Let's hope we are very far from a Fair Lending equivalent for deposits. If it goes in that direction, it would be another burdensome mine field meant to help consumers, but would end up hurting the very group it's meant to help. It would also hasten the disappearance of community banks. With that happening already at a rate of almost one every business day, I think that goal is already covered.
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In a recent discussion elsewhere, there was a question about regulators claiming UDAAP for granting deposit pricing exceptions. When it comes to unfair and deceptive, I am curious how any bank could be challenged on this by regulators while the FDIC itself simultaneously publically posts that as of January 21, 2019 the average 6-month CD rate across the U.S. is 0.36%. https://www.fdic.gov/regulations/resources/rates/ If that were the actual average of rates available, that would mean that half of the banks would be unwilling to pay more than .36% on a 6-month CD. Yet in reality, you would be hard-pressed to find a single bank that would be unwilling to pay more than .36% since they could risklessly invest those deposit funds in overnight fed funds with more than a 200 basis point profit! With so many ways in which depositors can discover pricing options for their deposits and the regulatory agencies themselves reporting such narrow statistics about what is available, it seems to me that we are far from a Fair Lending equivalent in retail deposits. What do you think?
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Neil Stanley
TS Banking Group
Treynor, Iowa
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