Similar to Donald Trump recently admitting he will cut Social Security and
cut taxes for billionaires, Republicans (including a potential Trump VP)
just walked into a trap.

Today's American Prospect headline: Republicans Are Objectively Pro–Junk
Fee

Congressional Republicans are doing the bidding of credit card lobbyists
that want HIGHER fees on millions of Americans. As part of the larger
Biden Administration fight against abusive fees, the Consumer Financial
Protection Bureau recently passed a rule to cap credit card late fees at
$8. Now, Republicans want to overturn it.

Below, you can help spread the word so voters know that Democrats are
fighting corporate greed and want to lower costs for American families,
while Donald Trump and congressional Republicans are actively fighting to
raise costs by doing the bidding of greedy corporations.

But first, the American Prospect quotes our Progressive Change co-founder
in the piece saying why this news matters:

In politics, an argument typically needs two sides for it to be elevated
in the national conversation. "We’ve seen Democratic unity on fighting
surprise junk fees and naming corporate villains like credit card
companies, banks, and airlines," said Adam Green, co-founder of the
Progressive Change Institute, which worked with the Biden administration
last year to arrange local events on junk fees in places like Michigan and
Pennsylvania. "What’s been missing is opponents smoking themselves out and
raising the volume of this fight so the public knows who is on their
side."...

So here we have a potential VP pick and the financial industry teaming up
to support junk fees. Every Republican, including those in swing
districts, will now have to decide whether they support higher costs on
Americans, which will be redistributed to the banks and the card
companies.

Can you help us spread the word that Republicans are siding with credit
card companies and trying to take money out of the pockets of hard-working
Americans?

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Republicans Are Objectively Pro–Junk Fee

A new congressional resolution aligns Republicans with the financial
industry’s fight to preserve sky-high credit card late fees. (By American
Prospect's David Dayen, April 12, 2024)

The Consumer Financial Protection Bureau’s $8 cap on credit card late fees
has had a wild ride on the road to implementation. After being finalized
last month, the rule drew a lawsuit from the U.S. Chamber of Commerce,
which sought an injunction in Fort Worth. No credit card companies are
located in Fort Worth; the venue choice was made purely to ensure that the
case would be heard by a right-wing federal judge.

The first district court judge assigned to the case owned a bunch of
credit card company stocks and recused himself; the second judge, a Trump
appointee, showed remarkable candor in saying the case had no business
being in Fort Worth and should be heard in Washington. Then the far-right
Fifth Circuit Court of Appeals disagreed with the Trump judge and tried to
pull the case back to Texas. Then one of the authors of that opinion, it
turned out, also owned a bunch of credit card company stocks. He has asked
for briefings on whether he should recuse himself, basically seeking
outside opinions on his own personal corruption.

That’s not the only attack on the late fee rule. Now congressional
Republicans are coming after it, in the process finally setting up a
partisan fight over the popular issue of junk fees, which the Biden
administration has been pushing for the past few years. Republicans, it
turns out, are objectively in favor of junk fees. And by next week,
they’ll be on the record for them.

Republicans in the House and Senate have filed resolutions of disapproval
of the late fee rule. Under the timetable set by the Congressional Review
Act, such resolutions are fast-tracked through the Senate, giving the
minority party the ability to get them to the floor, regardless of the
majority leader’s prerogatives. In the House, where Republicans are in
charge (sort of), we could see the resolution get an up-or-down vote as
soon as next week. That means Republicans themselves will have forced a
vote on whether credit card late fees should be higher or lower. (Spoiler
alert: They want them higher.)

Not only that, but Tim Scott, the South Carolina senator who is on the
short list to be Donald Trump’s vice-presidential running mate, has taken
on the role of the leading champion of junk fees. Scott, the ranking
Republican on the Senate Banking Committee, proudly announced this week
that he’s introduced the resolution to kill the late fee rule. He even
listed all the corporate lobbyists who support him in the effort: “the
Consumer Bankers Association, America’s Credit Unions, Independent
Community Bankers of America, Bank Policy Institute, American Bankers
Association, Americans for Tax Reform, Competitive Enterprise Institute,
and the U.S. Chamber of Commerce.”

