Obama Wants Big Banks To Pay More for Oversight

[SpartanDem]

Source: WaPo

The Obama administration is pressing ahead with its broad overhaul of financial regulation by proposing to hike the fees big financial firms pay for federal oversight while easing the burden for smaller ones, officials said.

The new two-tiered, pay-for-regulation approach is intended to partly cover the costs of more vigorous bank regulation and a new consumer financial protection agency. It reflects the administration's view that large banks and lenders should pay more because they are more complex and expensive to regulate, a Treasury Department official said.

The new fee structure is part of the administration's effort to rework the relationship between Wall Street and Washington. Legislation is now before Congress, which is set to take up the massive regulatory overhaul in the fall.

But the plan has run into opposition from some Republicans and federal regulators who do not want to be stripped of their powers or merged into other agencies. In addition, industry officials have been working vigorously on Capitol Hill to block the creation of a new consumer protection agency. On Thursday, advocates for big financial firms warned that any higher fees imposed by the federal government may be passed on to consumers.



Read more: http://www.washingtonpost.com/wp-dyn/content/article/2009/08/13/AR2009081303274.html?hpid=topnews

[BlooInBloo]

1. Pay to save the fuckers from themselves sounds just fine to me.

[Paranoid Pessimist]

5. Criminal Conspiracies

All large financial institutions are. Got a letter today from American express telling me:

1) "We are raising your APR on purchases and cash advances." Doesn't say how much they are raising our APR to unless you read the incredibly small print and dense language on the back of the letter.

2) "We are increasing late fees. Please remember that you can avoid late fees by paying on time." Ahhh. So that's how that's done. I've always wondered how to avoid late fees. Good to know.

3) "We are removing the Preferred Annual Percentage Rate (APR) for purchases." I didn't know there was a preferred rate. On the back of the letter it said something about "the fifth sentence of subsection B of your agreement is deleted."

Then they say: "In addition, we are pleased to let you know that we will not charge you a fee if you go over your credit limit. Don't forget, it's still important to keep your balance under your credit limit." So even though they say it's important not to go over your limit, they won't charge you a fee for doing so. Just up your APR and your late fee if you're ten minutes late getting your payment to them.

Fortunately, that account and all my other credit card debt has been paid off for several years now. I keep it just in case of some major emergency, or in case I get fed up enough with everything to go on a charge-it world tour binge, staying in five star hotels, eating in fine restaurants, enjoying all the luxury credit cards can enable, then pay off one account with another (I have 3 cards and a debit card, which is the only one I use) on line until every limit is maxed, then sit in the gutter, sated but destitute, and tell them I have nothing to pay them with. See if the collection agents will follow me into the homeless shelters in the rotten dangerous parts of town.

I probably won't do that. But I will continue to assert that large financial institutions are criminal conspiracies and the only reason they aren't all doing time with Bernie Madoff is that they have the "lawmakers" very well bought and paid for.

Those trillions we allowed to be shoveled into the financial markets system -- we certainly aren't getting any kind of break from them. They continue to nickle and dime us with lawyer-driven rule changes that we are powerless to do anything about.

[No Elephants]

11. Good, 'cause you will be the one paying. They'll only raise their fees.

Still, it's preferable to having the gubbamint pay directly.

[JayMusgrove]

20. Everyone knows big banks cannot be profitable if you charge them a

slightly higher regulatory fee. We KNOW banks barely make enough money to pay out huge bonuses to their executives!!!

If anyone still thinks I need to put a sarcasm icon here, perhaps you can tell me nicely.

[Lagomorph]

2. I'd feel better if they could fund it thru efficiency...

All these costs get passed on to consumers...

We're gonna see the cost of everything going up a lot to pay for all the changes coming.

[aquart]

7. Welcome to DU. May your brief stay be a happy one.

You have no idea what you've been paying for...and will continue to pay for as long as there is no oversight (thanks for gutting our government, Georgie!)in areas essential to human life and finance.

[Lagomorph]

17. Oh, I think I do, I've even got the records.....

'May your brief stay be a happy one'

Is this some sort of warning to toe the line or else?

I'm not here show off my self-perceived expertise in all subjects, big and small, left or right.

I'm not here to judge. And I'm not here to tell people who I disagree with how to act.

I have some progressive ideals I'd like to see prevail, but in others ways, I'm fairly conservative about how we should go about getting there, compared to others who haunt this place. It comes with age.

We've had the largest economy in the world for a long time, thanks to capitalism. It seems we should be able to guide it towards everyone's benefit without killing it.

I'm not satisfied with leveling the playing field, unless everyone is lifted up. It's never been done, but it's what we have to do.

