WILLIAM ISAAC’S PUBLISHED WORK

Bill Isaac has authored hundreds of articles in top publications and has frequently testified before Congress.

RECENT PUBLISHED WORK

columns from William Isaac in top financial publications

WILLIAM ISAAC ADDRESSES ATTORNEYS GENERAL SYMPOSIUM HOSTED BY GEORGE MASON UNIVERSITY SCHOOL OF LAW

WILLIAM ISAAC ADDRESSES ATTORNEYS GENERAL SYMPOSIUM HOSTED BY GEORGE MASON UNIVERSITY SCHOOL OF LAW

April 30, 2014

It’s a privilege for me to appear before this esteemed group of legal and political leaders assembled by George Mason University School of Law. I graduated from the College of Law at The Ohio State University and my first position after graduating was at the Foley & Lardner law firm in Milwaukee. I next became general counsel of the largest bank in Kentucky before being appointed to the FDIC board by President Carter at the age of 34 and being named Chairman of the FDIC by President Reagan two years later. After serving eight years at the FDIC, I became a senior partner at Arnold & Porter law firm in Washington and founded my consulting firm, The Secura Group, now part of FTI Consulting. I have also served as Chairman of Fifth Third Bancorp.

In short, my career has been focused on law, banking, and public policy. Those topics will be woven through my talk today as I address whether we are on the right track or wrong track in our international approach toward bank regulation and supervision.

The period from 1978 to 1992 was exceptionally tumultuous for the U.S. economy and financial system. The 1970s was a period of low economic growth and high inflation – “stagflation” was the term coined to describe it.

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‘Operation Choke Point’: Way Out of Control, by William M. Isaac published by American Banker on April 27, 2014

‘Operation Choke Point’: Way Out of Control, by William M. Isaac published by American Banker on April 27, 2014

April 27, 2014

The Justice Department’s “Operation Choke Point” is said to be targeted at online payday lenders that lend into states that prohibit payday lending. But the operation is being pushed far beyond its stated objective of targeting online payday lenders violating state laws and is having potentially devastating impact on lawful check cashing and small loan businesses. This in turn will cut off tens of millions of people from much needed access to money to meet emergency needs.

Here is the link to the full article

DOJ’s ‘Operation Choke Point’: An Attack on Market Economy, by William M. Isaac published by American Banker on March 21, 2014

DOJ’s ‘Operation Choke Point’: An Attack on Market Economy, by William M. Isaac published by American Banker on March 21, 2014

March 22, 2014

History teaches that when government bureaucracies try to direct economies, stifled creativity, distorted markets and low economic growth are inevitable results. One of the easiest and most insidious ways for bureaucrats to control the U.S. economy is through the banks, directing who gets – and who can’t get – loans and other essential banking services. That’s happening today, and it ought to alarm and frighten all of us.

Here is the link to the full article

The Crisis Was Not Wasted, Unfortunately, by William M. Isaac and Alex J. Pollock published by American Banker on March 13, 2014

The Crisis Was Not Wasted, Unfortunately, by William M. Isaac and Alex J. Pollock published by American Banker on March 13, 2014

March 14, 2014

With sharp insight and the cynicism natural to a Chicago politician, Rahm Emanuel famously pronounced in 2008, “You never want a serious crisis to go to waste.” A crisis, he continued, “provides the opportunity … to do things that you could not do before.” How true.

For those who wanted to greatly expand the power of government over banks and nonbank financial institutions and markets, especially to expand the discretionary power of unelected agencies; to do so outside the control of the Congress and the judiciary; and to move the financial sector toward bureaucratically directed, rather than market, outcomes, the financial crisis of 2007-9 was indeed a great opportunity. Unfortunately for the economy and private sector job growth, the political actors most definitely did not let the crisis go to waste.

So we got the Dodd-Frank Act of 2010. Dodd-Frank is part of a predictable pattern, as were the previous overreactions to various corporate scandals. The Sarbanes-Oxley Act of 2002, remember, was supposed to assure the identification and management of risk. It didn’t work. Neither will Dodd-Frank. Two other major banking crises during our careers were the real estate bust of 1974-76 and the multiple disasters of 1980-1992. In each case, Congress responded by piling on more burdensome laws and regulations. Each time, it failed to prevent the next crisis.

Here is the link to the full article

Payday Crackdown Creates More Problems than It Solves by William Isaac published by American Banker on February 18, 2014

Payday Crackdown Creates More Problems than It Solves by William Isaac published by American Banker on February 18, 2014

February 21, 2014

There are more payday loan stores in the U.S. than all the McDonald’s and Starbucks stores combined. It’s clear that tens of millions of consumers across the nation want and feel they need this product. It’s equally clear that government policymakers believe they know what’s best for consumers.

Recent actions taken by the federal government to eliminate a variety of short-term loan products suggest a strong bias against all such loans – period. If so, regulators need to reconsider before they destroy a critical source of credit for families and the economy as a whole.

I want to make a couple of things clear before proceeding. Until April when I reach mandatory board retirement age, I am chairman of Fifth Third Bancorp, which is one of four large banking companies to recently abandon very popular short-term lending products in response to regulatory pressure. Also, my consulting firm has done regulatory compliance work for one or more payday lending firms. I’m not speaking for those companies.

