Better Markets filed a comment letter the Office of the Comptroller of the Currency (OCC) on its proposed development of an annual survey on consumer trust in banking.
Why It Matters. There is no need for a survey to discover why there is a lack of trust in banking. There will be little trust in banking until bankers stop engaging in reckless conduct like Silicon Valley Bank, stop repeatedly breaking the law like Wall Streets’ biggest banks, and stop charging excessive predatory fees like, well, almost everyone in banking. Moreover, banking regulators suffer from a well-deserved lack of trust as well, again due to the bank failures, bailouts, and contagion just months ago, as well as egregiously lawbreaking at Wells Fargo and so many other banks right under the noses of regulators. A trust survey confirming this would be waste of time and effort, particularly because there are already numerous surveys and studies that clearly show a significant lack of trust.
What We Said. While the OCC is right that public trust in the banking system and in the regulators who are supposed to oversee that system is critical, a survey is a grossly misguided and inadequate response. Rather than wasting time and resources on a survey, the OCC (and all banking agencies) must aggressively act with urgency to ensure that the banking system is safe, sound, fair, and not run by a bunch of reckless bankers and lawbreakers. The OCC and the other banking agencies need to enforce the law, revitalize supervision, strengthen capital requirements, ensure workable resolution plans, impose stressful stress tests, stop rubber stamping mergers, and make protecting consumers a priority.
Bottom Line. The banking system will deserve the trust of the American people when it more reflects the values and role of community banks rather than the megabanks on Wall Street. That will only happen when banking regulators do a better job and thereby earn the trust of the American people.
You can find the comment letter here.