[Rebellious Republican]

10. Guess you have not noticed....

Everything has been going up anyway, so let them keep raising. Economics 101 dictates that eventually you will price yourself out of the market. We are already at that point, you can not spend what you do not have, you do the math. Let their fat cat CEO's, corporate execs and board members start taking some cuts and reductions if they want to stay in business. Republican economics 101 dictates that the free market will work it self out, right. Your argument holds no water, let them eat cake!



:argh:

[Lagomorph]

16. It's pretty obvious that....

...increased oversight and regulation would be beneficial, if it protects the public. In the past it has all to often protected the banks and predatory lenders.

I was never one for deregulating vital infrastructure. Some things are simply too important to subject to market forces. Letting energy traders shutdown power plants so they can drive up the price of electricity, putting everyone's mortgage at risk to encourage overbuilding and spiraling home prices was just a Ponzi scheme.

Unfortunately, our business leaders, and their government overseers are remarkably short sighted. They tweak the numbers to get good results from month to month, but won't look down the road to see what it's going to do to the rest of the economy.

[No Elephants]

12. We see the price of everything going up,, no matter what, though.

[high density]

14. Or you could find a bank that doesn't charge stupid fees

And keep yourself out of the situations where you may be assessed one. This is just like Limbaugh spouting off lies about the credit card companies doing away with the grace period because of increased regulation. That's BS because there will always be a bank that keeps the grace period and they'll use it as a selling point, then others will join the bandwagon. Banks have to be competitive to survive. The last few years has shown they also need increased regulation for their own good, not to mention the public good as well.

[Lagomorph]

18. LOL, already did that.

Good bye BOA, hello Wells Fargo. It's a much better arrangement.

[Paula Sims]

3. It's aready happening and it's a bad idea unless ALL regulators charge

Right now, the national banks (those with National or NA in their names) are regulated by the Treasury under the auspices of the OCC; thus, if a bank is nationally chartered, it is regulated by the OCC and the OCC charges for the examination.

What always got me about this arrangement is that banks can(and do) change memberships to another regulator -- why would a bank want to stay with a regulator that gives them bad marks AND they have to pay them for doing so? Interesting in that the large national banks (Citi, Bank of America, Chase, etc) are the ones who are regulated by the OCC and those issues are trickling down to the little banks under them. Now if the Fed (a regulator of state chartered banks) or the States themselves start charging for the exams, then we have a level playing field. Not sure if the NCUA charges for exams of Credit Union or if Thrifts (S&Ls, Savings Banks) get charged for their exams.

So are we SURE we want to "Nationalize" the banks and put the ALL under the Treasury? Doesn't seem like the wolves that were supposed to be guarding the hen house didn't do that great of a job. But that's just my opinion. . .

[truedelphi]

6. Could you take the time to write up your last paragraph

In a different way.

You sound very knowledgeable but your convoluted sentence there at the end stymied me.

And as far as Nationalizing the banks, if that meant putting them into receivership, the reason why doing that would be a good idea is that then the contracts held by the banks would be null and void. Unfortunately, with the way it is now, the contracts that the banks hold have to be honored. And many of the big banks are under contract to pay off the Credit Default Swaps first, per contractual agreement. (analogy - As it is now with bank contracts honored - it is as though our government must put water into a dam that still has a hole in it. The water continues to flow out, as the hole is not repaired.)

This negates the ability of Bailout monies to shore up the value of the assets, which would then in many cases make the Credit Default Swaps not be needed. (As the CDS are only honored if the value falls, if the value of the asset is increased, the Credit Default Swap is moot. That is why having receivorship would be desirable.)

[Paula Sims]

9. Restatment of post #5

Sorry, I guess I was more tired than I thought.


What I mean to say is that putting all banks under "government control" (ie the Treasury/OCC) is not a good idea and we see what happened to the banks that were under OCC oversight. The issue is that previous heads of the regulators didn't believe in regulation, they believed that "the market" will regulate so it was an implied "hands off". Now the regulators are finally doing what they should have been doing all along and it's taking a while to undo the mess. In addition, not that many laws were passed to enforce regulation, especially consumer regulation, so many regulators had their hands tied by those issues.

Remember, the FDIC, States, NCUA, Fed are comprised of many hard-working people who really are trying to do the right thing -- as much as they are allowed to do so.

Hope that clears things up

[truedelphi]

15. Yes, the ambiguity is now missing.

And I can say I agree with you.

Thanks for the extra effort.

[MannyGoldstein]

4. Hey - Banks Are Increasing Fees On Us, So...

Karma.

[Heidi]

8. Recommended. (nt)

[Cass]

13. I'd like to know more about the new consumer protection agency that industry officials

have been trying to block.

From the article - In addition, industry officials have been working vigorously on Capitol Hill to block the creation of a new consumer protection agency.

[truedelphi]

19. I'm betting if we do end up with some kinda Consumer Protection Agency

It will use the "No Child Left Behind" program as its model.

[Owl]

21. Good idea.