Yesterday, ladies and gentlemen, and Monday, too, I spent some time talking about Bank of America and a new $5 charge to use your debit card. I went to great lengths to explain to you why the charge popped up. Two reasons, just to review. The Dodd-Frank -- Chris Dodd, Barney Frank -- financial regulatory reform bill, which ostensibly (the way it was pitched and sold) was a consumer protection bill, to make sure that these Wall Street titans and these big banks weren't able to continue screwing everybody. So they pass the Financial Regulatory Reform Act, which imposes all kinds of new charges and taxes, if you will, on banks; and at the same time forces them to reduce other charges. They're basically trying -- they're not "trying," they did -- running elements of the banking business. One of the things that they mandated in Dodd-Frank was a reduction in transaction fees and 44¢ to 24¢ every time a credit card's swiped.
Well, the banks simply said, "Okay, well, fine. We're gonna make that money back elsewhere. We've got shareholders, and we have a profit motive, and we're doing it now. This is the time for profit, it's always the time for profit. We have to show a profit, that's why we have to try for a profit. That's why we're in business." So to make up what they were forced to lose, they started charging $5 for debit card usage. This then created what has become standard operating procedure. Here you have the Colonel Sanderses of the chicken house -- the Democrats in the Senate, Chris Dodd and Barney Frank -- passing legislation that is detrimental and harmful to the banks and consumers ultimately. This is always the result whenever the Democrats tell you that they're engaging in legislation to make things more affordable for you, without fail, things are going to become more expensive, as this case and story demonstrates.
But the real culprit is Senator Durbin. And Senator Durbin had an amendment. And his amendment, without reading the word, without working you with all the details of it, is specifically is why Bank of America instituted the $5 charge for debit card use. So when that happens Durbin goes to the floor of the US Senate on Monday and urges Bank of America customers to stop doing business! "Get outta that bank! Go to a smaller community bank where they're not charging you these fees and ripping you off," and that's not his job and that is irresponsibility and could be tortious interference. It could be illegal if done by anybody else.
He goes to the floor of the US Senate and is urging people to leave Bank of America. Now, again, I'm gonna tell you, I got no brief for Bank of America. I don't use Bank of America, I don't know anybody at Bank of America. My point is that the federal government has got no business running day-to-day operations, nor do they have any business setting fees or prices at banks. The market does that, and now they have interfered. So now that the new fees have been charged because of his amendment, Durbin now acts outraged. How dare these people, when all that's happened is the banks have reacted to Durbin's law. Durbin just expects -- like every other Democrat -- they are gonna pass a law mandating that this industry pay more in taxes or that a group of individuals pay more taxes.
And what happens is the targets end up finding ways around it because the Democrats fail to score all this stuff dynamically. They just think that their targets are gonna bend over, grab the ankles, and take it -- and of course their targets are far more creative than these dunderheads in the Senate who haven't the slightest clue what goes on in a free market. So then Durbin goes to the floor of the Senate and he wants to be the hero, and he wants to tell you these banks are screwing you and they're trying to defy our consumer protection efforts and our wonderful financial regulatory reform bill, and his solution is to actually tell you to leave Bank of America, which could cause a run on that bank -- and if you doubt me check Chuck Schumer and the IndyMac bank out in California.
He did start a run on that bank and that was one of the things that led to the 2008 financial meltdown. It was part of it. So yesterday the Washington Post -- and we did this story yesterday but we didn't get the Post version of it: "Banks Defend Debit-Card Fees Amid Pressure from Washington -- The banking industry on Tuesday defended a controversial new fee on debit cards as some Democrats called on consumers to abandon financial institutions that impose the charge. Rep. Brad Miller (D-NC) introduced a bill that would make it easier for customers to close their accounts and prohibit banks from assessing fees for the process. Meanwhile, Sen. Richard J. Durbin (D-Ill.) sent a letter to community banks and credit unions in his home state urging them to 'seize this competitive opportunity' to woo consumers away from larger institutions."
Well, this is piling one outrage on top of another. First Durbin tells everybody from the Senate floor to leave Bank of America, and then he sends a letter to smaller banks in Illinois and tells them to "seize the opportunity" that he has given them by forcing people out of Bank of America to go get them as new customers! "'Politicians may not have the highest approval ratings, but I don’t think Wall Street banks and credit cards do either,' Durbin said. The debate centers on a $5 monthly fee that Bank of America plans to begin charging next year to customers with the most basic checking accounts who use their debit cards to shop." Now, to me, is unacceptable and outrageous. Even with my vast vocabulary, I'm having trouble coming up with words that adequately express my anger about this.
Because the reason all this is happening is Dick Durbin, yet Dick Durban gets to sit here and make it look like he's riding to everybody's rescue when what he's trying to do is destroy Bank of America. It's not his job to destroy Bank of America. He and Barney Frank and Chris Dodd took aim at banks with their legislation. What are the banks supposed to do just sit there and (as I say) bend over, grab the ankles, and take it? And now "Rep. Brad Miller (D-NC) introduced a bill that would make it easier for customers to close their accounts... Banks say the fees are the consequence of a new federal rule ..." Everybody would have been fine. There wouldn't have been a debit card charge if there hadn't been a financial regulatory reform bill, folks.
Now, I realize (sigh) that I'm probably on the losing end of this. I understand the emotion. I remember when ATM fees went up 25¢. People just had a cow, and I didn't understand it on the basis that other things in life are far more expensive than that. This really ticked people off, and it wasn't a large increase at all. So it's a cumulative effect of the Democrat Party demonizing banks and financial institutions -- and all the while, at the end of the day behind closed doors when it's time to donate and fund-raise, guess who the Democrats call on? This cockeyed group of protestors protesting all this capitalism, who do they think Obama's in bed with? The very people they're protesting!
They are urging the reelection of a guy who's doing exactly what they say they detest. They're just dumb. They're just stupid. And that's what Durbin's counting on is that everybody in the country is going to be stupid and not realize that he's the reason all this happened, and Barney Frank, and Chris Dodd. And Barney Frank and Chris Dodd and whoever knows who, are behind Fannie Mae and Freddie Mac; the housing crisis. The reason your home is underwater is the Democrat Party. Business Insider, story published yesterday. "This morning we touched on Obama's comments with regard to Bank of America's controversial, $5/month debit card fee.
"When asked about it by George Stephonopolous (sic), Obama said that it was stuff like this called for the Consumer Financial Protection Bureau." So, see? You use Dodd-Frank to create chaos in the banking business, and that chaos then you use as a reason to create a new bureaucracy to regulate, control, and do damage to the banking business. Use Dodd-Frank to cause an increase in fees and then punish the fee increase. It's what's known as a "double bind," and only authoritarians who hate the private sector would do something like this. So you cause the fees to go up and when that happens then you create a new bureaucracy to deal with it. It's the way of the world for these people.
RUSH: You know, these student protestors, Bank of America and all these things, they remind me, remember the irony, the Wall Street protesters complaining about their student loans? Everybody always complains about their student loans. Yeah. Some quit college to go to the protest. Everybody's always complaining about their student loans. Well, who is in charge of handling student loans these days? If I'm not mistaken, Obama took that over shortly after he took over General Motors and Chrysler.
That's right, the White House, they put themselves in charge of student loan program, and now look at the mess that student loans are in. There is said to be more than a trillion dollars outstanding debt in student loans. (interruption) You think so, you think they're gouging? What about profit? What about tuition? How come nobody at the regime ever talks about trying to bring the cost of education down? It's 'cause their buddies work there and that's their standard of living.