Despite the populist rhetoric and anti-bank bank posture, a look behind the curtain of the Wall Street Reform bill reveals nothing more than self-interest, business as usual and more power and influence to Wall Street instead of the free market. And as if the permanent bailouts and too big to fail advantages already in the Obama Dodd bill aren’t enough for the greedy banks, a proposed amendment offered by former Bank of America executive Sen. Kay Hagen is a perfect case and point.
Hagen’s amendment proposes to “protect consumers” from lenders whose market includes lower and middle class Americans — the type of folk that Bank of America wouldn’t lend a dollar to — despite trillions in federal support.
These loans, often called “payday loans,” provide short-term cash to Americans who need money to repair their car, fix their house, even pay a medical bill, while they wait for payday to payback the loan. The Hagen amendment would limit competition for the big boys at Bank of America but allow consumers to take cash advances from their credit cards.
The Hagan amendment does not protect consumers from outrageous and exorbitant fees that Bank of America charges consumers. In fact, its actually going to cost consumers more in fees. A Bank of America customer with a two-week overdraft of $66 results in a $30 fee — an APR of 1,165%! In fact, last year Wall Street banks charged consumers $38 billion in overdraft and NFS fees. And by putting the traditional short term lenders out of business, the Hagan amendment will force more strapped consumers to resort to paying overdraft fees that will earn big banks an additional $14 billion a year.
Its not surprising to find out that Sen. Hagan has received over $315,000 in political contributions from commercial banks and financial institutions including $19,000 from Bank of America.
Hagan is also carrying the water for the corrupt Center for Responsible Lending, the group who took $15 million from John Paulson, a key figure in the Goldman Sachs scandal. This money was used to undermine the subprime lending market that helped millions of Americans buy their first homes. While witnessing this, Hagan’s cronies reaped billions of dollars off of their bets against the American dream. The Center for Responsible Lending – author of the Hagan bill – was involved in a scheme with John Paulson and Senator Chuck Schumer to destroy IndyMac Bank that allowed Paulson to buy pieces of IndyMac at fire sale prices and collect billions for himself and his cronies.
Americans are smart enough to make informed financial decisions if know it all millionaire Senators will just let them.