Interview: Nessa Feddis

The people that we've talked to say that the industry --- the banking industry, the financial services industry -- is given a lot of credit for being able to control regulation by Congress. You're almost batting 1,000 percent.

Seeing what's just passed [Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009], I kind of find that to be a rather questionable conclusion.

Well, before this year, it seems like you've almost had a perfect batting average.

Back in 1988, [Congress] did pass a credit card disclosure bill [Fair Credit and Charge Card Disclosure Act]. The only bills that have come up since then, where there's been much focus, has been one back in the early 1990s or something like that, an amendment that came up on the Senate floor to cap interest rates. Right after that, the market crashed, so they didn't pursue it.

But other than that, there hasn't been a lot of attention on credit cards. It's a great product, and most people manage their credit card well. And it's a reflection of that more than the fact that there needed to be any attention given to it.

I guess what I'm reflecting [on] are comments that the financial services industry is one of the biggest contributors to Congress and one of the biggest lobbyists, wealthiest lobbyists, and that that's had a real effect over the years.

Members of Congress are driven by their constituents; they're driven by voters. If voters are upset, Congress acts.

So maybe you could explain how this industry that's been so successful over the years, how it works. It's based on risk-based pricing. What is that?

Risk-based pricing is basically a way of adjusting interest based on the risk of whether somebody is going to pay the loan or not repay the loan. Just as riskier drivers pay more for car insurance, people who are at greater risk of not repaying their loan pay a higher interest rate.

What it really comes down to is the nature of lending. All borrowers, to some degree, pay for the loans that aren't repaid by other borrowers in the form of interest. A lender who lends out $100 and only gets $90 back because somebody is not going to repay has to make up that difference through the interest they charge the other borrowers who do repay the loan.

So the greater the chance that somebody is not going to repay the loan, they're going to be in a pool of a group who are in the same risky category, and their interest rates are going to be higher. It allows people to charge the interest rate that's more suitable for that borrower, just as a driver who's a riskier borrower will pay more on car insurance. ...

Risk-based pricing -- that sounds simple, but this industry has really gotten it down to an art.

What controls prices is really competition, because there's so much competition in credit cards, and everybody knows that. Even now, people continue to get solicitations and applications filling their mailboxes. And if somebody is dissatisfied by their rate or they think that they deserve a lower rate, they have lots of options. You're not married to your credit card. It's very easy to move to another competitor, and that's what keeps credit card companies charging the appropriate interest rate. ...

How big is the credit card industry, and how profitable has it been?

Right now, the credit card companies are losing money. The first quarter of 2009, they lost about $1.7 billion. We expect for those losses to continue through 2009, probably into 2010.

The government did do a very intensive study of credit card companies, including their profits, a couple of years ago. Over a 20-year period, profits were remarkably stable at about 3 percent return on assets. And what does that mean? That means if they start out with $100 at the end of the year in December, they will get back $103.

So it's been a steady, reasonable profit, but I don't think it's excessive. It's certainly less than what the food and drug [companies] make, and even what the automobile industry has been making. ...

... [Consumer credit expert] Robert McKinley told us that over the years, the credit card industry has been like the Wild West; that it basically became an industry that was out of control.

Most people manage their credit card well, and most people value their credit card. It's something they use on a daily basis and something they value on a daily basis. There are some people who found their interest rates increase because over time, people's credit profile, their finances change, and they may have found their interest rate go up because of that change in risk. But most people manage their credit well, and there's a lot of competition. ...

And from the ABA's point of view, the current state of regulation of credit cards and consumer lending in general, with the Federal Reserve involved and sort of an alphabet soup of agencies like the OTS [Office of Thrift Supervision] and the FDIC [Federal Deposit Insurance Corp.] or the OCC [Office of the Comptroller of the Currency], that's worked well? That's considered to be a successful model?

As I said, most people manage their credit cards well, and that is a reflection on an industry that works.

But the federal regulators, the sort of potpourri of different alphabet soup of agencies, that's worked really well?

The Federal Reserve has the primary jurisdiction for the rule making for credit cards. Several years ago, they began to update the disclosure, so there was a little bit of lag. The disclosures were dated, so the Federal Reserve ... has updated the disclosures. ...

