Biden Bits: “Enjoying the First Snow of the Year”…

Biden Tweets Logo. Image by Lenny Ghoul.

It’s Wednesday…

President Biden’s public schedule for 01/17/2024:

10:00 AM
Presidential Daily Brief
The President receives the Presidential Daily Briefing
Closed Press
1:30 PM
Press Briefing
Press Briefing by Press Secretary Karine Jean-Pierre and NSC Coordinator for Strategic Communications John Kirby
James S. Brady Press Briefing Room
3:15 PM
Meeting the “Big 4” Congressional Leaders
The President will host Congressional leaders at the White House to discuss the critical importance of his national security supplemental request
Cabinet Room Closed Press

Press Briefing by Press Secretary Karine Jean-Pierre and John Kirby @1:30 p.m. D.C., time:


Winter Weather Tweets

From Tuesday…

Stay safe, everyone.


JetBlue–Spirit Airlines Tweet

From Tuesday…

From the Reuters article…

The ruling, by U.S. District Judge William Young in Boston marked a victory for the White House in its efforts to prevent further concentration of the U.S. airline industry and raises questions about the viability of another recently proposed deal, Alaska Air’s (ALK.N), acquisition of Hawaiian Airlines(HA.O).

The ruling finding the deal violated U.S. antitrust law also called into question Spirit’s future. The ultra-low-cost carrier has struggled to turn a profit amid a run-up in operating costs and persistent supply chain problems.Spirit’s shares closed down about 47% on Tuesday after the ruling, while JetBlue shares ended about 5% higher.Young said that while a combined JetBlue-Spirit would likely place “stronger competitive pressure” on larger carriers that dominate the domestic airline market, “the consumers that rely on Spirit’s unique, low-price model would likely be harmed.”

[snip]

The airlines can appeal the ruling. In a joint statement, JetBlue and Spirit said they were evaluating “next steps as part of the legal process.”

Reuters.com. 01/16/2024.

From Justice.gov…

01/16/2024:

Justice Department Statements on District Court Decision to Block JetBlue’s Acquisition of Spirit Airlines:

Today, the U.S. District Court for the District of Massachusetts blocked JetBlue Airways’ $3.8 billion dollar acquisition of Spirit Airlines. The court found that JetBlue’s proposed takeover of Spirit is unlawful because it “does violence to the core principle of antitrust law: to protect the United States’ markets – and its market participants – from anticompetitive harm.”

“Today’s ruling is a victory for tens of millions of travelers who would have faced higher fares and fewer choices had the proposed merger between JetBlue and Spirit been allowed to move forward,” said Attorney General Merrick B. Garland. “The Justice Department will continue to vigorously enforce the nation’s antitrust laws to protect American consumers. I want to thank the Antitrust Division for their excellent work on this case.”

“The Court’s decision today reaffirms that the antitrust laws vindicate the economic liberty of the American people,” said Principal Deputy Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division. “We are particularly encouraged by the court’s acknowledgement of the role of the Justice Department in protecting consumers ‘who otherwise would have no voice’ and the ‘forthrightness, civility, and zealous advocacy’ that ‘assisted the Court in reaching out for justice.’ I am incredibly proud of the Antitrust Division’s staff and our state law enforcement partners whose tireless work ensured another airline merger would not harm American travelers.”

The court’s decision follows a 17-day trial that began in October 2023. In March 2023, the Justice Department, California, Maryland, Massachusetts, New, Jersey, New York, North Carolina, and the District of Columbia sued to stop the merger under Section 7 of the Clayton Act.

Justice.gov. 01/16/2024.

This is not an area of law that I’m really comfortable with spouting an opinion on, but I did read the first few pages of the 119 pg ruling; the take away I come away with, is that the judge has blocked the deal only in it’s “current” form. The judge did not bar the merger completely as the DOJ requested.


Overdraft Fees Tweets

From Wednesday…

From the Consumer Financial Protection Bureau (CFPB)…

01/17/2024:

CFPB Proposes Rule to Close Bank Overdraft Loophole that Costs Americans Billions Each Year in Junk Fees:

The Consumer Financial Protection Bureau (CFPB) today proposed a rule  to rein in excessive overdraft fees charged by the nation’s biggest financial institutions. The proposal would close an outdated loophole that exempts overdraft lending services from longstanding provisions of the Truth in Lending Act and other consumer financial protection laws. For decades, very large financial institutions have been able to issue highly profitable overdraft loans, which have garnered them billions of dollars in revenue annually. Under the proposal, large banks would be free to extend overdraft loans if they complied with longstanding lending laws, including disclosing any applicable interest rate. Alternatively, banks could charge a fee to recoup their costs at an established benchmark – as low as $3, or at a cost they calculate, if they show their cost data.

“Decades ago, overdraft loans got special treatment to make it easier for banks to cover paper checks that were often sent through the mail,” said CFPB Director Rohit Chopra. “Today, we are proposing rules to close a longstanding loophole that allowed many large banks to transform overdraft into a massive junk fee harvesting machine.”

The proposed rule would apply to insured financial institutions with more than $10 billion in assets, which covers approximately the 175 largest depository institutions in the country. These institutions typically charge $35 for an overdraft loan, even though the majority of consumers’ debit card overdrafts are for less than $26, and are repaid within three days.

Approximately 23 million households pay overdraft fees in any given year. The CFPB estimates that this rule may save consumers $3.5 billion or more in fees per year. The potential savings would translate to $150 for households that pay overdraft fees.

Consumer Finance.gov. 01/17/2024.

