MINNEAPOLIS (TheStreet) -- Wells Fargo (WFC) CEO John Stumpf issued perhaps his bluntest criticism of new bank regulations in a speech and Q&A session on Tuesday in his native state of Minnesota, saying "government price controls" have put an undue burden on his industry.
|Wells Fargo CEO John Stumpf.|
Stumpf, who leads the country's fourth-largest bank and second-largest mortgage servicer, also issued grim predictions for the housing market and income inequality if lawmakers don't set better policies going forward.
He was particularly critical of new rules related to debit and credit cards that will hinder banks' ability to charge fees, raise interest rates and manage risk. A proposal by the Federal Reserve related to debit-card interchange fees that banks charge merchants will cut it a level of to 12 cents per swipe, down 72% from the typical 44 cent per swipe fee they now charge, according to research firm R.K. Hammer.
"We have government price controls [in banking] for the first time," Stumpf said during a luncheon at the Economic Club of Minnesota, according to a report in the Minneapolis newspaper Star Tribune. "As I talk to senators, I ask them, 'What is the next product you want to manage and control?' ... Should we regulate the cost of computers?"Stumpf also reiterated support for a government backstop of the mortgage market, a position he has expressed in the past. Congress is now starting to debate the future of housing finance and how to overhaul Fannie Mae (FNMA.OB), Freddie Mac (FMCC.OB) and other government-sponsored enterprises that have become enormously costly for taxpayers due to the housing market collapse. Fannie and Freddie provide guarantees on mortgage bonds that give investors peace of mind, while other GSEs provide additional funding for affordable housing. According to a report in a Minnesota business publication, Stumpf said that the banking industry simply doesn't have enough capital to support the nearly $11 trillion U.S. mortgage market on its own. And, without government backstops, investors would be less willing to buy mortgage bonds. "Without that, we'd return to the practice of rationing home mortgages," Stumpf said, according to Finance and Commerce. "We don't want to go back to that."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV