I know we're still in pre-season for the NFL and it may be a bit early for football analogies, but I was thinking about the players in our industry while on a plane late last week and it seemed to make a lot of sense to me — at least from 30,000 feet. From a distance, a football team looks like any other group of guys (who are all above-average size and overly aggressive), but each team is really made up of several smaller teams that play different games within the same contest.
Football teams have offensive squads, defensive squads and special teams for things like kick-offs and field goal kicking. Unlike soccer or basketball, the same guys aren't generally asked to play on more than one team. In football, there are guys that specialize in offense (which, somewhat oddly, is all about providing defense for the ball carriers) and those that prefer to play defense (pummeling the other team's ball carriers).
I guess many businesses are the same way, with certain teams that go out into the field to capture business and others that either handle the work or play defense on the help desk or customer service line. But I don't see most financial services companies set up this way. Wall Street firms with their aggressive salespeople are the exception, but generally US banks are defensive players, almost exclusively.
Some executives in the bank are likely to argue with this assessment, especially loan officers and those on the front lines of the marketing efforts, such as they are. The truth is that bankers are risk averse and that makes them defensive players. While they may engage lobbyists or join a trade group to have some influence on the game field, they pretty much lawyer up, staff up for and also outsource to external teams for compliance and then cross their fingers that the loans they write today will still be compliant with everyone in the future.
In today's environment, many lenders aren't doing much more than this because they can't be sure what the future will bring. They're paralyzed, and with good reason. Just today, we learned that Thomas Considine, commissioner of New Jersey’s Department of Banking and Insurance, has decided that RESPA’s new disclosure requirements don't comply with NJ law. His solution to lenders there: comply with both!
Recently, I've been visiting with a number of mortgage bankers who are starting to get a bit fed up with this. While it's not clear what direction these players will go, I have a feeling that it's going to be offensive in nature, which means we're all about to be reading some very interesting stories. When successful businesspeople decide they would rather fight for their industry than let lawmakers legislate them out of business, the game gets a whole lot more interesting.
It's about time.
Rick Grant is veteran journalist covering mortgage technology and the financial industry.
Follow him on Twitter: @NYRickGrant