President Obama said Thursday that Bank of America and other financial institutions are using new consumer protections as an excuse to charge new fees.
"I mean, basically the argument they've made is, 'Well, you know what, this hidden fee was prohibited, and so we'll find another hidden fee to make up for it,' " he said at a news conference.
What could help consumers? The new Consumer Financial Protection Bureau, Obama says. The Senate Banking Committee on Thursday approved his nominee to head the new consumer advocacy agency.
That's not to say the new agency will be getting a director anytime soon, however. The committee's vote to approve Richard Cordray for the post was along strict party lines, and 44 Senate Republicans have vowed to block any and every nominee until the bureau is changed.
The president says it's frustrating.
"They see their role as eliminating any prohibitions on any practices for financial companies," he said.
A History Of Consumer Protection
In the fall of 2008, a banking industry meltdown triggered a massive contraction in the economy, dragging the nation into recession. The government swooped in, first under President Bush and then Obama, to catch the plummeting banks, stimulate the economy, rescue the U.S. auto industry, and more.
Democrats, at that time in control of the House, the Senate and the White House, set out to change things — to make sure it never happened again. One of the things they created was the Consumer Financial Protection Bureau, an agency with broad powers to regulate, sharp teeth to enforce, and a strong consumer advocate at its helm.
Too strong, say many Republicans.
"I'm all for consumer protection, I really am," said Sen. Bob Corker of Tennessee. "It just needs to have an appropriate check and balance."
Corker and most of his party want to change the way the protection bureau would work. Instead of one director, they want a board to oversee it, and they're ready to filibuster if they don't get their way.
"I can't imagine anybody's going to be confirmed as head of the consumer protection agency until an appropriate check and balance is put in place," Corker said.
This might sound like the same old partisan dreck, but it's different. This agency already exists. It's law. It has a mandate to begin advocating for consumers, and, in national polls, is broadly supported by Americans.
Republicans fought to weaken the bureau when it was being debated, and they lost. That hasn't stopped their fight.
Bill Allison at the nonpartisan Sunlight Foundation isn't surprised. He says the GOP effort is backed by an army of lobbyists. Allison has compiled public records of meetings at the Treasury Department, the Federal Reserve and other government agencies with lobbyists for financial firms, mortgage brokers, payday lenders and private student-loan providers.
"All of them coming to meet about this, and this is an industry that you know has already spent in 2011 close to half a billion dollars lobbying Congress, the executive branch and these agencies," he said.
The corporations are all protecting their interests in the future economic system. They want to make sure the new Consumer Financial Protection Bureau isn't too powerful.
The irony, Allison says, is that the people least represented in this multibillion-dollar campaign to change the bureau are the consumers.
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