Wednesday, September 7
John Batchelor, spreading joy and cheer again -- this time about feds regulating small-town USA out of existence
From his schedule notes for his September 6 show (see the website for link to the podcast for the segment):
Tuesday 935P Eastern Time: Gov. Frank Keating, president and CEO, American Bankers Association, in re: after 2008, the Feds tried to close the barn door but haven't figured out that the horses are outside. The old adage about bad facts make bad law is still true.
Mortgage banker, nonregulated payday lenders and the like, are the malfeasants, not the highly-regulated banks. Congress still writing regulations; average bank has 37 employees; regulations run thousands of pages. Small and medium-sized banks are exhausted, not clear that all of them can continue.
A four-branch bank in Texas is giving up its charter because it's been regulated out of business; is converting to an investment bank and will continue to make exactly the same loans it's been making heretofore.
If these small banks blow away, the towns cease to exist.
The ABA did a study: why the life-insurance industry, state-regulated, had no complaints, while the banking industry has a current unlimited regulator force: over 21,000 people - three banking regulators per community bank.
One of our banks' CEOs told [Keating]: A retired military doctor and his wife moved to this town, they have $100K in liquid assets and put 25% down to buy a house - and because he was late paying a student loan decades ago, the federal regulators have said that giving him a loan would be unacceptable.