Americans for Free Markets and Pluribus News Host Fireside Chat with Former Attorney General
Former U.S. Attorney General Bill Barr on Tuesday criticized recent government overreach at the state level, warning these actions will negatively impact our national banking system and the consumers and businesses the system is intended to serve.
During a fireside chat with Pluribus News Editor Reid Wilson in Washington, D.C., Barr highlighted several concerning laws, including Illinois’s Interchange Fee Prohibition Act, which is currently being challenged in federal court.
Barr, whose organization, Center for Legal Action (CLA) for the American Free Enterprise Chamber of Commerce (AmFree), submitted an amicus brief in the case, said:
“The question is, if every state were to adopt their own version of what the fee can apply to and what it can’t apply to, what does that mean for running a national system? And it would just become impractical. And so that’s why I think this has to be struck down and eventually will be struck down.”
Barr also addressed efforts across several states to “blacklist” banks if they are perceived as discriminating against particular industries. Explaining the unintended consequences of these laws, Barr said:
“When there’s an effort by a state to take what is, by definition, a national network or system that’s meant to facilitate commerce across the country, then our antenna has to go up and say, this is a direct attack on our common market and what makes it possible.”
“I can understand why the conservative state legislatures have looked at this […] It’s going down the wrong path at the end of the day, because it validates the whole idea of using a business for political objectives…Decisions should be made based on free market principles, and so I think we stick with that principle.”
Specifically looking at the trend of states to pursue legislation targeting “debanking,” Barr urged legislatures to first get the facts, then understand the consequences:
“I have a feeling that a lot of these [debanking] stories, there may be truth in some of these stories, but a lot of these stories are, are not the complete set of facts as, as we know. You know, banks have a big regulatory burden in reporting to the government and knowing their customer and calling attention to certain kinds of irregularities, potential money laundering or terrorist financing or so forth.
“And they have to pay big penalties if they don’t comply with these things. And some of these things are circumstances where there’s been activity that puts the bank at risk and the bank responds but they’re not allowed under law to disclose what the basis of their action was.”
Rather than a patchwork of 50 states looking at these concerns from a different lens, Barr said:
“This requires someone to look at it and decide what’s a proportionate response, without going overboard and again, as I say, I think that has to be the federal government when we’re talking about national banks. Because we can’t have, you know, 50 separate investigations of these things. I think…we’re all outraged at the idea of innocent people being de-banked but let’s get the facts and have a proportionate response to it.”
“I think the response ultimately is not going to be state legislation, uh, but a federal rule and a federal mechanism to ensure that doesn’t happen. And I think banks are already being much more careful about this kind of thing.”
Barr concluded with advice for legislators at the state and federal level:
“Our system functions best for free people when everyone’s playing their position and sticking true to the values that are supposed to govern that institution. And so, we should be trying to keep politics out of business…we have to be careful not to sacrifice the principle in the first place and make it clear what we’re talking about. We’re not fighting fire with fire. We’re not giving them the taste of their own medicine and so forth. We’re trying to restore the integrity of what business operations should be.”
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