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March 10, 2015

Banks want to close branches. Bank of America wants to close the most. What's the impact? Answer: more deposits and more mobile services.

January 5, 2015

A short list of some of the ways that people spoke about the Consumer Financial Protection Bureau, how they understood its purpose, and how it came to be authorized.

December 9, 2013

The Consumer Federation of America held its annual financial services conference on Thursday and Friday of last week. Many readers of this blog were there. If you are not familiar with it, you should really consider going at some time in the future. It is truly a wonk-fest for people working in retail financial services. While most conferences tend

December 8, 2010

I have obtained a copy of the complaint (pdf) prepared by Arkansas Attorney General Dustin McDaniel against Mo' Money Taxes, its successor MoneyCo, and the principal owners of the firm.

The complaint alleges violation of Arkansas' Refund Anticipation Loan Act ("RALA") and the Arkansas Deceptive Trade Practices Act ("ADTPA").

Mo' Money ceased to exist on August 8th, 2010. Since then, Mo' Money c0-owner Markus Granberry has established a new company, known as MoneyCo USA. It has its headquarters at the same address as Mo' Money Taxes. On MoneyCo USA's web site encourages people to return to

October 26, 2010

The rules that govern how money changes hands during most debit card transactions is about to change, but it is anybody's guess where things will stand once the marketplace finds its new equilibrium.

The Durbin Amendment to the Dodd-Frank legislation puts a price ceiling on how much retailers will pay on transactions where the card issuer has more than $10 billion in assets. Most financial institutions do not have $10 billion in assets, but the ones that do are the dominant in the debit card marketplace. Some accounts estimate their market share to be as high as 75 percent.

The pricing is driven by a principle that the ultimate cost of a debit card transaction should be at or below the cost of a paper check. There

September 3, 2010

The run on Kabul Bank leaves policy makers with a set of bad choices.

Kabul Bank was created as part of US strategy to create a civil society in Afghanistan. Critics might say that is another example of cultural imperialism, where a conqueror creates institutions that mirror their own. Fine. At the same time, a banking system creates the framework for exactly the kinds of changes that will lead Afghanistan toward progress.

Deposit-holding customers have withdrawn $200 million from Kabul Bank this week.

It would be less problematic if the shortcomings at Kabul Bank weren't so clearly due to

August 20, 2010

The time for a decision on ShoreBank may be coming soon.

A few rumors are circulating that the FDIC is ready to make a decision about ShoreBank, the famous Chicago community development lender that helped to define the field of community capitalism.

ShoreBank created a model of making loans in low-and-moderate income neighborhoods in the South Side of Chicago. ShoreBank ignored many of

July 29, 2010

Banks only have two more weeks to get their existing customers to opt-in for overdraft protection.

I couldn't believe it at first, but its true: banks are spending their time and money trying to understand the psychological makeup of the typical overdraft user.  One consultant says that it is all about helping the customer to make a "Good NSF Decision." I will let you guess how they define "good." The hunt is on. Now.

During the NSF-Hunt, a smart banker seeks first to understand. This is what the consultants are for, of course.  The rules don't prohibit overdrafts. They just make it a requirement that a consumer gives his or her consent for an overdraft service first.

Still, there's not a lot of time. If in two weeks, the banks have not found a way to get a consumer to opt-in, then that fee stream will be gone.

It is all about the right "relationship."You've heard that term. It is often the come on for a heavy package of wealth management services, or for private banking.

"The relationship banker is the person who is going to fulfill his or her professional mission by putting himself or herself at the disposal of a decision maker. You're not building your career on their back, they're building their industrial purpose on your back." (Fortune Magazine)

That's nice. But there are so many people out there, and so little time before August 15th. Moreover, the consumer that knowingly opts-in for overdraft is not typical.

She wanted a relationship with her bank. They said, "opt-in for overdraft." She said, "if that will make you happy."                                                      Now she wishes it had been different.

They're looking for a different type of person. They are seeking to find the co-dependent customer, ideally for a long-term relationship.

To help those bankers with on their NSF hunting, they are seeking help.

The Wall Street Journal has a feature on one of those consultants - David Peterson. Peterson wants the bankers to understand things.

What does a person feel when they get an overdraft? According to Peterson, it is a

July 29, 2010

The popularity of debit cards seems to have blossomed faster than the ability of wonks to find a means to describe them.

General purpose reloadable (GPR) cards are going to be the new way for low-income households to access the payments system. NetSpend estimates that LMI households will need to deposit more than $1.1 trillion in paychecks and government payments annually.  They may put some of those deposits into banks. However, they'll also use

July 8, 2010

The Federal Reserve will hear the first round of testimony next Thursday on the construction and dissemination of data provided for by the Home Mortgage Disclosure Act. The meeting will be held at the Atlanta branch of the Federal Reserve. Three other meetings are scheduled in the following weeks for Washington, DC, Chicago, and San Francisco.

HMDA data is freely distributed each fall through the Federal Financial Institutions Examination Council (FFIEC). The

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