Archive | December, 2011
Banks face uncertain times in lieu capital liquidity requirements, Congressional inaction, and IMF warning
Bad news in banking was the real story in the same day at the markets surge on positive economic data. Federal Reserve new capital requirements, totally defunct Congress leaving for recess with no extension of the payroll tax cut or unemployment benefits, and the IMF warning on world economy were a combination of news stories via the Drudge Report with major impact for the banking industry. The surge in stocks were followed by Monday’s routing of bank stocks due to uncertainty in Europe.
The commonality of all these issues for the banks is uncertainty. The new capital requirements will place additional strain on Bank of America. The bank has taken a beating in stock price, foreclosure practices, and consumer satisfaction to question the viability of the bank to survive the ongoing challenges. Second, a tax increase and unemployment benefits ending for many Americans in lieu of a deadweight Congress will be a tipping point for consumers who were able to keep up payments on obligations to default. This new variable will impact the industry, but the impact will not be quantifiable until mid 2012. Third, the IMF warning on the dangers to the world economy as Europe’s issues are America’s issues. The uncertainty in Europe will continue to be a negative factor on stocks especially for the banking industry.
As consumers, the banking uncertainty is important as events could impact your respective banking institution. A bank collapse or failure could happen without warning or notification. The best advice for consumers is to access Bankrate.com for a free ratings system on banks and credit unions, FDIC Troubled Bank List, and Google News or Google Finance for up to the minute news and market information on your banking institution. Please feel free to contact email@example.com if assistance is needed to find information about your banking or credit union institution.
- IMF Warns China To Act Quickly To Avoid Real Estate, Other Asset Bubbles (huffingtonpost.com)
- Latest IMF Bailout Fund Falls €50bn Short of Target after UK Refuses to Contribute (the2012scenario.com)
- Osborne presses on with bank ring-fencing plan (independent.co.uk)
- Bank of America Risks Capital Shortfall: Creditsights (thestreet.com)
- Fed issues draft Dodd-Frank big bank rules (marketwatch.com)
- The problems with the ECB-IMF switcheroo (ftalphaville.ft.com)
- Fed Rules For Bank Oversight Expected This Week (huffingtonpost.com)
December 19, 2011
My iPhone is a wonder of glory for an individual with some distraction and organization challenges in life. The phone is centric to my experience and needs. The cafeteria style applications for free and a charge upon my decision to purchase the application. This morning was a great example of what capabilities my iPhone could handle for 95% of my tasks, but one task was unable to handle the request via the iPhone. I was able to legally signed documents to send to two different contractors, completed two abstracts on future stories and e-mailed to the appropriate parties, began two posts with final completion on the laptop, used the remote to control all the office gadgets, and used the iPhone for dictation of another future post for later today.
However, I could not access my bank account on the iPhone this morning to make instant transfers between accounts, and I was able to access my account only two days ago. I was not informed that all smartphone transactions must go through the new app on the iPhone store(new to this organization). I had the updated app, and I could not gain access to my account because I needed a desktop to verify my identity via customer service as I proceeded to call. However, the accounts via the app and mobile web address have been accessed from my iPhone multiple times. I knew my password, and I used the correct password three times. However, the identification on my laptop was not complete, and I am now locked out of my account. I am not naming the institution, nor I am not giving myself credit of being the victim. I am a former banker, but my passion is banking. I know that every bank has a way to traverse their universe, and their roadmap makes it a difficult path for the consumer……
What does this have to do with personal finance, banking, or politics? My legal documents were signed, sealed, and delivered via the iPhone, and those documents were worth way more in monetary value than the funds in my bank account. I could not access my account because of a bank change that happened overnight. In addition, I went out of town on travel, and I could not used my card because I was outside the normal service area of Washington, DC. After my ego was slightly bruised, the problem was corrected until the following morning. My card was declined again, and I felt like a loser to the seventh power.I called the bank, and my card was accessed internationally, and purchases were made in Europe against my account. The bank did stop the wayward criminals from taking all my funds, that may take up to ten days to have refunded to me after I fill out some God knows form at my closest branch 500 miles away. Someone in Europe could access my funds, and I could not gain access to my own account in the United States . These “Europeans” are enjoying their weekend with my money. I have access to funds in an emergency, but I do not have access to this card or any of the accounts tied to the card. I have to wait ten days for a new card.