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BANK REGULATION: LESSONS NOT LEARNED, OR FORGOTTEN By William M. Isaac

BANK REGULATION: LESSONS NOT LEARNED, OR FORGOTTEN By William M. Isaac

February 12, 2014

[I began my career with the Foley & Lardner law firm in Milwaukee 45 years ago. I recently had the pleasure of returning to Milwaukee to address the Bank Executives Conference of the Wisconsin Bankers Association. It gave me an opportunity to reflect on how we might use lessons of the past to improve bank regulation dramatically. We deserve much better than we are getting. I hope you will take a few minutes to read the speech below.]

It’s a great privilege for me to return to Milwaukee to appear before the Bank Executive Conference of the Wisconsin Bankers Association. I began my career in Milwaukee in 1969 when I joined the Foley & Lardner law firm. I will always be grateful for the experience and wisdom I gained during that period, particularly the invaluable mentoring I received from Ted Wiley at Foley & Lardner.

The largest bank in the state — First Wisconsin, now part of US Bancorp – was an important client of Foley & Lardner, and I spent much of my time doing acquisition, correspondent banking, regulatory, and commercial lending work on behalf of First Wisconsin. I also represented a fair number of community banks throughout the state. It was a great introduction to an industry to which I would devote the rest of my professional career – some 45 years thus far and running.

I was appointed by President Carter to the FDIC board in 1978 and was named Chairman by President Reagan in 1981. The 1970s were a time of low economic growth and high inflation – we called it “stagflation.” Paul Volcker was appointed Chairman of the Federal Reserve by President Carter in 1979 with a mandate to get inflation under control. Volcker, a courageous and principled man, did just that – but at great cost. The prime rate soared to 21 ½%, wreaking havoc throughout the economy and financial system.

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Fed’s Muddled Message Hinders Economic Growth by WILLIAM M. ISAAC AND RICHARD M. KOVACEVICH published by American Banker on January 6, 2014

Fed’s Muddled Message Hinders Economic Growth by WILLIAM M. ISAAC AND RICHARD M. KOVACEVICH published by American Banker on January 6, 2014

January 7, 2014

Despite the Federal Reserve exploding its balance sheet over the past six years from less than a trillion dollars to nearly four trillion, average GDP growth over the period remains only about 2%. The average pace of the current economic expansion is less than half the average of the last four recoveries and well under the 3% long-term growth rate of the U.S. economy.

We believe this is due in significant part to a lack of confidence by private-sector decision makers. This is evidenced by the fact that liquidity on corporate and individual balance sheets remains at record highs despite the enormous opportunity cost of such liquidity due to near zero interest rates.

Confidence remains low notwithstanding reasonably solid, albeit low, GDP growth; slowly declining unemployment; turnarounds in the automobile and real estate industries; and the fact that the U.S. is on the verge of becoming energy independent.

Certainly part of the problem is the dysfunction in Washington. Until the recent modest two-year budget accord, private enterprise decision makers witnessed complete disarray in Washington with the shutdown of the government and the inability to pass budgets or get spending under some semblance of control.

These fiscal policy problems are compounded by the monetary policies of the Federal Reserve. Only academic economists could possibly believe that a timid $10 billion reduction in the purchase of Treasury bonds by the Fed, while continuing to purchase $75 billion a month, would negatively impact the economy and increase unemployment.

The path to economic growth is not to be found in quantum economic theory. The poorly handled economic crisis of 2008-2009 resulted in a severe worldwide financial panic and shook public confidence to the core. The challenge is to restore confidence in the future and convince private sector decision makers that better times are ahead.

Here is the link to the full article

Bill Isaac: Janet Yellen ‘Highly Qualified’ for Fed Chair on NewsMax, article includes audio of the interview, December 18, 2013

Bill Isaac: Janet Yellen ‘Highly Qualified’ for Fed Chair on NewsMax, article includes audio of the interview, December 18, 2013

December 19, 2013

Janet Yellen is a “highly qualified” replacement for Federal Reserve Chairman Ben Bernanke, but will have her hands full calming “scared, nervous investors,” says Bill Isaac, senior managing director of FTI Consulting and former chairman of the FDIC.

“[Yellen] is highly qualified for the position . . . My guess is she’s going to take a greater personal interest in bank and bank holding company regulatory policies than Chairman Bernanke has,” he told the “Steve Malzberg Show” on Newsmax TV.

Here is the link to the full article

Don’t Regulate Asset Managers as If they Were Banks

Don’t Regulate Asset Managers as If they Were Banks

December 18, 2013

[A bi-partisan group of former senior regulators from the Securities and Exchange Commission, Commodities Futures Trading Commission, Treasury, and Federal Deposit Insurance Corporation – including Bill Isaac – authored a letter to the Wall Street Journal published on December 17, 2013 arguing against a suggestion by the Financial Stability Oversight Council that large hedge funds and mutual funds be subjected to bank regulation. The letter was accompanied by a supporting editorial by the Journal noting that “Veteran regulators warn against making asset managers too big to fail.”]

The letter can be found through this link