Financial and Economic Wish List for 2014

Happy New Year! As I sit on the doorstep of 2014, it is with hope for a strong economy, worldwide peace, and an end to hunger and deadly diseases. I know I am asking for much, and I do not really believe it will all happen. But wouldn’t it be nice?

Instead, from a banking standpoint, I will focus on financial and economic issues. Practically everything needed to make 2014 a wonderful year will have to emanate from Washington DC. Some issues relate to economic policy, some to regulatory restraint, and some to legislative initiative. Bear in mind that this is a wish list, not a forecast.

It is incumbent upon the Federal Reserve and new Chairman Janet Yellen that the unwinding of the asset purchase program be done in such a way as to not harm the still-fragile economy. Any action that causes a spike in inflation or increases the unemployment rate could be devastating. No doubt, members of the Federal Reserve Board will have their hands full.

On the regulatory restraint side, we face a tall order. Little has been done, aside from verbal recognition that regulatory burden is a problem, to demonstrate any restraint. Regulators have consistently looked at each rule they write as a unique document, designed to deal only with the issue at hand, with no regard for the totality of the rules being issued, their effect on other rules or the differing applicability to various financial service providers. Further, there has been little differentiation of the rules for different types and sizes of banks; most rules are written as one-size-fits-all.

In particular the Consumer Financial Protection Bureau should direct all of its attention to nonbank financial service providers to bring them up to the same regulatory level as the banking industry. That task is technically what it was created to do, but seemingly the CFPB has turned most of its efforts to banks, instead of nonbanks.

Regarding legislative initiative, it is well past time for legislators to recognize that their actions or inactions are hindering economic growth. Financial services providers cannot help grow the economy, while they continue to be choked with unnecessary and redundant compliance costs. It is imperative that Congress provide meaningful regulatory relief. Certainly where there are bad actors, impose appropriate penalties and sanctions, but please allow the other 99.9 percent of providers to do their jobs without compliance constraints.

Secondly, legislators need to stop passing economy-killing laws, and get out of the price control business. Markets determine prices. Supply and demand determine prices. Government must not interfere. That said, I doubt much relief or additional burden will occur this year. It is an election year, after all, so little will be done other than campaigning. But wouldn’t it be nice?

S. Joe DeHaven, 01/01/14

2 Responses to Financial and Economic Wish List for 2014

  1. Mike Parnon says:


    Your comments are right on the mark. Can community bank PACs across U.S. band together to lobby for regulatory divisions (akin to tax brackets) with Dodd-Frank and Volcker legislation? Big banks are the influencers, but there are enough community banks nationwide to get Washington’s attention.

    • Mike,

      Thanks for following my blog and your thoughtful analysis of this issue. ICBA and often ABA both attempt to influence the regulators. Since regulators only have to please the administration and are not subject to voter scrutiny, it is much more difficult to “lobby” them.

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