This is absolute madness. I want a banking system that makes it easy for me to conduct banking business not on your model, but my model. I rather be tortured than to hear the representative on the phone blaming me for a bank error. The language never changes as it is our policy, but we can’t, I am sorry those are bank rules. Rules? I played by the rules, but your system, your security, your technology, your end-user testing, and your careless attitude about the consumer was the factors that cause all this grief for me….I can imagine the person with very little knowledge about the banking world. The banks are suppose to be our partners, counselors, and shows us a better to become personally responsible….
Republicans and Democrats take notice. The banking system vacuum in our communities is the most unethical and immoral behavior to the future generations to live or aspire for the American Dream. As consumers, I can tell you that our financial system must be given back to the people of the United States. The right candidate must fix our foundation and middle class for America to be a free and prosperous society. That foundation is our banking system, and we want it back….
Attention Banking Institutions who do not value the consumer business of the bank:
BANKS SHOULD BE ABLE TO OPERATE IN MULTIPLE BUSINESS SEGMENTS AND ALLOWED TO BE ENTITIES OF PROFITABILITY….
HOWEVER, BANKS ARE OPERATING UNDER THE FEDERAL RESERVE BANK AND THE SAFETY OF THE FEDERAL DEPOSIT INSURANCE CORPORATION….THEY MUST MEET TRADITIONAL BANKING DEPOSITS AND LOAN GOALS IN THE COMMUNITY BEFORE RECOGNITION OF PROFITS…..THEY MUST REACH A BENCHMARK OR FORFEIT ALL PROFITS FROM EXTERNAL BUSINESS SEGMENTS FOR THE QUARTER….THEY CAN BECOME A NON BANK ENTITY AS THE ALTERNATIVE OR OPT OUT OF THE BENCHMARK PROGRAM….THEY REQUIRE THE SAME FROM THEIR EMPLOYEES TO RECEIVE BONUS AFTER REACHING A BENCHMARK…….
My former experience as a former banker has enlighten me that we can do better. The politician making bold statements with bold actions to bring the banking back to the consumer; will capture my vote. This election is not about being politically correct or being party specific.I will not be rude or derogatory to anyone. However, talk is not fixing our American way of life. The community banking industry was the post WWII driver of wealth and opportunity for all communities large and small. The relationship of company, community, and consumer was reliant on the success and sustainable of all parties involved. I did not say perfect, but we did survive the long and brutal decade of the 1970′s. This time is much different as the consumer’s loss of the community banking system is the loss of prosperity and freedom for us all. The moral candidate will begin any fix in our financial system or the foundation. Without the foundation of the financial system, everything built will fall in a collapse.
- Bank Account App (lebeermat.wordpress.com)
- Apple to sell 30m iPhones in December? (mobile-ent.biz)
- Good News! T-Mobile Just Switched On 3G For Some iPhone Owners (AAPL, DT) (businessinsider.com)
- iPhone App of the Week: Lipstick Personality Test (bellasugar.com)
December 19, 2011
Consumer’s must make the restoration of a healthy financial system a top priority in the 2012 election. The consumer access to a healthy financial system empowers personal responsibility and innovation in society. The consumer’s restoration of health in the financial system is the foundation the post WWII economy was built upon. This restoration is beyond any one party or ideology. This restoration is American.
In review of the Republican party, the party of less taxes and less government has a fly in the ointment of core principles and beliefs. The fly in the The Republican Party’s ointment is a man named Grover Norquist. Any restoration to the financial system falls flat on the side of the Republican Party under one lobbyist and his firm Americans for Tax Reform. The Taxpayers Protection Pledge is signed by 95% of all Republican Congressman and all but one 2012 Republican presidential candidates. The pledge opposes all taxes increases or any reduction or elimination of deductions or credits. What unelected official in Washington has the power to engage politicians into such an agreement for one man representing according to 60 minutes some wealthier individuals.
The following opinion piece in the Natasha Telegraph provides the best analysis:
Grover Norquist is an autonomous power in the United States Government, and The Republican Party calls for less government and less taxes with a Tea Party Banner. Is less government a dictatorship and it’s leader Grover Norquist. The Republican party is a party with a core of power in Grover Norquist. Germany made a choice in the 1930′s for one man to hold supreme power, and one man holding such a power bloc over the Republican party is a concern for the preservation of freedoms under our constitution. Is Grover Norquist interests in the benefit of the few or restoration of a healthy financial system in America? What the Republicans or Norquist proposes a financial system fixes? The answer sounds like crickets.