So here we have a potential VP pick and the financial industry teaming up
to support junk fees. Every Republican, including those in swing
districts, will now have to decide whether they support higher costs on
Americans, which will be redistributed to the banks and the card
companies.

Let’s step back and describe this late fee rule. The CARD Act of 2009,
passed by Congress and signed by President Obama, barred credit card
companies from imposing “excessive” penalties and fees on customers. The
Federal Reserve, an agency so bad at consumer protection that Congress
created the Consumer Financial Protection Bureau to do the job for them,
implemented the CARD Act rule by saying that late fees could only be
equivalent to the costs credit card companies incur from late payments.
But then the Fed instituted an absurdly large safe harbor, granting
immunity for late fees as high as $30 for the first offense and $41 for
subsequent ones.

This is in no way equivalent to the costs credit card companies actually
incur from late payments. The CFPB did that work and calculated the amount
to be around $8. Which meant the Fed’s rule was giving a giant windfall to
the credit card industry. It’s expected that, when the rule is
implemented, consumers will save $10 billion per year on reduced late
fees; all of that, according to the CFPB’s calculations, was excess profit
for the banks.

Sen. Scott’s claim is that there’s no way such companies can provide
credit without oversized fees. “It will decrease the availability of
credit card products and important financial services, particularly for
Americans who need them most,” Scott said in a statement. In other words,
poor Americans who struggle with their bills should be thankful that
they’re being squeezed for profit by financial institutions.

The CFPB did nothing more with this rule but apply the CARD Act as
written, remove a handout to big banks, and limit a junk fee worth $10
billion a year. This is at a time when higher costs are top of mind for
lots of Americans. Now there will be an actual vote in Congress, where
Republicans will likely line up to unanimously demand higher costs.

The even crazier part about this is that there is no chance whatsoever
that this gambit will work for Republicans. Democrats control the Senate,
and I’d be surprised if any of them want to join with Republicans in
supporting higher costs. Even on the off chance that this gets through the
Senate, President Biden has championed eliminating junk fees and would
surely veto the bill. There’s no chance Republicans have enough votes to
override him.

So not only does this vote put Republicans on the spot over junk fees,
it’s a doomed vote, completely initiated by their own possible VP nominee.
It puts Republicans in an incredibly lonely position politically. Few
causes poll better than eliminating junk fees. One poll from Data for
Progress found junk fee prevention to be at nearly 80 percent support,
including 72 percent of self-identified Republicans.

In politics, an argument typically needs two sides for it to be elevated
in the national conversation. “We’ve seen Democratic unity on fighting
surprise junk fees and naming corporate villains like credit card
companies, banks, and airlines,” said Adam Green, co-founder of the
Progressive Change Institute, which worked with the Biden administration
last year to arrange local events on junk fees in places like Michigan and
Pennsylvania. “What’s been missing is opponents smoking themselves out and
raising the volume of this fight so the public knows who is on their
side.”

Not only will there now be a debate, but there will be votes that can be
pointed to in campaign ads. One party wants to save people from excessive
and unnecessary fees, and the other wants to help companies impose those
fees. The votes will help illustrate that.

Making this work requires competent campaign strategies and political
communications. But for a while, the raw materials were not there. That’s
over. Republicans are objectively pro–junk fee.

And the Democrats are eager to use that fact. White House Assistant Press
Secretary Michael Kikukawa gave the Prospect this statement: “As the most
pro-competition president in decades, President Biden strongly supports
the Consumer Financial Protection Bureau’s work to lower costs for
consumers and take on corporate greed—including by cutting credit card
late fees and saving Americans more than $20 billion in junk fees every
year. Unfortunately, Congressional Republicans are siding with special
interests and big corporations to try to undercut the Consumer Financial
Protection Bureau, which would raise costs and reduce options for
consumers. The President won’t let Republicans undercut hardworking
families for the sake of corporate profits.”

 

 

 


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