Biden’s SOTU hit a nerve last week when he advocated for the CFPB’s proposal to limit credit card and bank late fees to a maximum of $8 (considerably less than the current $30... and $41 for additional missed payments). According to the CFPB, that would save consumers $9 billion annually. During his speech, Biden said “Americans are tired. We're tired of being played for suckers." The banksters, of course, don’t look at it quite that way. Instead of seeing a $9 billion savings to consumers, they see a $9 billion hit their industry’s their bottom line.
“[T]he proposed rule has already provoked serious outcries and opposition. The Associate General Counsel of the Bank Policy Institute issued a statement criticizing the proposal, stating that ‘[b]y effectively removing those incentives, the proposal would harm the very consumers the CFPB seeks to protect by increasing the overall cost, and reducing the availability, of credit.’ The American Bankers Association (ABA) called the proposal ‘extreme,’ and vowed to fight it.” The Chamber of Commerce and affiliated and like-minded groups are on the warpath, mobilizing for war of all front.
Last week, Brendan Pedersen, reporting for Punchbowl News, wrote that the planning going into the banking lobby’s attack on the White House is shaping up to be “one of the most significant conflicts yet between the financial sector and the Biden administration. And it’s also a key issue that House Republicans will try to whack the White House on… This is a struggle that, on the surface, will take place mostly within the regulatory system and the 30-day public comment period. Bankers and their representatives tell us that they’ll, for instance, argue the CFPB is flouting important administrative requirements. But in reality, we also expect this conflict to be the banking lobby’s first serious test of Republican support this Congress. Lindsey Johnson, president and CEO of the Consumer Bankers Association, told us that “there is a role that Congress absolutely can and must play’ in the credit card fee fight: ‘I think when it comes to Republicans or Democrats, there is going to be a recognition that this is going to increase costs, and it’s going to reduce access to credit. It just is.’” Sounds like a threat.
Luckily, House Republicans “can’t actually block regulations by itself. But lawmakers could play a significant role in the public-facing push against the rule. Republicans on the House Financial Services Committee have promised to bring CFPB Director Rohit Chopra to testify regularly as part of their commitment to ‘regulatory oversight.’” The new House Financial Services Committee chair, Patrick McHenry is a notorious bought-and-paid-for banking industry whore. That’s why McCarthy gave him the gig. But it isn’t just McHenry and his bribe-taking Republicans shilling for the banksters. Some of the Democrats on the committee are just as unsavory, career-long crooks like Josh Gottheimer (Blue Dog-NJ), Joyce Beatty (D-OH), Sean Casten (New Dem-IL), Gregory Meeks (New Dem-NY), Vicente Gonzalez (Blue Dog-TX), Bill Foster (New Dem-IL)…
Data For Progress’ polling after the State of the Union showed that “The Junk Fees Prevention Act, which would ban various junk fees, is supported by 79 percent of voters. This includes 85 percent of Democrats, 77 percent of Independents, and 74 percent of Republicans.. The White House fact sheet on the bill emphasizes baster rip-offs but the polling emphasized online and airline ticket rip-offs. The White House: “[T]he Biden-Harris Administration is announcing two actions that further advance the President’s agenda of promoting competition in the American economy. First, the Consumer Financial Protection Bureau (CFPB) is proposing a rule that would slash excessive credit card late fees, pursuant to its authority under the bipartisan Credit CARD Act of 2009. The rule is projected to reduce typical late fees from roughly $30 to $8, saving consumers as much as $9 billion a year in late fees… The CFPB targeted overdraft and bounced check fees, releasing two reports in 2021 and ramping up its oversight, driving 15 of the 20 largest banks to agree to put an end to bounced check fees. The CFPB followed up by releasing guidance banning surprise overdraft fees-- fees charged for overdrawing a checking account even though at the time of purchase there appeared to be sufficient funds-- and surprise depositor fees charged when you deposit someone else’s bounced check. These changes will reduce fees by more than $1 billion annually.”