- Grover Norquist’s hold on the GOP (cbsnews.com)
- Whose Cup of Tea? Republicans flat on financial fixes under guise of Grover Norquist (donny-wise.com)
- President Obama and The Tea Party performance on Consumers Banking and Financial Reform issues as 2012 nears (donny-wise.com)
- Grover Norquist: The Billionaires’ Best Friend (rollingstone.com)
- GROVER NORQUIST’s OFFICE THREATENED TO BE BOMBED…I can’t imagine why? (right!) (bonjupatten.wordpress.com)
- Congress set to throw in the towel (politico.com)
- Former Sen. Alan Simpson: Who is Grover Norquist a slave to? (kaystreet.wordpress.com)
- Who’s Afraid of Grover Norquist? (themoderatevoice.com)
December 19, 2011
Republicans and Democrats are both parties with similar issues in lacking real world experience to bring feasible policy solutions to fix the ongoing foreclosure crisis, a crisis that is a blight on the housing market. This first of two articles focus on the reelection problem for Obama’s 2012 presidential bid,and the second article will focus on the Republicans lack of real world spin. Since Obama’s election into office, the foreclosure crisis was evolving in the credit collapse and near economic collapse of September 2008. This crisis required people with real world knowledge and experience to work with the intellect and theorist in formulation of policy to crush the foreclosure crisis. The President and the inner circle of staffers did not incorporate such a common sense logic into forming feasible policy to resolve this issue. The vacuum of tangible real life experience with life or people outside the inner click was or is not part of the Obama Presidency.
The American Banker reports Neil Barofsky, the former special inspector general for the Troubled Asset Relief Program, did not provide positive feedback on the Obama’s handling of the foreclosure crisis. Barofsky’s comments on the foreclosure crisis: “Everything that has happened since (TARP) has been something of a mess.” The retiring Representative Dennis Cardoza (D-California) did not mince words in his declaration of President Obama as an “arrogant professor” who has alienated himself from his fellow Democrats and the American public. Cardoza comments did alleged President Obama to be an out of touch elitist, given to lectures, but uninterested in the struggles of of the real people. Does this explicit criticism may explain the current inability of the administration to bring resolve to the foreclosure fiasco in process to assist the personal responsible homeowners and the homeowners facing illegal foreclosures against their respective properties?
The administration’s responsibility is not to bail out the irresponsible homeowners out of foreclosures or intervene in the market to workout modifications for homeowners who have the capacity to avoid foreclosure. However this situation was a cataclysmic event where the housing collapse left a litter of foreclosed properties in the wake of the 2008 crisis. The mass defaults on mortgage loans and the reverse in demand for housing made a perfect storm to collapse the values of home prices Four broad types of foreclosures were blights on the the housing market prices beginning with the sub-prime crisis, the Alt-A mortgages or good credit scores with little
money down, upside down crisis or home loans above the new appraisal price of property, and the the unemployment crisis or long-term unemployment ending in the affordability of real estate loans on properties. The long term unemployment crisis should be the ending of the foreclosure crisis with some return back to normality. The nominal correction of the housing in 2010 was halted when foreclosures began to drag again on the housing market, and a second housing correction was taking place as illegal mortgage foreclosure practices by certain banks were creating a fiasco in the housing market that is still being experienced in the market today.
In 2009, Rick Santelli, CNBC Business News, made comments about defaulted homeowners being “losers” and the government’s Home Affordable Modification Program or HAMP program was “promoting bad behavior” as reported by The American Banker. That is a unique analogy when TARP was being distributed and government intervention into the defaulted banking system. The same analogy “loser” was not once used by Mr. Santelli in the analysis of the corrupt financial institutions that pushed the global economy to the brink, or the TARP monies being the saving grace of the financial system by those same “losers” or taxpayers. However, the Obama administration did not field the general public for the reality of the crisis. The administration did heed the rants of individuals like Rick Santelli, and the Obama White House went down the road of tepid policy response in handling the growing crisis in 2009. The “undeserving homeowners” would be the label of the Obama White House. Not one person wants to underscore the need for personal responsibility in the maintaining their obligation to their loan contract on their home, but the missing the boat completely by the Obama administration was the same as stating to all the borrowers with a record of personal responsibility, decrease in monthly income due to recession, or homeowners being illegally targeted as defaulted borrowers. There is no real assistance or hope for borrowers, and the implementation of the water-downed HAMP by the Obama administration is adding sorrow to misery as reported in The Huffington Post.
