With financial institutions keeping interest rates lower and fees higher on new commercial hybrid accounts, institutions are, in fact, discouraging commercial clients from switching to their new products.
Banking powers, specifically the power to accept demand deposits, should be limited by Congress to institutions qualifying for federal deposit insurance. Otherwise we face uncontrolled systemic risk from inconsistently regulated entities.
The Dodd-Frank QM rule will restrict the availability of credit, but it can be less invasive if the CFPB develops a model that weighs all relevant risk factors, not just a few measures of capacity to repay.
Critics of nonbanks contend that consumers use "high-cost" alternatives because they are financially illiterate. But, like most simplistic conclusions, this one is seldom accompanied by facts and is as wrong as it is demeaning of the innate intelligence of these consumers.
In a typical case, a short sale took nearly nine months, and extraordinary patience and tenacity, to get done. That's no way to stage a housing recovery. Streamline the process.
Amex's Bluebird card account, exempt from Durbin and assertedly from bank regulation, is likely to generate high interchange. Consumers, banks and Amex won't pay for these checking accounts. Merchants (excepting Walmart) will.
Bricks-and-mortar locations aren't yet obsolete. Leading banks are responding to changing consumer demands by developing specialized branch formats, increasing their focus on advice and emphasizing proactive engagement with customers.
If your bank is gung-ho to issue prepaid cards, think again. Focus on how to retain checking account customers, rather than emulating Green Dot and Chase and issuing fee-based "prepaid cards" as a new (already outdated) product.
Proclaim the beliefs you would fight for - the essence of what differentiates your bank from others - then carefully ensure that every action, from your marketing, to your interactions and behaviors, matches those values.
