Tags: Obama | Banks | Rules | Charge

Obama: Banks Use Regulations as ‘Excuse’ to Charge More

Thursday, 06 Oct 2011 03:38 PM

President Barack Obama said U.S. banks are using regulations imposed after the financial crisis as an “excuse” to impose new fees on consumers.

“People have been using financial regulation as an excuse to charge consumers more,” Obama said today at a White House news conference. “Basically the argument they’ve made is, well you know what, this hidden fee was prohibited so we’ll find another fee to make up for it.”

Bank of America Corp., the biggest U.S. lender, and rivals including JPMorgan Chase & Co., Wells Fargo & Co. and SunTrust Banks Inc., are rolling out new charges for debit-card users as Dodd-Frank Act rules imposed by the Federal Reserve take effect this month.

The limits may reduce annual revenue at the biggest U.S. banks by $8 billion, data compiled by Bloomberg Government show. The fees have drawn criticism from Obama and some Democratic lawmakers, who are fighting Republican attempts to scale back Dodd-Frank.

Financial institutions “have the right” to add charges such as the debit-card fee, Obama said, “but it’s not a good practice. It’s not necessarily fair to consumers.”

Consumer Protections

Obama said the government doesn’t have a right to dictate how much profit a bank makes. Still, he said, the bank charges demonstrate the need to get his nominee to lead the Consumer Financial Protection Bureau confirmed by the Senate to make sure customers know prices and practices of banks are transparent.

The nomination of Richard Cordray to oversee the bureau was approved by the Senate Banking Committee today. The action sets up a showdown with Republicans vowing to block any nominee for the post until changes are made in the structure and funding of the new agency, created by the Dodd-Frank Act.

Vice President Joe Biden said earlier today that financial institutions are “tone-deaf” for planning new fees.

“The American people know -- they don’t guess, they know - - the reason the CEO of Bank of America” and leaders of other financial institutions remain in business “is because they, that guy making 50,000 bucks bailed him out,” Biden said, referring to the government rescue of financial institutions in the aftermath of the collapse of Lehman Brothers Holdings Inc. in 2008.

“At a minimum, they are incredibly tone-deaf,” Biden said. “And at a maximum they are not, they are not, paying their fair share of the bargain here. And middle-class people are getting killed.”


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President Barack Obama said U.S. banks are using regulations imposed after the financial crisis as an excuse to impose new fees on consumers. People have been using financial regulation as an excuse to charge consumers more, Obama said today at a White House news...
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Thursday, 06 Oct 2011 03:38 PM
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