I was speaking with a friend the other day about the proposed financial regulations here in the U.S., including the creation of a Consumer Financial Protection Agency. Industry opposition to the CFPA brought to mind an incident in high school.
A monitor was hired to patrol the student parking lot before first period and again during lunch hour. Her job? To make sure the kids who gathered there didn’t smoke. The plan caused the kind of uproar you might expect from rebellious teenagers, with the president of the student council likening the monitor to Orwell’s Big Brother. When council representatives met with the principal to complain (assuring him that of course they didn’t smoke), he asked them, “So what are you worried about, if you’re not doing anything wrong?” The controversy was quickly forgotten and the monitor became a regular fixture, winning everyone over (the non-smokers, anyway) by handing out free candy on Halloween and Saint Valentine’s Day.
The moral of the story? Forward-thinking banks and credit unions already cast their relationships with customers and members as a fair and transparent exchange of value; they’re not worried about the creation of an agency meant to clamp down on practices they’ve shunned anyway. As Bloomberg’s Susan Antilla wrote in her column on January 25, “Among [the CFPA’s] goals, which in some sections read like a treatise against loan-sharking, are to truthfully explain costs, benefits and risks of financial products to consumers and to do it all in plain English.” In short: that is nothing earth-shattering, nothing that will change the way reputable institutions already do business.
Our practice manager, Sharon Chinn, referred to me in her recent post as resident doctor of consumer banking. I’m flattered! I only wish that the challenges faced by today’s bankers were amenable to that old-fashioned prescription, “Take two aspirin and call me in the morning.”