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George Mason University professor Anthony Sanders says increasing regulation on banks has opened the door for non-traditional lenders.
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I think you don't plant.
Well attention shoppers mortgages.
Are being stalled in aisle five seriously banks are continuing to make things tough refinancings -- costs -- And other retailers like Wal-Mart are stepping -- to -- people loans.
Give the lines of credit even business loans are being -- professor of finance at George Mason University Anthony Sanders.
Banks have nobody to blame but themselves for all of us and it'd take for being here.
Obviously consumer groups advocate groups are up in arms about this they say that regulation needs to come down on these retailers are without -- -- -- this now.
Well the answer is is this is a classic example of Adam Smith's invisible hand.
We went through put through the Dodd-Frank legislation created -- Consumer Financial Protection Bureau.
All of which to tighten down all the stuff and what happens.
The market will find a way and they did they go to Costco Wal-Mart.
They set up loans construction loans small business loans.
Mortgage refinancing.
Probably not originations but borrowers refinance it but that that's that's that's very typical because a lot of the small mid tier banks -- Really harmed by Dodd-Frank and they haven't taken that language other legislation.
So -- there -- entering into the fray right teaming up with some of these retailers.
While this is an example of -- let me give an example of why the retailers think this is a great idea what's its profit motives obviously the CFO Wal-Mart himself so look we want everybody to come at a Wal-Mart and do one stop shopping Albert you know they tried it to create a bank.
That ended back in 2007 net -- they they abandoned because of Washington but Wal-Mart example -- 25% other customers don't even have bank accounts.
So the concern on the consumer advocates side is -- that they're gonna be launching these huge fees against these customers and that's unfair practice.
I'll let me point out something the Consumer Financial Protection Bureau and Dodd-Frank.
Both of sort of strong Rand gold fees so you can't charge these fees.
So what happens there's -- panic after what part -- is my question American Idol last year retailers that's it from an -- Will city not yet but again I predict legislation coming out now out of the house -- of the senate where the gonna try to stick.
Wal-Mart under some sort of consumer -- next financial protection bureau control which again but isn't consumers who are willing to pay the points.
Are willing to pay the price this to get the loan and it's easier.
What what why are we forcing this to happen in the banking sector.
Well I didn't the banks have their own problems obviously as you mentioned with Dodd-Frank which is now you know sentenced on the vocal role we shall see.
But at the same time you know it it really if Wal-Mart is going to cater of his customers and give them -- This is the same company that was denied.
A banking bank license and other what they had to give the bank license is that what's gonna happen here.
Well again not necessarily right now they're just acting on behalf of small mid tier banks and investment groups.
I'm so they likely will probably try to come and put a halt to -- let's I hope that doesn't happen life will find away and we have to let that option be open.
But that this is -- this is the downside of having you know Dodd-Frank and consumer feedback financial protection bureau they're gonna suffocate the market.
You know what time and look you know they denied they did not in the 2007 wal -- coming back and you know that -- got that -- but now it's going to be interesting Anthony Sanders thank you very much.
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