During a Senate Banking Committee hearing on Thursday, Sen. Tim Scott (R-SC) gave opening remarks about Democrats going after junk fees.
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NewsTranscript
00:00 Mr. Chairman, thank you to the witnesses for being with us today.
00:03 At last week's hearing, we heard from my colleagues on the other side of the aisle
00:07 that the high prices Americans are paying as they struggle to put food on the table
00:12 and face mounting debt are the result of greedflation and shrinkflation.
00:18 And today, it's a similar story.
00:20 This time, the boogeyman is so-called junk fees, and these fees are to blame for the obvious
00:27 economic pain Americans are feeling.
00:31 Not skyrocketing inflation, not increasing global instability,
00:39 and certainly not the slush fund known as the Inflation Reduction Act.
00:45 Clearly, there is no shortage of finger pointing for the failure of binomics,
00:50 or as I like to call it, brokenomics,
00:53 because that's what's happening to the average American family.
00:58 My Democratic colleagues and this administration have deployed a herd of scapegoats
01:03 to deflect blame for the economic harm they have brought upon American households.
01:10 Instead of taking responsibility for the real consequences of unchecked spending
01:14 and increased regulation across the economy,
01:17 the Biden administration would rather throw a towel over the mirror and say, "Not me."
01:24 Sure, it might be easy or even politically expedient to slap a label of "junk" or "excessive"
01:33 on additional costs for legitimate products and services
01:37 in an effort to villainize business in America
01:42 so that they themselves do not have to face the reality that binomics,
01:49 brokenomics, is causing devastation after devastation
01:56 after devastation upon the shoulders of the American people.
02:01 But it is long past time that Democrats stop playing political games with price controls
02:08 and trying to micromanage the business operations,
02:11 especially when the real outcome of these feel-good games
02:17 is reducing access to credit and limiting economic opportunity for those who need it most.
02:26 That's why I introduced a CRA resolution to overturn the CFPB's credit card penalty fee rule.
02:34 Let's be clear about what this rule will mean for American families.
02:39 It will result in lower credit limits and higher interest rates for borrowers.
02:45 It will result in new fees for services that are currently provided free of charge.
02:51 Finally, and perhaps worst of all, this rule will cut off access to credit
02:57 and stymie financial inclusion for the families who need it most.
03:02 Sadly, I wasn't surprised when the CFPB finalized the credit card penalty fee
03:07 just days before the President's State of the Union Address.
03:11 That's the politics of this administration.
03:14 Actions that sound good as talking points,
03:17 just like the billions of dollars of student loan forgiveness,
03:22 but they are truly divorced from economic reality.
03:25 And it's not just the financial sector.
03:28 It's everything, everywhere, all at once.
03:32 That's what astounds me.
03:35 This administration's rhetorical hypocrisy.
03:39 The White House has claimed that a junk fee is a charge designed either to confuse or deceive
03:46 consumers.
03:46 Ironically enough, two of the recent targets within the committee's jurisdiction,
03:51 overdraft and credit card late fees, are two of the most highly regulated
03:57 and transparent business practices in any industry.
04:01 The credit card late fees and overdraft fees we are discussing here today are, in fact,
04:07 not illegal and are heavily regulated.
04:10 And while we are on the subject of regulation, if Democrats actually wanted to address the
04:16 junk fees that American families are facing, a good place to start would be the enormous costs
04:24 that consumers are paying due to the Biden administration's regulatory onslaught.
04:29 It's an albatross around every family trying to make ends meet.
04:36 Since he took office, the total cost of President Biden's regulatory nightmare,
04:42 the mountain of red tape, is $1.37 trillion.
04:48 That's $1.37 trillion.
04:53 T.S. and Tom.
04:54 Dollars.
04:55 Paid by everyday families in the form of higher prices because of these new regulations.
05:03 This contributes to the increased costs for food, housing, vehicles, and all the other
05:08 basics a family must have just to survive.
05:13 And this happens while inflation is raging.
05:17 If my friends on the other side of the aisle were truly interested in helping the American
05:22 family, the American people, this hearing would be about finding solutions to tame the inflation
05:29 that has increased the cost of goods by almost 20 percent since President Biden took office.
05:35 We should be discussing how real average hourly wages have decreased under this administration.
05:41 Remember, 52 paychecks in a row where inflation was higher than wage increase.
05:50 And we would be discussing how President Biden has promised to let the TCJA, the Tax Cuts and
05:58 Jobs Act, expire next year, which would result in a two and a half trillion dollar tax increase
06:05 on the American family.
06:07 But that's not the conversation we're having today.
06:11 Unfortunately.
06:14 In closing, it is my hope that we will hear today how misguided the administration's attempts
06:21 are to push the financial services industry into only offering a one size fit all products
06:28 when we should be really focusing on providing solutions to the financial
06:33 hardships facing Americans.
06:34 Let me just close with one example.
06:39 Everyone I know hates paying a late fee.
06:45 But the late fee is oftentimes the one thing that encourages us to take our bills more
06:56 seriously, because ultimately, a late fee represents a late payment.
07:01 And if you are late on your payment, ultimately, your credit score goes down, which means that
07:07 the cost of borrowing goes up undeniably.
07:10 If we really want to save Americans more money, we should focus not on these fees that encourages
07:21 better payment history.
07:24 So your credit score goes up and your interest rates go down.
07:27 We should focus on the cost of gas up 40%.
07:32 We should focus on the cost of energy up 30%.
07:35 We should focus on the cost of food up 20%.
07:38 Not on late fees.
07:40 Thank you, Senator Scott.