The election season is not far, and the foreclosure crisis still plays havoc with the housing market. Why has the crisis gone this far? Why has the government’s policy initiatives made things worse? The following quotes from staffers under President Obama may bring some sense to the chaotic mess. The following quotes were taken from Rep. Dennis Cardoza’s article in the Hill.com
One former administration official told me directly that the people in the White House “NEVER TALK TO REAL PEOPLE.” Another former Obama staffer confided to me that it was clear to him that the president didn’t mind giving speeches (lectures), but really avoided personal contact with members of Congress and folks outside the Beltway. “He doesn’t seem to derive energy from spending time with regular people the way Clinton did. He rallies to give speeches for the big crowds, but avoids individual contact,” the former staffer recalled. This “arms-length” attitude extends to top decision-makers in the president’s administration. A senior housing official recently told me that, despite the fact that he was responsible for crafting policies to stem the foreclosure crisis, he had personally never met with a homeowner who had been foreclosed on.
In conclusion, the ongoing foreclosure crisis does impact in the home market’s value the consumer’s ability to buy and sell a home, qualify for a new home loan, afford a current residence/home, and impact the wealth available to your household or future financial planning. The longer the crisis will result in greater pain for the consumer, the market, and the real economy. For President Obama, the explanation of bad actions may not be a comfortable topic when intellect and orator cannot dispel the cold hard facts of reality. The crisis is bad, and the lack of real world experienced talent in The White House is causing insurmountable damage in creating bad policy to handle matters like the foreclosure crisis. Reelection problem for Obama can be changed by a cup of humility with the real folk. The dialogue of real change can begin……
- White House To Keep Pressure On BofA, JPMorgan To Help Ease Foreclosure Crisis (huffingtonpost.com)
- The Saga of Cape Coral Foreclosures – Real Estate – Foreclosures (rawbusinesslaw.com)
- Loan Modification Process ‘Adding Uncertainty To The Market,’ Delaying Recovery (huffingtonpost.com)
- The Stability of Raleigh Foreclosures amidst Economic Crisis – Real Estate – Foreclosures (rawbusinesslaw.com)
- Loan-Modification Blunders Bedevil U.S. Housing Recovery (ibtimes.com)
- Avoiding Foreclosure (cookcountyillinoisshortsales.wordpress.com)
- There Goes the Neighborhood (cbsnews.com)
- What went wrong with foreclosure aid programs? (usatoday.com)
- California Dems intensify pressure on Obama to tackle foreclosures (thehill.com)
- How to rescue the housing market: Foreclosures! (money.cnn.com)
December 14, 2011
I am excited to announce that my talent to tell a good story will have a positive impact in a new partnership opportunity with the Examiner.com. Monday will begin a new era in the field of online journalism. I have been appointed as the new National Unemployment Columnist and Examiner with the Examiner.com. This announcement comes on the same day as the announcement about our partnership with CBS. Please reference this blog post for updated information about details on the new National Unemployment Examiner column. This column will go further than telling the news stories about the challenges and success of unemployment in America. This column is about real people and real experiences and the impact of high unemployment to the American job seeker. To be continued…
December 14, 2011
As a former bank executive, individuals would apply for construction loans to build a speculative property with the intent to sell for profit after completion. Individuals with stellar credit, reserves, stable income, and little or no debt were not the perfect candidate to extend approval for a construction loan. Ordinary world experience was the real guarantor of the property would be built and sold for repayment of the loan.
