Doctor: “Take your medicine patient, whether it kills you or not!”
Medical patients have it all over banking customers in that they have the right to listen to their doctor and decide whether a particular medical procedure will benefit them or not. Banks and banking customers don’t have that freedom. They must follow government regulations to the letter or risk grave injury from federal prosecution. The same holds true for other regulated areas of our economy such as campaign finance laws.
When you compare these two areas, the purposes for these rigid regulations are very similar—to protect the public with new codes and ordinances that will be fail-safe. But here’s where these well-intentioned programs run amok: in their effort to protect, they create huge problems of compliance for entry level companies or would-be politicians who can’t afford to pay for expensive legal service to wade through thousands of pages of regulations or can’t afford to pay for the additional personnel to organize the proper on-board compliance. Small businesses look at these requirements and pass. Or they carve out only the service that they can afford. This is not helpful to the consumer. The real fraud for the public is that these measures offer no real protection. A smart business owner or investor can create better protection with simple business practices.
Economics is a behavioral business and the slightest adverse regulatory requirement can send a small business back to the sidelines. This behavior is not what our economy or our country needs. This does not grow our economy. These draconian measures which are found in all industries need to be eliminated or shaved back to a sensible level of protection. The trade-off must be measured and balanced: the impact on small entry-level businesses must must be as fruitful as the benefit for the customer.