rssSenate Panel Approves Credit Card Reform, Minus One Democrat
Tuesday, March 31, 2009 at 4:44 pm
- 10 Comments
The Senate Banking Committee today approved legislation forcing banks to make credit cards more consumer friendly, but don’t mistake this for a strictly partisan issue. While it’s true that most Democrats support the legislation and most Republicans oppose it (the panel vote was 12-11), there are regional nuances in this debate as well.
Take Sen. Tim Johnson. The South Dakotan was the lone Democrat on the banking panel to vote against the bill.
The reason? Well, officially, Johnson said the bill “goes too far in prohibiting lenders from adjusting prices to account for increased risk.” (Among other things, the bill requires companies to give 45 days notice when raising interest rates and prohibits issuers from applying rate increases to existing balances — the types of things that would prevent rates from jumping 20 or 30 percent overnight because of a single late payment.)
Yet South Dakota also happens to be a hub for some of the largest credit card operations in the country, including Citibank. Johnson is clearly protecting the regional industry here, and his opposition to the bill forecasts a tough fight ahead for reform supporters. Indeed, Delaware — another center of credit card activity — is home to Sen. Tom Carper, another Democrat with a history of protecting the industry.
As the stalled cramdown bill has shown, the finance industry has plenty of influence even when the issues aren’t regional. With two Senate Democrats already defending the industry over consumers, the race to 60 is sure to be close.
10 Comments
Comment posted March 31, 2009 @ 2:30 pm
what a load of crap. who does johnson stand for, the people of his state or his paymasters? the only reason johnson has shitty bank credit card processing in his state is because new jerk would not let them charge loan shark rates 25 years ago………..so they left for the wide open spaces and rates ! i say send the whole thing to bangawhore and be done with it !
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Comment posted April 15, 2009 @ 9:19 pm
Credit cards are a fantastic tool for most people when they are:
a) Used with though
b) The companies do fluctuate their rates and rewards
When these two main ingredients change then the card can become a real hassle.
Comment posted April 22, 2009 @ 7:22 pm
If late payments or other creditor sins were the only reason that interest rates are increased, those increases might be tolerable. Unfortunately, rates have been raised on people who've never had a late payment, never exceeded their limits, in other words, have never screwed up. I literally can't imagine how anybody can believe that 29% interest rates are rational, much less ethical. With the interest calculation algorithms presently in use, the credit card companies must know that rates this high are the harbinger of defaults. How can more defaults be good for card issuers? And, who can think this a fair or honest way to do business, no matter what the fine print says?
Comment posted April 30, 2009 @ 5:41 am
You make a comment like this,but have no problem with higher taxes,to assist people that dont want to work.You want me to use my money for Green Tech,instead of using investor money.You want me to accept a lower standard of living,to pass health care and cap /trade that will make all of us poorer,with terrible health care.Liberals are strange animals.
Comment posted April 30, 2009 @ 12:41 pm
You make a comment like this,but have no problem with higher taxes,to assist people that dont want to work.You want me to use my money for Green Tech,instead of using investor money.You want me to accept a lower standard of living,to pass health care and cap /trade that will make all of us poorer,with terrible health care.Liberals are strange animals.
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