Do you have specs and a portfolio of your work? Do you have experience building this type of speculative property? An individual responding no to the experience question was given the advice to plan to hire a builder with experience or find an opportunity to gain this experience. How can you guarantee to build a feasible property when you have no experience otherwise? Isn’t the same reality relevant to our current crisis in the financial system? How can you lead or formulate policy without any experience of the impact of these problems in the ordinary world? The Department of Labor released a report about the skilled labor crisis facing our nation. What consumers, smaller financial institutions, and small business owners are finding out slowly in financial. There is an crisis in the political leadership in ordinary world or real world experience. This crisis is very evident in the inability of Washington to formulate good policy to resolve the ongoing foreclosure an. financial system crisis. To be continued—DRAFT COPY
December 13, 2011
DC Community Banks cover a large coveted footprint of DC proper, Northern Virginia, and Maryland as an aggregate unit, but individually are fragmented in market presence and penetration. The individual community bank is a weakness in the current economic environment, and this weakness is a vice on the bank’s ability to be competitive, hamper revenue and market growth, and vulnerable to any minor flux in the market or portfolio. DC Community Banks are missing a market opportunity in wake of the historical demise of Chevy Chase Bank, and the vacuum of a regional player in the market leaves a marketplace of small community banks and banking giants with headquarters elsewhere. The Washington Post details the challenges of the community banking industry in the DC marketplace. Recent events in the implementation of the financial reform bill and loan demand in a flat economy. Strategize to survive is a way for community banks to collaborate, coordinate, and innovate to capitalize on strengths and effectively solve weakness.
In the traditional model, a merger would unite banks to strengthen position and presence in the market. The recent Eagle and Alliance merger attempt is a huge indicator of the difficultly a merger of two community banks in DC is less than feasible. Community banks must attract new clients in a market of commuters and movers and overcome the smattering of a few branches and ATM locations to service the market. The credit unions collaborate to overcome the same challenges of branch and ATM coverage. The Shared Branch Network allows the Federal Credit Unions in downtown DC with one or two branches operating in a secured access area to provide customers with the option to make deposits or withdraw cash at any credit union in the Shared Branch Network.
A second example of strategy is to coordinate with other community banks to share resources to provide customers with product
offerings and services that may be too expensive or niche for one bank to offer alone. Credit Unions coordinate to provide financial services and insurance options by sharing a representative with one or more credit unions as a third-party provides the products, and the credit unions provide the clients for these services. Several community banks are active in the mortgage origination business, and they coordinate to originate the mortgages to be sold without retaining the origination’s in the bank’s loan portfolio. Another example is finding partner community banks to coordinate an exchange of services to complement a gap in the bank product offering. One community bank in Northern Virginia offers remote deposit with no cash management services to business customers, and another bank in Maryland offers cash management with no remote deposit service. The consideration of compliance must a factor in a real world partnership of this magnitude. The two community banks do attempt a merge but coordinate services to provide clients of both banks cash management and remote deposit without infringement in each other’s market but coordinating services to save on costs and strengthen position in the market.
The final example of strategize to survive is to innovate, innovate, innovate. Community banks focus on attracting small business owners because of the value in profitability in origination of business loans to this niche clientele. The need for business loan products is non-existent as healthier businesses are not seeking credit in a fragile economic environment, and the financial reform bill is full of new regulations and associated on certain lending products and services. Community banks must innovate to overcome the loss of revenue and increased cost environment. Business owners are not the only clientele in the DC marketplace as demographic information provide insights into additional penetration in the market. In addition, the bank can innovate a new program to attract the up and coming affluent young professionals since the DC market is a destination of this demographic. The marketing to a new customer group provides an opportunity to recoup the revenue from the decrease in loan demand and meet long-term strategic growth objectives in a broader penetration in the market.
As a former banking executive, relevant strategy was essential to be flexible in adapting to economic and market change to position market to be successful in a volatile and changeable market. The community banking industry can utilize the same strategies as the credit unions to overcome similar problems in locations and product/services offered. The industry has access to an affluent marketplace to pursue new opportunities. The community banking industry in DC must strategize to survive in the current environment. The adoption of practices now in place and capitalizing on a diverse, affluent marketplace can bring the positive results of change without bearing all the costs.
- Why More Bank Capital Won’t Cure All The Economy’s Ills (forbes.com)
- Chris Turley will Target Federal Market for First Virginia Community Bank (prweb.com)
- Follow ICBA on Twitter For Latest Community Banking News and Updates (prweb.com)
- Estrellita Azul Group : Paraguay (kiva.org)
- Should You Join a Credit Union? (abcnews.go.com)
- The Lighter Side of DC (donny-wise.com)
- Credit Unions revise downward results from Bank Transfer Day (donny-wise.com)
- Bucks Blog: Web Sites for Choosing a New Bank (bucks.blogs.nytimes.com)
- FORGET CREDIT UNIONS: Here’s Why You Need To Join A Community Bank (businessinsider.com)
- Sluggish Economy Fails to Stifle Community Bank Investments in Payments Products and Services (prweb.com)