Federal reserve agency meets with widespread controversy
2010-03-08
As banks work out how to prevent customer attrition, consumers have been speaking up about banking regulations. The Federal Reserve's potential establishment of an oversight committee to regulate consumer engagement with banking has some analysts questioning the banking industry's understanding of consumers.

Many small banks were reluctant to take funds associated with the bank bailout, and similarly, many may find that affiliation with the Fed will discourage customer loyalty in banking. Plans remain unclear, Reuters reports, and are under debate in the U.S. senate, but the Fed may be elevated to an "umbrella supervisor" of financial services in many sectors.

"Irresponsible Fed actions supplied gasoline that ignited the financial crisis," Boston University management lecturer Mark Williams told Reuters. "Instead of rewarding the Fed for a job poorly done, Washington policy-makers should not reward unacceptable regulatory behavior."

Consumer attitudes toward the financial industry and economic regulators may offer a useful study for promoting customer retention. Analysis from Forrester Resarch recently showed that while trust in large banks was low, credit unions and small banks were gaining in popularity - reading customer attitudes and dispositions could provide a foundation for future customer outreach strategies.

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