Lenin Nolly/NurPhoto via AP
CEOs of some of the nation’s largest banks testify before the Senate Banking Committee during an annual oversight hearing, September 22, 2022, on Capitol Hill.
As my colleague Ryan Cooper explains today, the Republicans have amped up their message on crime—as they do every election season. In the fall of even-numbered years, 30-second ads portray America as a cesspool of danger and filth, and with media allies’ reporting on crime spiking, whether or not crime actually does, the picture painted is vivid.
This is as perennial as the changing of leaf colors; it should come as no surprise to Democrats who still haven’t found a good way to talk about the issue. But one option popped up last week at an event at the White House.
Bracketed by Federal Trade Commission chair Lina Khan and Consumer Financial Protection Bureau director Rohit Chopra, President Biden took aim at “junk fees,” the vague and mysterious surcharges that show up on bank and credit card statements, airfares, cable bills, concert tickets, hotel bookings, gym memberships, and scores of other consumer purchases. They are “surprise charges that companies sneak into bills because they can,” Biden said. “They benefit big corporations, not consumers, not working families.”
New guidance from the CFPB announced at the event makes clear that unexpected overdraft fees, when a customer draws on an account that cannot cover the expense, and “depositor fees” on customers who deposit a check that bounces, are illegal under existing law. The CFPB’s focus has already led several top banks to end overdraft charges. Rules are also being developed at the FTC and CFPB to eliminate deceptive fees across all industries. Other agencies are requiring disclosure of junk fees up front, so customers can make choices that could potentially enable them to avoid them.
But there’s another way to describe hidden fees that companies spring upon customers without their knowledge: theft. If you book a hotel and there’s some unexplained “resort fee” on the bill at the end of the stay, you’ve been robbed. Maybe the hotel didn’t break into your house and rifle through your wallet, but the net result is that you’re poorer. And it’s hard to find a service that doesn’t do this at some level. Entire predatory businesses rely on customers not knowing or paying attention to bills that lard on a host of hidden fees.
These are not the criminals portrayed in the flurry of television ads. If the thief is wearing a hoodie, they’re a nightly TV star. If the robber wears a suit and does it systemically, every day, for the rest of your life, they’re anonymous, if not invisible. While Biden’s event was certainly an effort to bring them out of the shadows, a random Wednesday event at the White House relegated to the back of the business pages isn’t the only way to engage in politics over this issue.
That’s especially true because the opposition party actively resists this policy effort to end the corporate crime wave. As The Lever reported, every single Republican on the Senate Banking Committee condemned the CFPB for cracking down on junk fees, using the talking point that it would restrict access to credit. This familiar yet still amazing claim boils down to this: The criminals have to rip you off for your own good.
There’s another way to describe hidden fees that companies spring upon customers without their knowledge: theft.
Yet in the eyes of the media, the party attempting to defend the systematic looting of 300 million Americans is the tough-on-crime party. And this isn’t the only instance of Republicans’ softness on crime in recent days. Earlier this month, conservative judges on the Fifth Circuit Court of Appeals literally ruled to defund the consumer protection police by making the questionable claim that the CFPB’s funding mechanism is unconstitutional. Republicans have also recently vowed to defund the cops that prevent tax fraud, promising to roll back the $80 billion boost to the Internal Revenue Service that Democrats passed into law in August. As well, every House Republican voted in May against enabling the FTC to prevent oil industry price-gouging.
Put aside what party’s policies will actually protect people against street crime. In the battle to control the current epidemic of corporate crime, one party wants to do something about it, and the other doesn’t. In fact, they will fight pretty hard against any efforts to enforce the law.
Yet you don’t hear about this difference between the parties in the context of crime. The criminals with suits and ties, the ones with the corner executive office, are not a major feature of electoral politics. Corporate crime isn’t even called crime, and Republican candidates who rant every day about crime aren’t confronted with their service on behalf of respectable-looking burglars.
Why is that? The last actual campaign ad I remember that went after corporate crime is perhaps instructive. In 2012, Barack Obama successfully painted Mitt Romney as a private equity ghoul. One ad contrasted Romney’s statement in a debate about defunding PBS with corporate crime, making the case that Romney would look out for Wall Street while fighting Sesame Street.
But the ad’s litany of corporate criminals and “gluttons of greed” was revealing. The spot highlighted Enron’s Ken Lay, Tyco’s Dennis Kozlowski, and Bernie Madoff: two CEOs prosecuted by George W. Bush’s Justice Department, and a Ponzi schemer whose son turned him in before Obama took office. Obama had been president for four years to that point, and his ad about corporate crime couldn’t name one top executive that his own administration had put behind bars.
For too long in America, tolerance for white-collar fraud has been a bipartisan sport. No major banker went to jail for the financial crisis, nor was any major scammer indicted during the Trump administration for the biggest criminal rip-off in recent American history, the stealing of hundreds of billions of dollars in pandemic aid. Large-scale corporate prosecutions under Trump fell to an all-time low, and much of the crime that did get noticed ended in leniency agreements.
The only year in modern history that produced fewer major corporate guilty pleas and verdicts than the Trump administration was … the first year of the Biden administration. Enforcement guidelines have stiffened under Biden, but so far that hasn’t resulted in any change in the trajectory.
In other respects, however, there has been change. The penny-ante fraud, not seen in big headline perp walks but the slow grinding away at people’s savings, is now being tackled. The attempts to stiff the government on taxes are being addressed. At least some of the police are back patrolling the white-collar sector.
In an election with the usual focus on crime, the issue is playing out once again on Republican terms. If you steal a pack of cigarettes, you’ll be made famous throughout election season; if you add a hidden charge to make your company billions of dollars off the backs of the working class, you have nothing to worry about. Anytime Democratic strategists want to do something about that, they can.
