Late last week in his press conference, President Barack Obama gave a ringing all-or-nothing defense of the Dodd-Frank financial “reform” act rammed through Congress on the heels of Obamacare in 2010. This is despite the fact that consumers are currently being hit by new debit card and checking fees directly resulting from the legislation.
If there weren’t doubts about the misuse of the Consumer Financial Protection Bureau (CFPB) — the powerful new financial agency created by this law that lacks the checks and balances of both congressional appropriations and presidential removal once its head is confirmed — there should definitely be now.
The Senate should hold off confirming Obama’s already problematic
nomination of Richard Cordray to head the bureau until both Cordray and the president explicitly spell out what limits there would be on the powers of the CFPB to ban products, charges, and fees that are unpopular but perfectly transparent — particularly if these fees are the direct result of the cost of another misguided provision of Dodd-Frank.
At the press conference, Obama explicitly defended the price controls in Dodd-Frank that benefit some of America's biggest corporations.
In response to a perceptive question by Hans Nichols of Bloomberg, who asked for particulars on the president's earlier comments slamming Bank of America's debit card fees and saying that banks were not entitled to a "certain amount of profit," Obama responded that banks shouldn't respond to regulations getting rid of "hidden fees" by charging new fees.
But as those of you who have been following my Newsmax columns
for the past year know, the price controls inserted by Obama's former Senate colleague from Illinois Dick Durbin into Dodd-Frank didn't cap consumer fees. Instead, they are price controls on the interchange fees that banks can charge retailers that shift the costs of debit card processing to consumers.
As I note in an article in National Review
, these Dodd-Frank price controls have been lobbied for by some of the nation's biggest retailers, including Wal-Mart, Home Depot, and Walgreens (whose lobbying Durbin cited in a floor speech supporting the price controls!). But after they went into effect Oct. 1, there is little evidence that these retail fat cats passed on any of their $19 billion windfall to consumers.
In some ways, I am more saddened than angered about the president's remarks, which effectively take ownership of this regressive regulation that favors retailers at the expense of consumers. He could have taken a third-way approach and said he was open to looking at the Durbin amendment and other destructive parts of Dodd-Frank without repealing all of the law.
With respect to the Durbin price controls, as I note in the piece below, that is exactly what many members of his own party have done, including Obama's own handpicked chairman of the Democratic National Committee, Debbie Wasserman Schultz. I have also castigated, in that article and in a Newsmax post
, the 12 Senate Republicans — the "Durbin Dozen" as I call them — who became sudden converts to price controls after retailer lobbying. Georgia's Saxby Chambliss and Johnny Isakson should be called the Senators from (Atlanta-based) Home Depot.
I have done many interviews over the past week, including on Mike McConnell's call-in radio show last Thursday on the great WGN in Durbin and Obama's home turf in Chicago. I am heartened that so many Americans are aware that the Durbin price controls are causing their new bank fees (which should be called "Durbin-Obama fees").
As I conclude in a reference to the "Occupy Wall Street" demonstrations, "It may be only a matter of time before a broad swath of citizens decides to 'occupy' the offices of giant retailers and the politicians who support their quest for regulatory corporate welfare. Or find other ways of holding them accountable."
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