Once Bitten, Twice Shy

Top of mind among anti-money laundering professionals is the “de-risking” trend in which financial institutions drop entire categories of business customers perceived to pose excess risk, such as money transmitters or third-party payment processors.

But less noticeable is how de-risking by larger financial institutions can spread more risk throughout the financial sector. After all, a money services business needs access to the financial system to survive; if it gets turned away by a big bank, it will try to find an easier access point.

Brian Wimpling, SVP and compliance chief at the Tallahassee, Fla.-based Capital City Bank, a $2.6 billion bank with branches mainly in northern Florida and southern Georgia, has “absolutely” noticed an uptick in inquiries from MSBs in the last few years. Continue reading “Once Bitten, Twice Shy”

How Bank Culture Drives Success

Two years ago, Adam Grant became famous with a very big idea: that generosity toward others gets you farther in business than selfishness. Grant’s basic argument is simple: There are three kinds of people in the world, givers, takers and matchers (those whose dominant style is determined by whether they’re dealing with a giver or a taker). Crude intuition suggests that in a cutthroat world, takers get ahead. Grant marshals evidence from psychology and behavioral economics to suggest that on the whole, givers have an advantage—especially over the long run, when true colors eventually show.

At just 31 years old—already the youngest-tenured and highest-rated professor at the University of Pennsylvania’s Wharton School and an instructor at ABA’s Stonier Graduate School of Banking—Grant published Give and Take: Why Helping Others Drives Our Success to wide acclaim. Continue reading “How Bank Culture Drives Success”

The Birth of the American Bankers Association

A massive construction bubble, driven both by speculative investments and government subsidies. Investment houses with excessive leverage in that very same construction bubble. A stock market crash, a spike in unemployment, global panic, a wave of domestic bank failures and resounding political consequences.

If this scenario recalls to you the past several years, then you’ll well understand the drama into which the American Bankers Association was born in 1875.

The construction bubble had been in railroads, whose growth had been jumpstarted by the completion of the first transcontinental line in 1863 and the need for rebuilding after the Civil War. From 1868 to 1873, more than 30,000 miles of new track were laid, and speculators piled into railroad stocks.

Continue reading “The Birth of the American Bankers Association”

Back to Bill

Bill Daniels was never one to back down from a fight. As a scrappy, undisciplined youth, he may have even picked a few of those fights. In high school, as a Golden Gloves state boxing champion, he learned how to fight fair and square. And later in his life—after years spent as a naval combat pilot, a cable television pioneer in an industry that battled many times for its survival, and as a political candidate bloodied more than once by the process—Daniels proved that he knew what it meant to fight for a cause he believed in.

Perhaps no fight was as important to Daniels as the cause of freedom. Twice he put his life on the line in defense of freedom, first against fascism, then against communism, in the Second World War and again in the Korean conflict. Continue reading “Back to Bill”

Illuminated Giving

Oklahoma City
“It’s been banned; it’s been burned,” says Steve Green. “It’s been loved and hated. It’s the best-selling book of all time, the most-translated book of all time, and, I think, the most important book of all time.” He is referring, of course, to the Bible.

Green is president of Hobby Lobby, a nationwide chain of arts-and-crafts stores founded by his father, David. The Good Book informs his family’s business and inspires their philanthropy. It is also the centerpiece of their latest charitable project: the creation of the country’s first museum devoted to telling the story of how the Bible came to be, recounting its effects on the world, and relating its message. Continue reading “Illuminated Giving”

Duke of Carolina

As a cardinal flies, it’s only three miles from a modest tobacco farm near Ellerbe Creek to the campus of Duke University. Today, a traveler can cover the distance in about 10 minutes, entirely within the city limits of Durham, North Carolina.

That otherwise unremarkable distance marks the journey of James B. Duke. Born on a small homestead, and interred in the chapel of the university that bears his name, Duke was a man of the Carolinas.

No matter what else he became, James B. Duke remained a man of the Carolinas. Continue reading “Duke of Carolina”

Liberty Fund

It was always a mistake to tell Pierre F. Goodrich you were too busy to read. “What are you doing,” he would reply, “between midnight and 2:00 a.m.?”

Goodrich himself spent the wee hours buried deep in books, engrossed in philosophy. When he had an idea or was intrigued by a passage, he would pick up the phone and call a friend, no matter the hour.

“Pierre Goodrich was not an easy person to understand,” says T. Alan Russell, who worked closely with him. Goodrich had an intense devotion to the life of the mind, going so far as to bring along a suitcase full of books on his honeymoon. Continue reading “Liberty Fund”

Why You Hate to Fly

Airline complaint one-upmanship is an old standby of small talk—“You had to wait six hours at the gate? That’s nothing! I was wedged between two linebackers and the in-flight movie was the latest from Larry the Cable Guy.” But is air travel really this bad? Travelers seem to think so. One measure finds that customer satisfaction with airlines is at its lowest point in three years; and the 2008 Airline Quality Rating, an aggregation of consumer complaints to the Department of Transportation, reports that complaints were up 60 percent since 2007.

Airlines seem to give travelers fewer reasons to smile. By mid-2008, many airlines had begun aggressive campaigns to bring in more cash through fees. Several airlines devalued their frequent flier miles, hiked the fees to book a “free” ticket, and started charging for checked baggage. New fees were added so fast that Southwest Airlines began running ads touting the fact that they merely had not added any fees.

And if the fees weren’t enough, fares are rising as airlines follow through on promised capacity cuts, trimming routes and frequencies. With fewer seats, passengers have fewer options and face higher fares to match record jet fuel prices.

But it’s not just the airlines. Continue reading “Why You Hate to Fly”

The Economy of God

Everywhere in the United States, people have more consumer choice in their exercise of religion than they do in almost any other sector of the economy. Individual parish churches, regardless of denominational affiliation, function as independent contractors of salvation in America’s religious free market. Christianity in the United States is dynamic, and American church history is littered with the relics and ruins of denominational change and theological innovation.

The brewing schism in the Episcopal Church, for example, should surprise no one familiar with the workings of America’s religious free market. Continue reading “The Economy of God”

The Ties that Bind

Attire, for whatever reason, has always been a favorite frontier for young people to battle the norms of their elders. At my Memphis high school, the boys once objected to the neckties we were made to wear: to their constriction, to their formality, and, most of all, to their impracticality. We raised the great rallying cry of modernity, “They’re not good for anything!” One of our teachers gamely played along.

The uselessness of the necktie is its virtue, he said. It gives us not only the obvious, an appreciation for ornament, but also something far more valuable: a way of expressing our human character that is not explained by our immediate needs or wants. Continue reading “The Ties that Bind”