Meredith Whitneys "Americas Unbanked Masses" (op-ed, Feb. 24) lamenting how new regulations have created "unbanked masses" features some muddy reasoning.
Ms. Whitney starts off stating that, "Fewer Americans have access to traditional banking services such as checking accounts, consumer loans and credit cards than they did five years ago." She offers no hard numbers, either on current absolutes or recent trends on this topic, saying only that a category of Americans numbering "one in four" seven years ago could number "one in three" in the unspecified "near future."
Just as deficiently, she never explains why she includes consumer loans and credit cards in the category of "traditional banking services" in the first place. Traditional banking is, er, traditionally speaking, checking and savings—that is, an account upon which you can draw for expenses and an account into which you can save.
Moreover, the examples she mentions in "consumer loans and credit cards" are aggressive even within these categories. She must be the only person in America, for example, who is worried that not enough people are taking out second mortgages or signing up for high-interest credit cards.
Leaving aside continued problems on the supply-side (lending), there are sound reasons for these pullbacks on the demand side (borrowing). Perhaps potential borrowers who have observed what has happened to house values in the past six years have realized that it is prudent to build equity up in their homes rather than tear it down, and perhaps people who have borrowed too much via revolving credit have decided not to borrow so much.
I am utterly confused. I have been repeatedly informed that greedy bankers spend much of their day overcharging the poor. Now, Ms. Whitney explains that the poor have no banking relationships at all. Of course, these very same bankers are to blame for this as well.
Original Source: http://online.wsj.com/article/SB10001424052970203753704577253832536195626.html?mod=ITP_opinion_1