Given their prevailing 20th-century mentality and saddled with new and burdensome regulations, banks have little incentive to develop affordable credit options to serve the needs of millions of American consumers.

I’m not talking about the Warren Buffetts of the world; I’m talking about people who wake up every day worried about the future, which unfortunately accounts for most of us. A report released by the Corporation for Enterprise Development found that 127.5 million people are liquid-asset poor, meaning that a sudden loss in household income would leave them below the poverty line in just three months.
 

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Real progress lies in old-fashioned entrepreneurship; this is the same kind of innovation that took us from a rotary-dial landline to a cellphone and from analog television to digital cable. Emerging technology in the non-bank financial space is a natural progression from a bank-centered economic system.

Yet, qualified trend-setters are stymied by a regulatory environment resistant to business models other than traditional banks. Marketplace innovations are unduly restricted by an antiquated financial system that has failed to keep up with the changing demands of consumers.

The government needs to realize that like AT&T, national bank giants eventually need to be broken up and weaned off heavy government subsidies. That way, other competitors in the marketplace can spur innovation in consumer finance without having to worry about too much government regulation.