Geithner Says Obama Doesn’t Believe in Limits on Profitability
U.S. Treasury Secretary Timothy F. Geithner, responding to criticism of President Barack Obama’s remarks about bank fees, said the administration doesn’t think government should determine corporate profitability.
“The president believes, as I believe, that it’s not the role of government to determine how profitable firms are,” Geithner told the House Financial Services Committee today. Geithner was answering a question by Alabama Republican Spencer Bachus, the panel’s chairman, about comments Obama made in an Oct. 3 interview with ABC News.
“If you say to the banks, ‘You don’t have some inherent right just to, you know, get a certain amount of profit if your customers are being mistreated, that you have to treat them fairly and transparently,’” Obama told ABC. “And my hope is, is that you’re going to see a bunch of the banks who say to themselves, you know what, this is actually not good business practice.”
Bank of America Corp. (BAC), the biggest U.S. lender, is joining rivals including JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and SunTrust Banks Inc. (STI) in rolling out new charges for debit-card users as Dodd-Frank Act rules imposed by the Federal Reserve take effect this month. The limits may reduce annual revenue at the biggest U.S. banks by $8 billion, data compiled by Bloomberg Government show.
Richard Hunt, the president of the Consumer Bankers Association, said Oct. 4 that he was “very disappointed” by Obama’s remarks.
“Recent announcements from banks across the country regarding new fees for debit purchases and eliminating free checking are all widely predicted consequences from the government price controls,” Hunt said in a statement.
To contact the reporter on this story: Ian Katz in Washington at Ikatz2@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at firstname.lastname@example.org