Thursday, June 12, 2014

Baby Sitting the Banks

Like always, an epiphany struck when I was innocently sitting at my bar in my town.  I don't control when these things happen, but it did, and now I'm forced to document said epiphany before I forget.

Rewind about 3 years ago where I was in the dumbest state of the union, Wyoming.  There as an "assistant vice president" working at what was then MATHEMATICALLY AND FACTUALLY the second worst bank in the state, I entertained degenerate applicant after degenerate applicant looking to steal "borrow" money from the fed our beloved shareholders.

One guy wanted a truck equity loan.
Another wanted a home equity loan on his tetanus-infested trailer.
A third tried to pass on a fake check
And let's not forget Casper's finest citizen asking me for a "Gas loan" so he could drive to Denver to visit his "grandson who was in the hospital."

I was in the midst of it and didn't realize it, but the fact the bank I worked for had such a bad reputation that banks were sending literal bums to us should have told me that management was so desperate and so inept that we were entertaining such idiocy as "truck equity loans" and making loans to trailer trash.  But add another factor I didn't realize until now because I was in the thick of it.

OCC compliance.

When I moved to the company's "headquarters" my job went from commercial lending to one of federal compliance.  The bank was so shittacularly managed before that they were now under audit and had the federal regulators down their throats.  And so I got to see, upfront and personal, each and every new regulation, requirement, dictate and demand that came from the authorities.

At first I was angry at these regulations.  They were petty, idiotic, and so time consuming they made it so the bank could not be profitable.  We had to do monthly updates on our "problem loans."  We had to write reports proving to the feds that we were actively working on dealing with our problem loans.  I had to fill out 13 pages of paperwork to get the taxpayer (that's you) guarantee on loans we made to Bubba the Incestuous Trailer Trash Hick on his Goat-Screwing farm.  And that's just a fraction of needless time-consuming hurdles we had to deal with.  But so petty and onerous were the regulations, I was convinced they were doing it out of spite.  That way up top of these various departments were leftists, democrat types that wanted to "stick it to the banks," and that's what I was thoroughly convinced of.

But then I got to thinking as I look at the now polished off tumbler glass of Rumpleminze and reminisce about Screwyourcousining Wyoming.

The feds weren't being the typical "inefficient" government bureaucracy unconscious of their crippling regulations.

And the feds weren't being vindictive ideologues punishing those "evil bankers."

The feds were actually 100% completely right in doing what they were doing.

They were baby sitting what was once an incompetent and piss-poorly managed bank.

Naturally the old guard was fired and replaced with a turn around team. This team was focused on getting out from underneath the federal regulators with the sole goal of becoming a state chartered bank allowing them to have a shot at being profitable (though lending to trailer trash, Goat Screwing Farms, and the burgeoning Teenage Single Parent market will likely prove that difficult).  But none of that changed what the federal regulators had to deal with.

View it from the regulators' eyes.

You had the largest financial crisis since the Great Depression caused by the most galactically stupid bankers in the history of the world.  These bankers and the management of the banks were SOOOOO incomprehensibly inept that they were literally like dealing with children.  The only problem is these "children" were at the vital cross-roads of the US economy and that was the banking system.  The lifeblood of this or any other economy was being ran by the most idiotic incompetents in the world.  Soon enough, their reckless lending came to roost and when their idiocy was exposed either through audits or the news, the feds had to have been saying circa 2008

"Who the fuck is in charge of this operation?  What the fuck is going on?  How dumb can you possibly get?"

And naturally, the consequence was one where a house full of feral children ultimately come to heel - through a tyrannical, powerful, heavy handed disciplinarian.

In the end, the petty regulations, the constant updates, and all the seemingly pointless requirements regulators were (and still are) forcing on banks were not out of malice, pettiness or politics.  But rather necessity because of the unrivalled incompetence and stupidity of bankers and the banking industry.  And the fact for once I actually agree with federal regulations and regulators, crippling and choking off our financial services industry, is a testament to the true ineptitude of those genuine USDA 100% fucktards currently in charge of our banking system today.


Phil Galt said...

Hold it….lets back up a moment.

I am not disagreeing with you, especially in terms of incompetence of the people in charge. I fact, I heartily agree with you. I am asking “Why?”

I saw similar behavior in the tech industry, where similarly incompetent managers would knowingly send untested and non-working product out the doors on a fairly regular basis. How could they NOT know that the equipment would come back while simultaneously turning our name into an obscenity in tech circles?

Were the managers REALLY that stupid? Or was there some other motivation I’m not seeing?

Matt said...

I just discovered you and your work courtesy of the Hinderaker-Ward experience. As a discarded employee of the number-one bailout baby, I hereby endorse everything you have to say about our financial system.
But having lived in both places, I can assure you that the inhabitants of Manhattan are not one bit less degenerate, stupid or greedy than the people of Wyoming.

Anonymous said...

Couldn't you let the bank go broke? I imagine it was a relatively small bank and if that is the case shouldn't people who are equity and debt holders suffer from lending to/owning such an incompetent institution?

Anonymous said...

Growing up, I always assumed that adults were more mature or competent. I had the sneaking suspicion that many might be mentally and emotionally children though. I'm in my 30s now and I just chuckle at this concept of adulthood these days. That suspicion I had as a kid has proven to be the norm. Adults are usually just stupid fucking children whose bodies just got bigger and older. I for one applaud the pain the baby sitting regulators sometimes inflict on the stupid. Pain is often the only way to fucking get through to dumb asses.

Kristophr said...

I'm sure the Goat Screwing Ranch owner could easily get state funds to relocate to New York, these days.