But the OCC has the jurisdiction. The FDIC and the OTS don't really have that much authority over credit card companies. It's primarily the OCC. And a lot goes on behind the scenes with the OCC -- you have to talk to them. But yes, they don't necessarily go over it with a hammer; it's a little bit more subtle than that. But there were many practices that they addressed. It wasn't something that necessarily made it into the press.

But they have guidelines, which is sort of like your mother's suggestion: You'd better do it or have a good reason not to. And things like zero percent balance transfers, they put rules around that. So it was regulated. It was more subtle than what people understood, and it wasn't as public as people thought. ...

Do you really understand that contract that comes in the mail with your credit card?

Well, that's not really what people rely on. The teachable moment is the application. And since 1988, every application has had to include a summary box of the primary important terms. And that's what people rely on when they make a decision on what credit card to select.

One thing I will add, though. Much of the information in the contracts relates to federally required information. For example, there are requirements to disclose important consumer protections: what to do when your card gets lost and stolen. That takes space. It's important information. ...

So you're saying that, to you, the documents that are sent out with these credit cards over the years were quite clear and people could figure them out?

I think for the most part, the information on the application got dated, so in recent years it was --

Dated? What does "dated" mean?

Well, because the information on the application, the summary box was based on language that Congress put into place in 1988; we're now 20 years later. The consumers evolved; credit cards evolved. Those disclosures are dated.

There are many different solicitations that come in the mail, and they say, "Zero percent," and there's an asterisk, and then if you look down below, it says, "Transfer fee," you know? ...

It's funny you raise the idea of the zero percent transfer. That was one of the ones that the OCC adopted guidelines on to ensure that the zero percent balance transfer, for example, has to be in close proximity to what the rate will go to when it expires. So that's an example of when the OCC did step in. ...

Were you surprised this past spring when the Banking Committee reported out its legislation related to credit cards, that that got through committee? What was your reaction when that happened?

It was a little unusual sequence of events, because usually Congress passes laws, and then the regulators adopt rules. In this case, the regulators adopted rules, and then Congress acted, so in that sense, it was a bit surprising.

Do you remember your reaction when you heard that it got through committee? It only got through by one vote, as I understand it, through the Senate committee.

I don't remember. Again, given the makeup of the committee, we weren't surprised that it got over by one vote.

You weren't? Why? If people valued their credit cards for so long and they were so useful, and the regulation has been effective, as you described, how do you explain this legislative loss, if you will?

Even though most cardholders manage their credit well and understand how their credit card works, you do have a vulnerable group who was confused. And that's what Congress was addressing, and that's what was getting all the attention. There were a lot of anecdotes out there, and it's very tempting to use those anecdotes as though they're representative. ...

So you really weren't surprised when this passed first out of the committee?

... Early in the following year, Congressman [Barney] Frank [D-Mass.] made it very clear he planned to pass a bill. And you just don't disregard something that the chairman of the House Financial Services says he's going to do.

And the president of the United States convened representatives of the credit card industry in the White House, right? That had never happened before.

That was toward the tail end of the process. I think by that time we knew there was going to be a bill. I mean, by that stage, everything was already sort of in order. ...

What changed?

Obviously the election changed an awful lot. You had very big changes in the House and the Senate and a change in the White House.

And a change in the economy.

I don't know whether that was so much the situation, because credit card companies and credit cardholders were doing fairly well in the early part of the economic turndown. It really wasn't until the latter part of 2008 that the credit card companies began to suffer, and that was because of the unexpected double-digit unemployment. So I don't know that it was so much the economy as it was so much the elections.

And double-digit unemployment, which is part of the economy, mirrors the default rate with credit cards, right?

Absolutely. They follow each other very closely. And that's because [it's after] the first bill -- not even the first loan -- that people stop paying.

You were saying that the way risk-based pricing works is it's based upon the ability of people to pay back the loan. But there are many people who believe that the whole industry is based on the idea that you don't want people ever to pay it back, because you make a lot more money if they keep paying. Let me tell you what [Self-Help Credit Union CEO] Martin Eakes -- whose name I'm sure you know -- said to us. He said what risk-based pricing and democratized credit really means "is that we want to provide debt to people who we know cannot pay it back. It's a fraud. You're therefore keeping people in debt forever because they can't pay it off. ..."

It makes no sense for a bank that wishes to stay in business to lend out money that its customers can't repay. It doesn't help their customer, and it doesn't help them.

Doesn't it help the bank's bottom line for someone to pay back a lot more than what they originally borrowed?

