SVB Failure Starts Aggressive Regulation Talk in Washington, IMBs Take NoteA Brief Word About COVID-19 and Depression

May 23, 2020
It did not take long after the Silicon Valley Bank failure for politicians in Washington to rush to the next available microphone and lament the “loosening of bank regulations”. Instinctively the finger pointing began, and in many quarters ended up in the direction of the prior administration’s policy to generally roll back stringent business regulations and allow free market decisions to govern various industries. Chief among the complainants (no pun intended) was Sen Elizabeth Warren, who emerged out of the 2008 crisis as an architect and advocate for the Wall Street Reform Act and the creation of the vaunted Consumer Financial Protection Bureau ( CFPB), which she briefly directed. Just yesterday in DC’s The Hill publication, Sen Warren was reported as blaming the the collapse of Silicon Valley Bank on Republicans in Congress, which in 2018 helped pass a law to ease bank regulations put in place following the 2008 financial crisis. “No one should be mistaken about what unfolded over the past few days in the U.S. banking system: These recent bank failures are the direct result of leaders in Washington weakening the financial rules,” Warren is quoted as saying. According to The Hill piece, Warren, who voted against the 2018 bank deregulation bill, said that the crises would have been avoided if the banks were required to hold more liquid assets because the bill exempted banks with less than $250 billion in assets from rigorous Fed stress tests. Warren and other Democrats say the old rules could have caught the issues at SVB sooner. Given that politicians generally “never let a crisis go to waste,” many now suspect that the banking industry is about to be slammed with heightened regulatory scrutiny, tighter operational rules, more audits and exams, and larger and very public fines, penalties and consent orders. What does this mean for independent mortgage bankers (IMBs)? It means that they have to get back to the compliance mindset they were frightened into adopting between 2008 and 2018, and before the bottoming out of interest rates led everyone to believe that easy money was here to stay and that self-regulation meant hiring more loan officers. Keep those risk management officers and compliance directors close by folks, we are all in for a bumpy ride on the regulatory

This blog normally focuses on mortgage industry issues relating to fraud.  Today, however, I wanted to talk about an issue that is more personal and near to my heart, knowing some close friends who are dealing with severe anxiety and depression during these times.  They call their difficult days “COVID down days.”

COVID “down” day is a day you wake up and cannot seem to overcome the anxiety caused by another day in “lock-down.” It is the fear of even traveling outside your home with with mask and gloves because who knows if that will prevent the disease from infecting you or your loved ones. It’s the sadness of not being able to see friends, family, acquaintances and missing significant events such as weddings, graduations, birthdays and anniversaries. It is the sinking feeling that this crisis may never end, and that it will simply go up and down like a roller coaster and you will never feel safe anymore. It is confusion over statements from “experts” who say one thing one day (masks good) and the opposite another day (masks bad). It is concern that life will never be “normal” again and that “new normal” is not something you can accept.

If you or anyone you know has any or all of these feelings you are not alone. Depression and anxiety are real emotions felt by many people today around the world who are living life like an animal locked in a cage in a zoo. People who feel these emotions are not “crazy” or “sick.” They are experiencing real pain that requires us to be patient, loving, reassuring and supportive.

If you are feeling this way do not hide your feelings or mask them with drugs or alcohol. Reach out to your partner, a family member or a friend you can trust and talk it out. Talking heals. Hugging heals. Listening heals. Kind words heal. 

If you are a person of faith (and even if you are not) consider taking out a Bible and reading some passages that offer comfort, such as John 14:1-7, 27; Isaiah 43:1-3; 2 Corinthians 4:8, 9 16-18; 1 Peter 5:7-11; Psalm 46; Psalm 28:7; and Psalm 91:1-8. Reading these words you will soon realize that you are blessed and loved by God. Don’t let your heart be troubled, for He is with you and will never forsake you. Trust Him and take your cares to Him and your prayers will be heard.


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