The Credit CARD Act Is No Match for Wall Street's Ingenuity
Posted: October 12, 2010 10:18 AM
I don't know why I'm surprised that the banks have figured out a way to recover what the Credit Card Accountability Responsibility and Disclosure Act -- or Credit C.A.R.D. Act -- took away, but I am a little. If the Act was intended to create "accountability" and "responsibility," how are either of those two things accomplished by finagling a way around the new set of laws that basically imposes the same old kinds of hardship fees on the customer? Perhaps there should have also been something in there about not being allowed to fashion loopholes that are essentially just new versions of the old regime.
It reminds me of an experience I had several years back when we ran a large team building event for a company on Wall Street. It was a customized program designed to welcome 250 incoming analysts to the firm as part of their orientation. These young men and women were handpicked from top schools and selected because they had already proven to be the best and the brightest. And that they were. It was obvious. Collectively, they vibrated with intelligence, sparkled with charisma and exploded with confidence. But more than any of that, it was clear that they were determined to win. Of course they were; this was the face of the financial sector's future. Smart. Driven. Outgoing. Competitive. But now with the financial industry being in the shape that it's in, something about that day comes back to haunt me.
At the time, it was intriguing, mind-boggling and even a bit entertaining. However, now in retrospect, it smacks of a disheartening reality. What happened was we put groups of graduates through a circuit of specially-designed exercises that we'd vetted many times over, looking for, and anticipating, whatever loopholes they might find and try to jump through. We knew that most team building exercises were not difficult enough for this bunch, so we made up our own, and then added on layers and layers of rules to complicate them as much as we could. Otherwise, we also knew from experience that they would solve each challenge in two seconds flat. To avoid that, each exercise had a long list of conditions, all of which the analysts said they understood, which was apparent in their execution as well.
As a whole, the teams didn't do anything that they were not supposed to do. It's what they did do that was so alarming, and might I add that they still managed to do it in two seconds flat. All of those rules? Out the window. They were no deterrent at all. Not one bit. They figured out a way around them in the amount of time it takes me to breathe in and out once. Then they somehow twisted what they could do by altering the meaning of our instructions to gain an advantage, which in many cases was a substantial one. We looked on in awe, and when we called them on it, their response was, "You didn't say we couldn't do it." And with that, someone turned to me and said, "Great, these guys are going to be running our financial system someday." Little did we know that "someday" was right around the corner when a different class, but the same type of thinking would bring the market -- and economy -- to its knees.
I don't know. At the time, I wondered if Wall Street needed to focus more on their recruiting/selection practices then on the ethics training that is invariably necessary only after it's too late and all the rules have been bent as the means to a winning end. On the other hand though, can an industry fueled by power and greed survive with fewer Type A's?