If they're going to struggle to repay that loan, it doesn't help the bank.

Then how do you account for their profits over the years, if most of their profits came from the people who were paying the highest interest rates and the most fees?

Card companies rely on a variety of different cardholders in their portfolios. On one end of the spectrum there are people who are at high risk of not repaying their loan, and that means they're in a group where the losses are going to be higher. For that reason, the interest is higher for the people in that category. If losses aren't as high, the returns will be higher.

At the other end of the spectrum there are people who are at very low risk. They are very likely to repay their loan. They're in a group where their losses are going to be low. And that means ... their prices are going to be lower, and their returns may not be as high. They're steady, but they may be more modest. And then you've got everything in between.

And cardholders will balance their portfolios much as anybody might balance their 401(k) with regard to risks. And depending on the strategy of each individual cardholder, they'll have different percentages among the various categories of customers.

Before we get to the proposed agency, what are the consequences of the legislation that has been passed for the consumer?

Congress understood when they adopted the rule that credit cards would be more difficult to get, limits would be lower, and interest rates would be higher for everyone. But they made the decision that that result was an acceptable consequence, an acceptable trade-off, for the sake of the consumers. ...

Even before Aug. 20, when some of the rules went into effect, interest rates were being raised. People were feeling the pinch in the wake of this legislation.

... You saw that in the press, but in fact the data didn't support that. Interest rates for existing customers went up a bit, about a point, in the 12-month period ending in May -- and that's from the Federal Reserve -- of what people actually pay.

So interest rates on existing customers didn't really go up in anticipation of the Aug. 20 new regulation. What we are seeing is that new accounts will be more expensive. And again, Congress understood that that would be the result.

So we can expect tighter and tighter lending?

Between the new rules and the economy, we expect that it will be harder for people to get credit cards. ...

One of the people we interviewed said that, in fact, it is the economy that's affecting all of this and that the legislation is really just piling on.

It's both, and it's hard to tease exactly what proportion, but there's no question that the new rules make it more difficult to adjust to changes in the economy, to changes in customers' financial situations and their credit profile. That means those risks, which are really costs, have to be spread across to everyone.

It also means that the inability to be able to make those adjustments means that people will find it harder to get credit cards, but also that they will lower the limits, because they have to manage the risk.

There's a reaction that we got from a number of people that here's the credit card industry, the banking industry, which is in part in business because of taxpayers. For instance, the taxpayers are buying the securities that this money is lent out from, right? The securitization is being financed by the Treasury. And here you are, still lobbying Congress and squeezing the consumers all at the same time.

Well, at this point the money from the government was something the banks did not want. They were "encouraged" to take the money for the sake of the economy. They have repaid it.

The current Treasury program to buy lending instruments, securities, to help finance the credit card industry is something the banking industry doesn't want?

I don't know that I can talk about the difference between CPP [Capital Purchase Program] and TARP [Troubled Asset Relief Program]. But we do know that the banks have repaid much of that money with a return of about 16 percent, and that's a pretty good return in this day and age.

What's the American Bankers Association's position on the Consumer Financial Protection Agency [CFPA]?

Quite simply, it's unnecessary; it's going to delay needed improvements; it's going to limit people's choices; and it's going to be very costly. We think that you can accomplish the improvements needed by fixing what needs to be fixed. It's not necessary to create one more duplicative, costly bureaucracy, because at the end of the day, one way or the other, consumers pay. ...

What the proponents of the Consumer Financial Protection Agency say is that this will be a taxpayer-financed consumer agency taking care of the needs of consumers. That hasn't happened yet to this date, because the agencies that are primarily responsible are really concerned about the safety and soundness of the banks, not what's going on with their customers.

I guess what you're saying is that then customers and consumers are going to pay for this very costly duplicative agency. That's what it sounds like you're saying.

Well, taxpayers are going to pay for it.

One way or the other, customers are going to pay. Consumers are going to pay either directly or indirectly.

And if their rights are protected, if they're not gouged, if they feel that it's a fair agency that actually takes care of their problems, what's the matter with that?

All the issues that this agency is intended to address can easily be addressed by improving the effectiveness of the existing agencies. It's not necessary to reinvent the wheel. Fix what needs to be fixed.

So the position is that the agencies have actually done a good job over the last 20 years regulating the credit card industry, and we don't need a new agency to take care of what's happened?

