UNIDENTIFIED REPORTER, BYLINE: This is PLANET MONEY from NPR.
JACOB GOLDSTEIN, HOST:
In a couple months, when Joe Biden becomes President Biden, it is very likely that the Senate will be controlled by Republicans, which means not that many laws are going to get passed in the next couple of years.
KENNY MALONE, HOST:
But presidents have gotten very good at doing things without Congress. They have spent decades learning how to get around gridlock with executive orders, rules, regulations. There are lots of things Biden is going to be able to do without Congress.
GOLDSTEIN: We've heard about some of the big, obvious Day 1 things - you know, rejoin the World Health Organization, get back into the Paris climate agreement. But on top of those, there are a lot of other things that Biden can and may well do without Congress that could have a big effect on people's economic lives - things we haven't heard as much about. So those are the things we're going to talk about on today's show.
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MALONE: Hello, and welcome to PLANET MONEY. I'm Kenny Malone.
GOLDSTEIN: And I'm Jacob Goldstein. We called up a bunch of people who are experts in different fields - in finance, housing, trade - and we asked them, what are some big, important things Biden can do as president without Congress?
MALONE: Today on the show, bank accounts for everybody, making the most of Trump's trade war with China, firing a formerly unfireable bureaucrat and, also, the rule of the suburbs.
So we've got four chapters today. First up, Chapter 1 - bank accounts for everybody.
GOLDSTEIN: So the show I'm doing is basically things - economic things Biden can do without Congress. And you just wrote a nice listicle to that effect.
AARON KLEIN: Thank you.
GOLDSTEIN: And there was one sentence in particular that jumped out at me that I want to talk to you about.
GOLDSTEIN: That sentence is, all banks should be required to offer low-cost, no-overdraft, safe bank accounts. Can Biden make banks do that?
MALONE: This declarative statement comes from Aaron Klein. He used to work at the Senate banking committee and at the Treasury Department. Now he is at the Brookings Institution.
GOLDSTEIN: And he says there is this problem in America. Millions of people don't have bank accounts. This is inconvenient. It's hard to pay bills. It's dangerous. Your money can get stolen.
MALONE: So why, then, don't more people have bank accounts?
KLEIN: The No. 1 reason why unbanked people don't have bank accounts - bank accounts are expensive if you don't have much money.
GOLDSTEIN: You know, if you can't meet some minimum balance in a bank account, often you have to pay high fees just to keep the account open.
MALONE: And then there are more fees if you overdraw your account - if you take out more money than is in your account. So as a result, lots of people, especially people without a lot of money, go without bank accounts altogether.
GOLDSTEIN: So, like, describe for me this bank account that you think should - that you think every bank should offer. Tell me about that account.
KLEIN: Right. So that - first of all, that account does not have overdraft. So if you run out of money, your transaction is declined. And so you have a $3 monthly maintenance fee. You get two free money orders a month. All of your checks can be deposited at the bank for free.
GOLDSTEIN: Online bill pay, I assume.
KLEIN: Correct. Online and mobile banking, online bill pay, electronic checking, full ATM access, right? You don't get paper checks, but otherwise, it would feel like a regular bank account in every other sense.
MALONE: So that is what the account would look like. But the next question is, how can Biden do this? And the simple answer is because as president, he will appoint the people who regulate the banks.
GOLDSTEIN: There's also a slightly less simple answer that I find super-interesting, and that is this. So in other industries, regulators do not get to order companies to sell certain products.
MALONE: Yeah. Like, you know, Biden's trade regulators are not going to be able to order, like, Nike to issue cheaper Air Force 1s or something like that.
GOLDSTEIN: But banks aren't like shoe companies, aren't really like any other business at all. Banks are really special. You know, they're kind of at the center of the economy. They hold federally insured deposits. They keep our money safe. And so in order to be a bank, you actually have to get a special charter from the government. And that charter gives the government power over banks.
KLEIN: Banks have a duty to serve their community.
GOLDSTEIN: Like a legal duty?
KLEIN: As part of getting a bank charter, you have a duty to serve your community. Why should the federal government tolerate banks doing things not in the best interest of society or their customer, yet still get all the special benefits of being a bank?
MALONE: So this is why bank regulators, who are appointed by the president, can force banks to offer everybody cheap, no-overdraft accounts.
GOLDSTEIN: Now, this still may not happen. You know, banks are politically powerful. They're influential in Washington, et cetera, et cetera. And Biden himself has not been pushing this idea. I got it from Aaron, not from Biden.
MALONE: But there is one last thing that Aaron mentioned that makes it seem like this could actually happen, and that is that last month, the head of the American Bankers Association - like, the big national trade group for banks - publicly suggested that every bank in the country offer accounts similar to the ones Aaron Klein is describing.
