Saturday, July 15, 2017

Honest Bankers

Please Step Forward


"Former financial regulator Bill Black offers bankers a challenge: Step forward if you support the new rule issued by The Consumer Financial Protection Bureau allowing consumers to bring about class-action litigation against banks who defraud them."
(The Real News.com)

Bill Black:
"The problem in consumer finance, lending, is that it is so easy for unscrupulous lenders to cheat, as we've just seen with Wells Fargo and we saw all through the crisis. Well if they cheat, economic theory tells us this creates a Gresham's dynamic, in which bad ethics drives good ethics out of the marketplace. In other words, you gain a competitive advantage by cheating, then market forces will cause the cheaters to dominate the industry, which is why finance is so corrupt. So when you stop them from cheating, and the rule that the bureau adopted is one way of reducing the incentives to cheat, then you actually help not just the consumers who directly deal with the lenders, but also all the honest bankers who would like to do the right thing and can't unless we restore the rule of law."

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