​Broker not convinced by bank CEO's parting words

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Brokers may be happy to see one big bank executive go, but they likely won’t fall for his parting words about the need for tighter lending rules to help rein in consumer debt.

“It’s just not realistic in a competitive marketplace to say, ‘Why doesn’t one bank lead the way and change the rules?’ It won’t happen. This is a responsibility of the government,” Ed Clark, who will step down as CEO of TD Bank in November told Reuters. “I get why they keep worrying about doing it. But I think you have to just keep touching this brake. As long as you run low interest rates, you then should be continuously leaning against asset bubbles.”

Credit debt to disposable income -- one way of determining debt burden – rose to 163.6 per cent in the second quarter of 2014 and many brokers believe it is unsecured debt, and not mortgage debt, that should be more closely watched by the government.

So while they will likely agree with Clark’s sentiments, they may also view them as hollow.

“Ed is hoping that some empty platitudes on his way out the door will cast a more favourable light on his legacy,” David Larock of Integrated Mortgage Planners wrote on MortgageBrokerNews.ca. “The record will show that on his watch TD aggressively loosened its credit policies with market-first initiatives like 125 per cent registrations, and that his bank also quietly implemented anti-consumer mortgage policies like fixed-rate collateral mortgage collateral charges and the cross-collateralization of unsecured TD debts.

“Your actions spoke more loudly than your empty words do now, Ed.”

Clark has served as CEO of Canada’s second largest bank since 2002. He will be replaced by TD COO, Bharat Masrani. 
  • AnthonyC on 2014-09-18 12:09:11 PM

    Concern for the consumer or the economy...ha! what a joke! Of course he would twist it in his favour and put the burden on the feds to solve a problem we all know should be federally regulated. But he has to save face and of course would never be the first to speak up against unwise lending policy, at the expense of the bank's bottom line...or his neck for that matter...you think with his salary, he'd have had the courage to back up his words and lead the charge before he retired...but of course his shareholders would have hung him out to dry at the mere mention of reining in consumer access to cheap money...its all about company performance and the bonuses these fat cats get...they really don't care about the public good. I don't see the government stepping into this matter either...they are after all the banks biggest borrower...

  • Daniel McKay on 2014-09-18 3:17:12 PM

    Nice try Ed, if we were dumb enough to fall for your tricks, we might be dealing in mortgages as bank employees and not as brokers. TD has built and acquired a large book of high interest unsecured debt during your tenure. TD also bought a huge book of partially secured debt from their large auto finance acquisition a few years back. Meanwhile TD along with the other big banks successfully have convinced the government through aggressive lobbying to restrict home refinancing and equity take outs effectively taking away one of the only means for Canadians to consolidate their high interest debt to lower rates. The argument was essentially "If you continue to allow Canadians to refinance or ETO at high loan to values, when housing prices drop, they will walk away from their mortgages and crash the housing market". Problem is, the banks are securing the high interest debt against those homes with collateral mortgages. Their lobbying and propaganda such as Ed's comments are nothing more than a smoke and mirrors display to keep Canadians paying high interest rates on household debt. It has absolutely nothing to do benefit anyone other than bank shareholders. You may have been successful at fooling the majority of the country so far, but you don't us brokers.

  • AnthonyC on 2014-09-18 3:51:04 PM

    @ Daniel McKay...

    Great summary Daniel...

  • John W on 2014-09-18 5:09:45 PM

    Since when do bank exec's care about consumers. All they care about is their bonus and what the stock trades at. End of story.

  • anthony contento on 2014-09-18 5:28:09 PM

    no disrespect to AnthonyC. Just to clarify its not Anthony Contento (me writing) . I keep getting calls as to why I make certain comments. I don't dabble in these politics. Just wanted to clear the air. Thanks

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