GOLDSTEIN: And it's unclear, frankly, exactly why this happened, you know, now, a couple of weeks ago. But a couple things do seem relevant. One is some politicians have been calling for the government to offer cheap bank accounts, like, say, at the post office. And also, the other thing is tech companies are starting to compete with banks by offering bank-like services. You know, think of Venmo. So you have politics and profits starting to point in the same direction. And, you know, maybe both of those things are pushing the banks to change.
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MALONE: Chapter 2 - making the most of Trump's trade war with China.
GOLDSTEIN: So we had this trade war with China, haven't heard much about it for a while. But we do still have high tariffs on lots of stuff that comes into this country from China - tariffs on industrial equipment, on tools, on clothes, on luggage.
MALONE: Those tariffs are taxes. They are not paid by China. They are paid by U.S. companies bringing stuff into this country. That is how tariffs work.
GOLDSTEIN: And President Trump put these tariffs in place without going through Congress, which means this is yet another area where President Biden will have a lot of authority. He doesn't need congressional approval to raise or lower or keep these tariffs in place. And to get a sense of what he might do with this power, I talked with Soumaya Keynes, who is the trade and globalization editor at The Economist.
What's Biden going to do with this?
SOUMAYA KEYNES: He said he will reevaluate the tariffs, right? And so thanks, Mr. President-elect, for giving us so much detail on that.
GOLDSTEIN: So that's interesting, right? I mean, he - it's interesting that he did not say, as he said with other things President Trump has done - he did not say, look; I'm just going to get rid of all this, and we're going to go back to where we were four years ago. That seems maybe significant.
KEYNES: Yeah. I mean, I don't think there are that many votes to be won right now in being softer on China. And so I think there was a political point there. You know, one thing you could do is keep the tariffs on and use them as some kind of leverage to get something out of the Chinese. You know, if you decided that you want to lower them because it's good for your economy, then you might as well get something out of it.
GOLDSTEIN: And what are the kinds of things that the Biden administration might want to get out of China in exchange for lowering these tariffs?
KEYNES: Well, there's a very long list of problems that American negotiators have had with Chinese economic practices. So one is that when companies operate in China, in some sectors, they still have to go in partnership with Chinese ones. So there are rules on - that you have to be part of a joint venture if you want to invest in China.
But they find that when they start going into these joint ventures, you know, lo and behold, they're having to hand over a bit more of their intellectual property than they wanted. And perhaps they just don't have as much power in that relationship as they want.
And so one thing that U.S. negotiators could demand is to get rid of those joint ventures. And I actually think that's something that Biden mentioned in one of the debates and said that looks like it could be a target for them.
GOLDSTEIN: So he might say, I don't love these tariffs that the Trump administration put in place, but let's see if we can agree to lower these tariffs in exchange for China making it easier for U.S. businesses to go in and do business in China without having to set up a joint venture with a Chinese company.
KEYNES: Right. He could do that - pretty much, yeah.
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MALONE: Chapter 3 - the rule of the suburbs, as in a rule about the suburbs.
GOLDSTEIN: This one I found because of that theme President Trump kept talking about this summer, about how Joe Biden wanted to destroy the suburbs. This was around the same time the president was talking about law and order. Essentially, he was talking about race and the suburbs.
But it wasn't just the law and order thing. In fact, there is a rule about housing that affects the suburbs and that the president has the power to change. President Trump did change this rule, and Biden might change it again. Claudia Aranda of the Urban Institute explained it to me.
CLAUDIA ARANDA: A lot of the conversations that have been about the suburbs have stemmed from the Affirmatively Furthering Fair Housing rule.
GOLDSTEIN: So I just want to pause 'cause the...
GOLDSTEIN: ...Name is a little bit of a mouthful.
GOLDSTEIN: Affirmatively Furthering Fair Housing rule.
MALONE: This is fundamentally an anti-discrimination rule that the Obama administration put in place in 2015. It applies to cities. It applies to counties. It applies to even states.
GOLDSTEIN: And the first thing this rule did was it created these tools - mapping tools, data tools - that cities could use to study disparities in housing based on race, among other factors, so they could figure out, you know, who did or didn't have access to schools, parks and transportation.
MALONE: But the data itself and the tools - those were not really the point of the rule.
GOLDSTEIN: I mean, ultimately, we don't care that much about the data or the process, right? Those things are a means to an end. Like, tell me, what is the end?
ARANDA: So it would hurt some of my colleagues' feelings at the Urban Institute to hear that...
