President Obama’s Bank Fees
TOM HUDSON: You heard it, the president wants banks to pay back every single dime of taxpayer bailout money they got. Susie, he wants to slap them with billions of dollars in fees. SUSIE GHARIB: Tom, he really stirred things up and the banks fired back, saying paying those fees will lead to a cut back in lending and job creation.
KAREN PETROU, MANAGING PARTNER, FEDERAL FINANCIAL ANALYTICS: I think it’s like a sin tax.
GERSH: Karen Petrou specializes in analyzing Federal financial regulation.
PETROU: We’ve never gotten people to stop drinking because we’ve charged them a nickel on a bottle of scotch. And I don’t see how this reforms financial industry practice.
GERSH: In a normal year, banks make $200 billion in pre-tax profits, so they can pay this fee, but Petrou expects most of it will be passed along.
PETROU: And the higher your cost of operating is, you have to find a way to reflect that. Some of that might be through reduced profits and some of it would be through passed-along costs to individual customers. It’s not a big cost.
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