement money.

And I’m not going to concede that the fees paid by NCUA are out of line. This litigation is the legal equivalent of experimental brain surgery. It is high stakes and extremely expensive. Simply put, it’s not the type of litigation for which you can simply call up one of those guys or gals who slapped their faces on the back of buses.

Finally, when Mr. Fines talks about the one billion dollars in fees, he should be honest enough to admit that the billion dollar investment in holding investment banks accountable will save American tax payers money in the future. Next time the bankers need another massive bailout – and history tells us that there will be a next time – expect the OCC and the FDIC to use the example provided by the agency allegedly in over its head to get money back from the institutions responsible for creating the mess.

VANTIV Purchases Wordplay Group for 10.4 Billion

Further proof that payment processors are the new cool kids on the block, comes this morning with news that Vantiv has agreed to buy payment processor Wordplay Group for 10.4 Billion. This morning’s American Banker quotes Wordplay CEO Philip Jansen as saying that “The combination of scale, innovation, technology and global presence will mean that we can offer more payment solutions to businesses large, small, global or local.”

JP Morgan Chase to Stop Issuing Replacement Debit Cards

This bit of news is surprising to me. JP Morgan Chase has decided to cancel its program that it has had in place since 2012 that allows customers to instantly replace lost debit cards at many of its 5,300 branches. The decision is reportedly a reaction to an uptick in fraud.

Why does this surprise me? Because it seems that many of the potential fraud issues can be mitigated with proper identification procedures. And the ability to quickly replace lost debit card seems like it would be a real selling point to consumers.

One final note. Am I the only one a little scared that two megalomaniacal narcissists with access to nuclear weapons who have demonstrated a lifelong aversion to compromise are now busy yelling at each other?

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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