ARANDA: ...That we don't care that much about the data and the maps and the tools. But I won't tell them that you said this. But ultimately, the larger goals of making sure that everyone in a community, regardless of their background, regardless of whether they speak English or not - that they will have equal access to transportation, which affects your being able to access jobs in many cases, that it will - that you will have equal access to good schools, that they will have equal access to housing and housing opportunities.
MALONE: And to that end, this rule from 2015 tells cities and counties and states, after you've used the data and the maps, you have to tell us, the federal government, what you have found and what you intend to do about it - change zoning or transportation routes or whatever. And if you don't do those things, you're going to lose federal housing money.
GOLDSTEIN: The Trump administration did not like this rule. And so this year, they killed it. They got rid of the rule. In a press release, they talked about giving local communities more control and taking away the burdens of having to report all this data to the federal government. The press release also said, quote, "the suburb destruction will end with us." So that is apparently what the suburbs thing was largely about, though it also kind of got mixed up with the law and order stuff the president was talking about this summer.
MALONE: Now Biden says he is going to bring that rule back. So the data, the maps - they're coming back, along with the requirement that cities and states try to solve whatever problems they find.
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MALONE: After the break, firing the unfireable bureaucrat.
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MALONE: All right, last chapter, Chapter 4 - firing the unfireable bureaucrat.
GOLDSTEIN: This is a story about the Consumer Financial Protection Bureau, the CFPB, which is the government organization that's supposed to make sure that, you know, banks don't get too tricky with their customers.
MALONE: And to understand this chapter, we're going to need to go back to the founding of the CFPB, not long after the financial crisis of 2008.
GOLDSTEIN: One of the people who helped design the bureau was Lisa Rice. She is now the CEO of the National Fair Housing Alliance, an advocacy group. And she told me one of the essential things they decided was this new bureau would be run by a really powerful director, who would be chosen by the president and confirmed by the Senate, and then it would be really hard to fire the director until their five-year term was up.
LISA RICE: It should be hard for the president to fire the director because you've got to have somebody who is shielded from those kinds of attacks and threats so that they can do their job for the American people. You're going up against these very well-connected business interests.
MALONE: So they write this powerful, protected director into the law that creates the CFPB.
RICE: The director could only be removed for inefficiency, neglect or malfeasance.
RICE: So it's a pretty high bar.
GOLDSTEIN: So they have to be really screwing up, basically - some legal bar that means really screwing up.
RICE: Had to be screwing up - correct.
MALONE: So the law passes, the CFPB is created and a very powerful, hard-to-fire director is appointed. And this bureau goes on a kind of crackdown. They get billions of dollars in settlement payments from banks and other companies.
GOLDSTEIN: But all along, there was an argument against having such a hard-to-fire director. The argument, which came in part from the companies the CFPB was regulating, was that it was unconstitutional to give so much power and independence to this one person who wasn't elected and wasn't really answerable to anyone.
MALONE: And so in 2017, there was a lawsuit making this argument. It came from a debt relief firm in California that was being investigated by the CFPB. And they argued in federal court that the president of the United States should be able to fire the director of the CFPB at will for any reason at all.
GOLDSTEIN: Did you have a view on that case?
RICE: Oh, yeah, absolutely. We felt that the case should fail, and we thought that that was wrong, that that was a wrong take.
GOLDSTEIN: What happened in that court case?
RICE: The Supreme Court decided that the strong director was unconstitutional and that the president of the United States should have the right to remove the director.
GOLDSTEIN: And you think that was basically a mistake, that was a bad decision?
RICE: I do. I do.
MALONE: And yet, this decision does mean that as soon as he becomes president, Joe Biden can fire the CFPB director. And the current CFPB director was appointed by President Trump in 2018. And Lisa says this director has not been as aggressive as she would like. The bureau itself hasn't been as aggressive as she thinks it should be.
GOLDSTEIN: So how do you think about this Supreme Court decision?
RICE: I don't know how to think about it, right? I mean, you can look at it as being a double-edged sword, or you can look at it as being something that may end up actually helping consumers in the long run. I honestly don't know how to think about it at this point.
We do have an opportunity, because of the weird way that the Supreme Court ruling came out, to install a director. And I believe that President Biden will install that person as soon as he possibly can.
MALONE: Lisa still thinks the Supreme Court decision was a mistake. But at this particular moment, she says if Biden needs to, he should take advantage of it.
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MALONE: Today's episode was produced by Nick Fountain, with help from Gilly Moon. Our editor is Bryant Urstadt. Alex Goldmark is our supervising producer.
GOLDSTEIN: I'm Jacob Goldstein.
MALONE: I'm Kenny Malone.
GOLDSTEIN: This is NPR. Thanks for listening.
(SOUNDBITE OF BEN SUMNER, GLENN HERWEIJER AND LAWRENCE MAU YIP WONG'S "HIGH UP")
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