President Barack Obama launched a broad onslaught against banks on Thursday, tapping into public anger over rising fees to garner populist support ahead of his 2012 re-election campaign.
Mr. Obama, a Democrat who is pressing his case for re-election with unemployment stuck above nine per cent, said his Republican opponents’ primary plan to boost the economy involved rolling back financial reforms his administration fought to pass.
Mr. Obama spoke at a White House news conference after thousands of anti-Wall Street demonstrators protested at New York’s financial district and in several U.S. cities this week against economic inequality and the power of U.S. financial institutions.
“I think people are frustrated and the protesters are giving voice to a more broad-based suspicion about how our financial system works,” Mr. Obama told reporters.
Mr. Obama said his so-called “Dodd-Frank” financial reform bill was designed to prevent Wall Street abuses, and his emphasis on the subject indicated he would use that theme heavily in the 2012 presidential race.
“For us to have a healthy financial system, that requires that banks and other financial institution systems compete on the basis of the best service and the best products and the best price,” Mr. Obama said.
“And it can’t be competing on the basis of hidden fees, deceptive practices or derivative cocktails that nobody understands and that expose the entire economy to enormous risks. That’s what Dodd-Frank was designed to do.”
Mr. Obama said the recent hikes in fees charged by U.S. banks were not a good practice and were likely unfair for consumers.
He said in some cases banks may be jacking up fees because other charges have been prohibited, which is not a “good practice,” and “not necessarily fair to consumers.”
The president said banks can charge what they like as long as there is accountability and transparency, and that it is appropriate for the government to play an oversight role.
Though criticizing Wall Street can tap into populist support, it could hurt Mr. Obama’s campaign pocketbook. Like other presidential candidates, Mr. Obama is courting Wall Street contributions for his political goals.