The issue of not requiring banks to mark all securities positions to market is a very important one. How can it be fair to require depositors to take the risk of bank failure if the capital position of banks is essentially hidden by the relevant accounting standards? While Mr. Hill says that it would be problematic to mark the securities positions to market, but not the loan positions, isn't it better to improve some of the accounting, even if not all? Further, if the value of debt…

The moral hazard concern is significant. As the CRS report noted: 'the use of the systemic risk exception at two institutions that few previously believed were 'too big to fail'" raises many questions. What are the rules to be going forward? Regulators can attempt whatever theoretical arguments they wish as to the risks to financial stability, but, at the end of the day, the banking regulators made a choice to save certain politically connected depositors of a bank situated in a politically…

The financial regulators bemoan the fact that persons in low income communities have trouble borrowing money while at the same time villainizing entities such as payday lenders that lend money to low income individuals.  Maybe there could be some middle ground in which the regulators treat payday lending as a valuable service, but try to define with some precision activities that are actually abusive. If the regulators are going to take the view that any loan to a low income individual…

The CFPB's policy statement seems mostly reasonable and straightforward. There are, however, embedded assumptions that should be examined. First, the CFPB describes "unequal bargaining power" as potentially an indication of abuse. As a practical matter, given the legal nature of financial institution loans to consumers, the CFPB analysis appears to create a presumption (rebuttable) that all loans are abusive. Second, the CFPB appears to assert that a loan that goes into default may…