In fact, we've seen that Congress and the regulators have addressed the credit card issue, and so arguably, no, an agency is not needed; it's already been done. All the issues have been addressed on the credit cards. The mortgage issues are being addressed, and so mortgage and credit card will have already been addressed.

Let me read to you what one observer said: "Congress had the chance to do much more meaningful credit card legislation, and Congress focused on a few really egregious practices. The problem is that just saying you can't do bad practices A, B and C doesn't stop the card industry from coming up with new practices D, E and F."

Or, as he put it, "It's like Whack-A-Mole; that your industry is smart enough to figure out ways to make money off consumers unless there's some overall agency that's watching out for the consumers."

First of all, the Federal Reserve had already reacted and addressed the primary concerns raised, and then Congress acted. So the Federal Reserve, at the signal of Congress, did respond. So it was the agency acting first and then Congress responding. ...

What's wrong with limits on interest rates? Credit unions live with an 18 percent interest rate.

History has shown that government controls, interest rate caps, don't work. It means that a lot of people who need to have loans don't get them, and it means that there are distortions in the price, and it becomes inefficient, so at the end of the day, customers pay more.

Customers pay more for belonging to a credit union?

No, they pay more if you restrict interest rates, and the interest rates don't cover the expenses. And then it pushes out someplace else, so they'll charge another fee, a transaction fee or an annual fee.

But when we looked at credit unions, for example, one in North Carolina that we looked at carefully, not only do they have an 18 percent interest rate cap, but for something like the equivalent of a payday loan, they charge only 12 percent.

... I don't know about that particular credit union, but they're probably more restrictive on who can have a credit card. And also, there may be other accounts that that person has a relationship with. By definition, a credit union is going to have other accounts with that customer, a checking account that may be subsidizing that.

That's what happened back in the years when there were state usury laws. Arkansas was one where the interest rate has historically been very low, and what they found is that very few people could get [a] credit card. But also, they tended to have to have another relationship with that institution, a checking account or a mortgage. So it subsidizes it one way or the other. You can't push down one place and not have it pop out someplace else.

You're saying that there's no logical limit to how much interest should be paid.

As I said, history has shown that when you cap interest rates, fewer people and [fewer] small businesses have access to loans, and the prices get distorted, and at the end of the day, customers pay more. ...

The ABA sees no problem with, for example, the setting of overdraft fees by banks, in terms of their ranging from $12 to $39, depending upon the bank.

Overdraft fees are intended as a penalty to encourage people to manage their checking accounts. And a nominal fee doesn't work.

A nominal fee doesn't work? … Does a $40 cup of coffee work? …

If the penalty for parking in a fire lane were $5, I think you'd find a lot of fire trucks not able to get through. The purpose of the overdraft fee is to encourage people to manage their accounts, to keep track of their spending.

And your members who will organize, for instance, debits that come in on a particular day so that the biggest debit goes first, as opposed to the number on the check or the time that it comes in, and therefore drives the rest of the debits that come in into the overdraft area, you find that to be an acceptable practice?

Customers have said that they want their important payments made. The important payments tend to be the large payments -- the mortgage, the rent -- and so --

Do you really think that they would do that if they knew they were going to then incur five overdraft fees for all kinds of other minor things?

In fact they do, because the banks have been sued for paying low to high. One of the large institutions a number of years ago got sued because it paid the low dollars first, and some high payment wasn't paid. So the payment order is something that people's preferences vary depending on the individual. And their individual preference on an individual transaction will vary depending on the nature of that transaction.

Haven't overdraft fees, particularly debit card fees, become a profit center for the banks, particularly in these hard times?

Banks make income from overdraft fees, just like they make income from any fee, and on checking accounts there are practically no fees left. The Government Accountability Office [GAO] found a couple years ago that the vast majority of banks offer free accounts. There are no fees left other than overdrafts [and] the occasional stop-payment fee.

But you know what I'm talking about. I could give you the anecdotal evidence that's all out there, you know? We found one person who was charged seven different overdraft fees in a day because he was using his debit card to pay into a parking meter.

The vast majority of people avoid overdraft fees because they're very simple to avoid.

The vast majority? Again, as we understand it statistically, about 10 percent of the people pay for 70 percent of the so-called free checking in America. Is that correct?

No. The greatest income from checking accounts is from the interest that banks make on the balances. So they make more money on the checking accounts with the higher balances than they do [on] the accounts with the low balances. The primary source of income for checking accounts is the interest they make.

