Published by WallStreetWeather.net
As JPMorgan Chase (JPM) Chairman and CEO Jamie Dimon recently wrote in The Wall Street Journal (“A Unified Bank Regulator Is a Good Start”), “the gulf that grew between Wall Street and Main Street has hurt everyone.” That’s because regulators never chose to make the connection that having strong consumer protections would not only help consumers, but also protect banks from losing money due to their “innovation.”
The Obama administration’s proposal to create a Consumer Financial Protection Agency (CFPA) to regulate consumer financial products is a major component of its plan for financial regulatory reform. Big banks from JPMorgan Chase to thousands of regional and community banks are lobbying to defeat the plan as it makes its way through Congress.
Saturn symbolizes regulatory structures, the past, and the status quo. Saturn’s sojourn in Virgo represents the need to clean up the mess after the balloons burst at the credit party when Saturn in Leo completed its cycle opposing Neptune in Aquarius in late June 2007. From November 2008 through April 2010, Saturn in Virgo is opposing Uranus in Pisces. Both of these energies signal a major cleansing that must take place, as the failures of the past must be allowed to dissolve to make way for a new regulatory structure that serves the interests of everyone. Like Jamie Dimon’s op-ed, these energies also mean that those in authoritative positions will attempt to create the illusion they are for reform (at least in the areas that would benefit their business), while actively lobbying behind the scenes against any attempts at meaningful overall reform.
Pisces and its planetary ruler Neptune relate to addictions and credit. With the USA’s natal Mars in Gemini challenging the USA Neptune in Virgo, the banks would like nothing better than to keep Americans actively using credit to support the banks addiction to the interest and associated fees the cards generate. Lenders collected a record $18.1 billion in credit card penalty fees, a 69% increase from 2003, when Uranus entered Pisces. Banks keep raising fees and interest rates on cards to offset rising borrower defaults. According to Fitch Ratings, losses on U.S. credit cards hit a record 10.44% in June.
Gemini and Virgo are ruled by Mercury which is located in the area of the USA chart representing debt. With the USA Mercury in Cancer opposing Pluto, the planetary ruler of debt located in the area of the USA chart representing banking and finance, the voices of consumers have been overwhelmed by the money and power of the financial industry.
As the largest credit card issuer in the USA with card services comprising 23% of its managed net revenue by line of business,* JPMorgan Chase has a vested interest in mitigating any damages that the CFPA could impose on their fee and penalty generation. With his Sun in Pisces exactly opposing the USA Neptune in Virgo, it is unbecoming that Jamie Dimon will often speak of “doing the right thing,” yet this superstar of finance earns revenue by entrapping customers in products they don’t stand an even chance of escaping.
In essence the banks are running their own type of Ponzi scheme. After a bank collects an outrageous rate of interest and fees, Joe defaults. Now the bank will need to acquire Jane as a new customer to pay for Joe's loss, and so on. It was easy to attract new customers as home prices continued to rise, but the scheme unraveled in the post-bubble era of rising unemployment. (Saturn in Virgo represents contraction in the workforce.)
Saturn in Virgo represents government enacting regulations that particularly benefit what politicians like to refer to as “working class Americans.” Saturn in Virgo will transit the USA Mars and Neptune in August before forming a third opposition to Uranus in mid September. The House Financial Services Committee wants to complete work on the bill to establish the CFPA by the end of July to go to the Senate in September. House Financial Services Chairman Barney Frank told The New York Times: “Anyone who thinks we’re not going to create this agency is mistaken. The American public wants it.” After all the bad blood created by bank bailouts, does the usually politically astute Jamie Dimon and other financial institutions want to create a public relations nightmare for themselves by going against the tide of consumer sentiment? With Saturn opposing Dimon’s natal Sun in late August, this is not a good time for the JPM chief executive to actively oppose the government.
The Times writes that “Administration officials said the proposal would create a ‘level playing field’ and provide the same regulation for particular consumer products regardless of what kind of financial institution was selling them.” (Bolded emphasis mine.)
On October 29, Saturn will move into Libra, the sign symbolized by equally balanced scales representing fairness. Saturn rules foundations, and as Michael Barr, assistant Treasury secretary for financial institutions, told the Times: “The agency will be able to get to the root of the mortgage crisis that we saw in the past. It will be able to go in to examine, supervise the operations of previously unregulated parts of the sector.”
Pluto rules death and all types of debt. What good is a mortgage (mort=dead/gage =pledge) with an interest rate so high the homeowner cannot pay it and the home ends up in foreclosure? It hurts both borrower and lender. Saturn represents karma, the law of cause and effect. The cycle of Saturn in Libra challenging Pluto in Saturn-ruled Capricorn beginning in mid November will bring further lessons to financial institutions who beyond receiving government assistance, have a societal obligation to correct the damage they have done. Saturn conjoining the USA chart’s Midheaven (Obama Administration) and Saturn and Pluto challenging the USA Venus (banking and finance) over the next year will bring greater regulation to the financial industry, forcing profits to come from a return to more conventional or conservative banking. The Pluto in Sagittarius (1995-2008) era of laissez-faire finance is finished.
If as Dimon writes, banks are to “re-earn the trust of the American people,” then JPMorgan Chase and all the other financial institutions opposing the creation of the CFPA should “do the right thing” now and stop increasing rates and fees in order to squeeze as much short term profit while they can before the CARD legislation takes effect in February. Decimating the banks retail customers is never a way to generate long term profitability for the institutions, as recent history has aptly demonstrated. In reality, the Consumer Financial Protection Agency will save banks from themselves.
*Following JPM’s acquisition of WaMu. Source: Jamie Dimon Letter to Shareholders, 2008 JPM Annual Report.