The GAO has spoken, but will the regulators listen?

The General Accounting Office issued a blistering report that put much of the blame for our financial crisis on the feet of the regulatory agencies. The GAO also made some specific policy suggestions.  Many of those proposals, incidentally, are contained in some form within the Consumer Financial Protection Act (CFPA).

The GAO said that both a lack of adequate data collection and a system that is too broken up were important in (more…)

Its a maxim that regulators can never quite catch up with the changes made by practitioners.  Mobile banking threatens to become the next example of that concept.  It very well could lead to undermine the Community Reinvestment Act (if unwittingly) unless some kind of regulatory fix occurs first.

The new Community Reinvestment Act Modernization bill (HR 1479) seeks to help that legislation catch up with the set of financial innovations that have occurred since the bill was last modified in 1993.  A lot has happened.  There is a lot of catching up to do.

That bill was drafted this spring.  Even now, though, it appears that the market is changing so fast that there could be a need for new amendments to the bill’s language before it is heard by the House Financial Services committee in the fall.

Today, there is news out of Charlotte than Bank of America is going to close one out of every ten of (more…)

If a bank offers a low or no-fee checking account, does it matter? It matters if people sign up for accounts, leaving the ranks of the unbanked, and join the modern financial system.

One new idea – the Bank On program -  is coming to your community.  It will aim to get the unbanked to walk into banks and away from check cashers and payday lenders.

Still, the broader question remains unanswered.  How can policy makers, beyond just the implementers of Bank On, design programs to reach the unbanked? The answer is very much up for discussion.  (more…)

The minimum wage is nice, but there are more efficent ways for the federal government to prevent poverty. We should think again about another increase to minimum wage, and instead think about putting more dollars into the Earned Income Tax Credit (the “EITC.”)

We like increasing the minimum wage because it enhances the livelihood of the poor, but it is not a welfare program.  It still requires that people work.

That said, its hardly the most direct way of targeting low-income working households.  The Economic Policy Institute suggests the minimum wage hits low-income households narrowly.  In a recent report, they estimated that almost two-thirds (63 percent) of gains from a minimum wage increase go to workers in the bottom 40 percent of income.

But what about the other 37 percent?  Well, that’s the first part of the problem.  Many of the other (more…)

In America, a US dollar is worth $1.00.  Unless that dollar comes from the State of California.  Then, the worth of the dollar is negotiable.

Three large banks (Bank of America, Wells Fargo, and JP Morgan Chase) have already announced that they (more…)