Is it true that they make tens, maybe $20 billion in overdraft fees a year?

I don't know. We don't have that number.

According to the FDIC, they tell us that they make $20 billion a year.

I did see [this]. I don't remember the number. That may be. ...

When we go to talk to payday lenders, they say: "Look at our operation. We have the APR [annual percentage rate] posted right here. Everyone can see it." Go to the bank, and when somebody does an overdraft, which is in some ways a bank version of a payday lending operation, there's nothing posted. It's not covered by Truth in Lending. Why is that?

Well, because you'd end up with a ridiculous result, because if you applied an APR to an overdraft, the APR would be higher the sooner the customer paid it off. That would be a very confusing message.

Well, it would be in the thousands of percent.

No. ... I don't know if you understood what I said. If you apply an APR to an overdraft, ... the sooner the customer repays that overdraft, the higher the APR. If they don't pay it back immediately, the APR goes down. So they're getting the message that it's cheaper for them not to repay the overdraft as quickly. That's a very confusing message.

You mean it's impossible for the banks to tell the customer how much it would cost?

They do. They tell them: "This is the fee. If you overdraw, it's X dollars." You cannot know in advance how long the person is going to take before they repay their loan. You cannot know in advance what the amount is going to be. So you can't do a calculation up front. That's impossible.

It sounds to me [like] one of the confusing parts of all this is when it's a credit card, we get this agreement, a contract that's almost impossible to decipher. We've had law professors say they don't understand it. On the other hand, when we went to find out about debit card fees, we're told: "Well, this is not a contract. In fact, it's a noncontractual discretionary privilege." ...

The fees are disclosed. People understand it. It's been something that's been around since the beginning of checking accounts.

I actually went to the bank myself, because I didn't know if I had check overdraft or not. I had never read the disclosures. And I was told that I did. But when I asked, "Would you cover my overdraft at the ATM machine?" if I went and asked for more money than I had in my account, I was told they can't tell me because that's part of the agreement.

And then I asked: "How much would you cover? How high? How far over could I go?" And they said they couldn't tell me that either. So it sounds like a game with cards. On the one hand, it's a contract that I can't understand, and on the other hand there is no contract, and they can't tell me how much money is involved.

Banks have been paying overdrafts on checking accounts since the beginning of checking accounts. It's been a discretionary basis, an accommodation to their customers on the basis that they want transactions paid. All this is a modern version of it based on an automated system so that it is more uniform; it's more fair. It's not that you have to know somebody at the bank for them to ensure that your payments are made even though you don't have money in the account.

My understanding is that five years ago, 80 percent of your members [were] denied transactions with debit cards when there weren't sufficient funds in the account. And now it's reversed: Eighty percent now do cover the withdrawal and/or the debit, but then they charge the fee.

Debit cards have somewhat replaced checks. People want their transactions paid. If they've just finished a meal at a restaurant, they want the transaction to go through, and that's what the banks are responding to.

Without asking them. You're not asked; they just do it.

It has to be disclosed in the original agreement that we may reserve the right to go ahead and pay transactions that you've authorized. ...

Or not. "It's up to us."

Or not. But traditionally, all banks have paid overdrafts. Most banks have paid overdrafts on a discretionary basis. That's been around since checking accounts have been around.

So it's a privilege; it's [at the] discretion of the bank.

It's an accommodation. ...

The complaint that led to this legislation is that the credit card industry was abusing its customers. ...

The vast majority of cardholders manage their credit well, but there was a group that was confused, and that's what Congress and the press were reacting to. ...

And those people -- how many of them are there, millions, the confused? Are those the people going bankrupt?

Most of the people who end up in bankruptcy or who end up with credit card problems, the underlying problem isn't the credit card; the underlying problem is some sort of life crisis -- a medical expense, a divorce, a job loss. And the credit card helps them bridge that gap. It gets them through the crisis. In most cases, they do make it through the crisis, but some of them don't. But the underlying problem was another life crisis, not the credit card. ...

A number of bankers complained to us about the non-banks, and one of them is the payday lenders. So we went to interview the payday lenders, and they told us check overdraft, debit card overdraft, is much more expensive than the service they offer.

Well, payday loans -- if it's just a single payday loan -- probably isn't the problem. The big problem with payday loans is people get into a cycle of debt. They start out with one loan, but then they don't repay it. They get hit with a fee. They take out another loan, and that cycle continues, and it's a downward cycle.

