Banking Law

ContraBanker's cranky, and his ire is directed at both sides of the management-regulatory divide.

I live in western Colorado. At certain times of the year migrating deer and elk can make our highways look like lunch time on Times Square. If you could put a suit and tie on the animals, that startled, stunned look in the headlights would be a perfect approximation of bankers and regulators alike right now.

He segregates the community banking universe into three categories: good banker, bad banker, and "the regulator," a label that doesn't need an adjective designating moral quality, because everyone knows that "a regulator" is the moral equivalent of Charles Manson on a bad acid trip.

When a rookie becomes a bank regulator there are two standard issues of equipment: a laptop and a prayer wheel. The latter is spun constantly for the next umpteen years and each revolutions says "I gotta keep my job". These are perilous times for regulators, witness the criticism in the wake of Countrywide, Indymac Bank and WAMU. The profession has learned from these debacles:

• No Regulator ever got fired for being too tough.
• If I don't make a decision, I can't be faulted for making a bad decision.
• We let too many people in banking. If, now, we don't let any people in the club, we won't have bad people.

There's a ton of private capital out there that could, and would, relieve a lot of pressure on the hapless taxpayer, but the FDIC has made it too difficult for private money to help. What the heck: do nothing, and nothing will happen, and that prayer wheel can go on spinning.

Now, that's some mighty fine snark he just laid down, ladies and gentlemen. Savor it for a moment as you sip your morning cup of Joe, inhale that last quarter-inch of your roach clip, and get ready to jump back into bed, pull the covers over your head, and "go all Rumpelstilskin on us" for the next 20 years or so until this banking mess blows on by.

Lest you think Pat is being "unfair and unbalanced," however, he's equally disgusted with bankers of all stripes. These are unprecedented times (at least unprecedented in the lifetimes of the post-WW II generations), and no one group seems to be able to rise above their inherent limitations and save us all from ourselves. Unlike bank lawyers, of course, who bestride the moral universe as a colossus. Yes I know, that's as a colossus of venality, bile, and "bad bidness," so let's not go there.

Hey, Pat, no one ever said working as or for bankers was a great big barrel of laughs, did they? Cheer up: we've got 2315 pages of the new banking reform legislation to digest, and after we cram that down our gullets, we'll wake up and realize that we've all been "saved."

Either that, or we'll be reaching for the Tums. Or the roach clip.