If You Ask Me: A Global Banker Reflects on Our Times

Wriston, Walter B.


The Perils of Legal Pollution


Do you think people today have less respect for the law? If so, why?

Because there's no longer any possibility of finding out what the law is.

I'll give you a specific example that I know something about. We have a wonderful law: it's called Truth in Lending. The title suggests that prior to its passage, there wasn't any such thing. It has forty-three sections. We now have from the Federal Reserve Board six thousand pages of regulations. There are currently in the courts of the United States ten thousand lawsuits based on those.

It happens that on a Master Charge monthly billing in the State of New York, there are seven statutes that apply, apart from Truth in Lending. One law delineates the size of the numerals in the amount, but not the size of the type in the text. Another delineates the size of the text, and says below a certain type size the contract is not enforceable in court. Another delineates what goes on the front of the bill and what's on the back.

We spend thirty million bucks a year in auditing fees, sixteen million dollars a year in legal fees, and it's a possibility that we may be in conformity with every law. But only a possibility. You don't have ten thousand lawsuits if everyone agrees on what you should do.

Ninety percent of the banks in the United States have fewer than fifty employees. They haven't read those six thousand pages. There's no way they can read those six thousand pages.

So we have a two-tier society. We have the large corporations, which try like hell to obey confusing laws, and we have a whole sector of society that pays no attention to the law for the simple reason that they cannot. If I go down on First Avenue in New York and go into the neighborhood delicatessen and I say, "Hey, don't you know that OSHA requires that aisles be 37 inches wide?" The guy says, "Osha, gosha, get lost'.."

What concerns me is that a poor man learns that he's broken the law from a nightstick across his head. And the big guy learns about it from a headline in the paper, "X Corporation Violates Law."

There's no question that laws are being violated. The only question is which ones. If we have constructed a society that can't be law-abiding even when it wants to, I think we're in deep trouble in this country.

I'll give you a couple of numbers to illustrate. In the last session of Congress, twenty thousand bills were introduced. Twenty thousand bills'. That's one for each legislative staff member, by an odd coincidence. In one day, two hundred and seventy-two subcommittees of the Congress held hearings. Think about it. At the end of the day, the President of the United States signed eight hundred forty-three laws. That's just federal. Every day the Federal Register grows by three hundred thousand words, each one of which is amending or putting out a new regulation. Who in this room could read three hundred thousand words a day? I don't know how long is, but it can't be much more than that. In my own state of New York there were twenty thousand bills introduced last year. Citibank tracked fifteen hundred of them. The last New York State Legislature passed two thousand bills--two thousand in just one state. The Governor signed eighteen hundred.

Now, it's very simple to say, "You broke the law." There's no one yet who has ever read those eighteen hundred laws, including the guys who passed them.

So, what I'm suggesting is that we can't continue trying to legislate everything, or we'll have a total breakdown in our volunteer society, which is based on respect for the law.

  • The document was created from a compilation of interviews and question and answer segments with Walter B. Wriston which was later compiled into "If You Ask Me: A Global Banker Reflects on Our Times" in 1980. The original speech is located in MS134.001.034.00018.
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 Title Page
If You Ask Me: A Global Banker Reflects on Our Times
I: Getting Down to Fundamentals
The Big Cop-out
You Can't Go Bail for Everyone
Risk Is What It's All About
II: Some Basic Ills of the Body Politic
Lincoln Wouldn't Have Made It
Unpredictable Is a Dangerous Country
The Pitfalls of Single-issue Politics
Expect To Get Zapped
The Perils of Legal Pollution
The Injustice of Our Tax System
Those Wonderful People Who Bring You Inflation
Stop the Presses
Silly Premises Lead to Nutty Conclusions
Easier Said Than Done
III: New York, New York
New York City Is Alive And Well
The Road Back
IV: Careers
Rx for Happiness
Good Forward Planning
Dull Job?
A Simple Matter of Survival
Making It at Citibank
What Fast Track?
No Hiding Place
V: Once Around the World Quickly
South Africa
China: A Matter of Timing
The Real Significance of Iran
Iran and the Money Markets
Fashions in Country-criticizing
VI: The Global Financial Scene
The Elusive Eurodollar
De Facto Payments Mechanism
Too Big To Move
The Foreign Exchange Game
They Can't Leave the System
Baskets of Money
Swiss Francs
The Value of a Dollar
Not a Loss Since 1897
A Rational View of LDC Loans
Free Trade Benefits Consumers
The Destructive Costs of Regulation
The Big Rip-off
A Real Entitlement
Can Regulations Prevent Bum Loans?
The Insidious Side of Controls
Competition in Regulation
VIII: The Shape of Things To Come
Not As Big As You Think
What Lobby?
Armageddon Is Late, as Usual
Some Simple Facts about Interest Rates
An Expensive Luxury
How Big Is Big?
What We Did Yesterday Won't Work Tomorrow
A Matter of Semantics
Unpredictable Is a Dangerous Country
Privacy: A Serious Problem
The Unseen Revolution
Things Are Going To Be Different
Take the Handcuffs off Everybody
The Gray Areas of Lending
No Mouse under the Rug
Thank God We Don't Have National Banking
Competition Keeps You Awake
Accounting for Loan Losses
Not a Utility
People Like It
Computer Frauds
Some Final Words on Responsibility
About the Author