With overdrafts, the overdraft has to be paid immediately. And additional overdrafts over the limit are not permitted. It stops. If that overdraft isn't paid within 60 days, the account is closed. So it stops. There's no cycle. And that's really the egregious part of the payday lending. It's a cycle of debt.

But aren't the overdraft fees also a cycle? Don't most people who get one overdraft a year get two or three or four? They can get as many as they want as long as they stay in that cycle.

They don't end up having debt that they can't repay. The fact that they repay, that means it's not a cycle of debt. They have to come positive. That means the debt is paid. With payday loans, they never pay it off. It's an unending debt. That's not true with overdrafts. ...

Payday lenders say in most states they are forced to have one loan at a time. Now, they can't stop somebody from going to another payday lender, but one payday lender can only give one person one loan until that's paid off.

Right. But then they come in, and they have to get another loan, and all the other fees are added on, and they come in the next month, and they do the same thing. And pretty soon you've got a pretty big debt that the customer can't pay it off.

And that's not true for overdrafts. Once the customer has an overdraft, they're required to bring that balance into a positive status immediately. If they don't do it within 60 days, the account is closed. There are no more loans. There's no cycle of debt. The debt is gone.

I believe Bank of America, at least, will give you seven overdraft fees in one day before you pay anything off.

But you have to pay it off, and if you don't, then the account is closed. You don't get more overdrafts. The account is closed. Within 60 days it stops. It's not a cycle of debt. ...

Sen. [Chris] Dodd [D-Conn.] and others have said to us, "The industry got arrogant." You started using all these practices that created this problem. ...

Well, once Congress and the regulators identified the problems, they've addressed it, and the industry is moving on. End of story.

One of the things that surprised me ... is so many of the people that we've interviewed -- consumer lending advocates, bank officials, many government officials -- have said to us, "Disclosure doesn't work."

I think people are smarter than that. That's interesting you bring that up, because if there's a vulnerable segment that needs extra protection, there are two ways you can address that. You can limit everybody to the kind of product that the least sophisticated customer can manage and select, or you can try to identify that vulnerable group and protect them and then allow everyone else to continue to have the flexibility and choice of what they want in their financial product.

But the products in this case are really not substantially different. They provide you with cash. They're convenient. It's a piece of plastic; you don't need to carry around a lot of cash with you.

That's huge value.

There are all kinds of great utility value, but it's sold on the basis of what kind of picture is on the card, what kind of points you get, what kind of rewards you might get, a zero percent come-on, all kinds of different things. And you don't think that's confusing to people, that that's why this is happening?

No-frills basic credit cards are provided by large institutions and small institutions. They're widely available, and many customers are perfectly happy with them. Other people want the perks. They want the rewards. They like the car rental insurance, and they have that choice. If there is a group that is more vulnerable and needs extra protection, then let's provide them that protection, but allow other people who like the perks to have that option.

But nobody in any of the things that we've read about this Consumer Financial Protection Agency or otherwise is saying: "Don't offer that. Just make sure everyone has a chance to get what they call a 'plain vanilla' product."

... Under this agency, it's not just that people will have fewer choices; they will practically have no choice.

The cornerstone of the proposal is to require this agency to design a government product based on what the least sophisticated customer might be able to handle. And everybody will get the same cookie-cutter, one-size-fits-all checking account, credit card account or mortgage loan.

And the agency may require not just that the entity offer the product, but they promote it as a superior product. And any entity who wants to offer something else takes a great risk of substantial penalty that down the road, with 20/20 hindsight, somebody is going to say, "That wasn't suitable; that was too confusing." So there's not going to be a lot of incentive to offer something other than the government-designed product.

Are you against safety rules?

No. But if this agency had been in effect 30 years ago, 40 years ago, we wouldn't have ATMs, we wouldn't have debit cards and online banking, because the basic program, the basic checking account that everybody could have, would be one that's accessible only by checks. And offering something beyond that, like a debit card, which would have been unfamiliar initially, would have been too risky.

There are ATM cards, there are ATM machines, there are checking accounts and all of these financial conveniences in plastic in countries that never had a credit card system like ours.

I'm talking about the agency, the power of this agency to basically get us stuck in 2009. Like your consumer products now, because they're not going to get better. There's not going to be anything new.