The Truth in Lending Loophole

In 1968, Congress enacted the Truth in Lending Act. In 1969, the Federal Reserve Board wrote rules to implement the new law, which generally required lenders to clearly disclose the cost of credit to a borrower. At the time, many families received and sent checks through the mail, and had little certainty about when their deposits and withdrawals would clear. When a bank clears a check and the consumer doesn’t have funds in the account, the bank is issuing a loan to cover the difference. The Federal Reserve Board created an exemption to Truth in Lending protections if the bank was honoring a check when their depositor “inadvertently” overdrew their account. At the time, this was used infrequently and there was a modest cost. It was not a major profit driver.

However, in the 1990s and early 2000s, with the rise of debit cards, institutions began raising fees and using the exemption to churn high volumes of overdraft loans on debit card transactions. Annual overdraft fee revenue in 2019 was an estimated $12.6 billion. And, in 2022, Wells Fargo and JPMorgan Chase led the way – accounting for one-third of overdraft revenue reported by banks over $1 billion.

Recent policy changes at some banks have lowered overdraft fee revenue to about $9 billion per year. The policy changes followed enforcement and supervisory efforts by the CFPB to root out illegal overdraft practices, such as charging fees to consumers who had enough money in their account to cover the transaction at the time the bank authorized it.

Consumer Finance.gov. 01/17/2024.

Proposed Rule

The proposed rule would require very large financial institutions to treat overdraft loans like credit cards and other loans as well as to provide clear disclosures and other protections. Many banks and credit unions already provide lines of credit tied to a checking account or debit card when the consumer overdraws. The proposal provides clear rules of the road to ensure consistency and clarity.

The CFPB also is proposing to limit the longstanding exemption to overdraft practices that are offered as a convenience, rather than as a profit driver. The proposed rule would allow financial institutions to charge a fee in line with their costs or in accordance with an established benchmark. The CFPB has proposed benchmarks of $3, $6, $7, or $14 and is seeking comment on the appropriate amount.

Consumer Finance.gov. 01/17/2024.

CFPB’s Junk Fee Efforts

The proposed overdraft rule is part of a continued effort by the CFPB to rein in junk fees and spur competition in the consumer financial product marketplace. In early 2022, the CFPB launched an initiative to save Americans billions in junk fees, which generated more than 80,000 responses from the public. The overwhelming majority of the responses were complaints about overdraft fees.

The CFPB has taken multiple actions to curb out-of-control overdraft fees and other junk fees prevalent in consumer financial products. The CFPB issued guidance to rein in surprise overdraft fees in October 2022. It also took enforcement actions against Wells FargoRegions Bank, and Atlantic Union to return to consumers $205 million, $141 million, and $5 million in unlawful fees, respectively, in addition to significant civil money penalties paid to the CFPB’s victims relief fund.

Additionally, the CFPB’s recent supervisory efforts resulted in financial institutions returning $120 million in junk overdraft and non-sufficient funds fees to consumers. And in a separate enforcement action, the CFPB ordered Bank of America to pay $90 million for, among other things, double-dipping on non-sufficient funds fees.

After the CFPB began its work to tackle junk fees, many banks began reforming their overdraft and non-sufficient funds fees policies. Those reforms have resulted in $3.5 billion in annual savings on overdraft fees and an additional $2 billion in savings on non-sufficient funds fees.

The CFPB has also taken actions on credit card late fees and customer service fees. In February 2023, the CFPB proposed a rule to rein in excessive credit card late fees. In October 2023, the CFPB issued an advisory opinion to halt large banks from charging illegal junk fees for basic customer service.

The CFPB is one of many independent regulatory agencies and cabinet departments that are members of the White House Competition Council , established by the Executive Order on Promoting Competition in the American Economy.

Read the text of the CFPB’s proposed rule, Overdraft Lending: Very Large Financial Institutions.

Read the Unofficial Redline of the Overdraft Lending: Very Large Financial Institutions Proposed Rule .

Comments must be received on or before April 1, 2024.

Read the CFPB’s fact sheet on the proposed rule .

Read the CFPB’s research report, Overdraft and NSF Practices Report .

Read Director Chopra’s remarks on the proposed rule.

Read more about the CFPB’s work on junk fees.

Consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who they believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov.

Consumer Finance.gov. 01/17/2024.

Statement from President Joe Biden on the CFPB’s Proposed Rule to Curb Overdraft Fees:

When companies sneak hidden junk fees into families’ bills, it can take hundreds of dollars a month out of their pockets and make it harder to make ends meet. That might not matter to the wealthy, but it’s real money to hardworking families—and it’s just plain wrong. This is about the companies that rip off hardworking Americans simply because they can.
 
That’s why today, my Administration took new actions to tackle these hidden fees by proposing a rule that would end excessive overdraft fees. For too long, some banks have charged exorbitant overdraft fees—sometimes $30 or more—that often hit the most vulnerable Americans the hardest, all while banks pad their bottom lines. Banks call it a service—I call it exploitation. Today’s proposal would cut the average overdraft fee by more than half, saving the typical American family that pays these fees $150 a year. That would add up to save families $3.5 billion every year. Unfortunately, some Republicans in Congress continue to defend these exploitative fees.
 
This is just one part of my Administration’s broader plan to lower costs for hardworking families. We’re going to continue doing everything in our power to bring down costs and grow our economy from the middle out and bottom up, while standing up to extreme Republican attempts to provide more giveaways to the wealthy and big corporations and undermine competition.

White House.gov. 01/17/2024.

“New” from the White House…

01/16/2024:

01/17/2024:


This is an Open Thread.

About the opinions in this article…

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About Tiff 2551 Articles
Member of the Free Press who is politically homeless and a political junkie.