This Week: The Senate vs. the Credit Card Companies
We all know how this battle has played out in the past. Indeed, though the House easily passed a credit card reform bill in 2008 and again this year, Senate Democrats didn’t move their version anywhere last year, and it barely got out of the Banking Committee in March.
Things could be different this time around. Despite a month-long delay, the upper chamber will begin consideration of its bill today. Sen. Chris Dodd (D-Conn.), the sponsor of the proposal who’s been in negotiations with Sen. Richard Shelby (R-Ala.) over a compromise, said Monday that a deal was struck over the weekend.
Two questions come readily to mind: (1) To what extent did Dodd have to water down the consumer protections to get Shelby on board, and (2) Will it be enough to get 60 senators on board?
In a statement, Dodd said he anticipates a tough fight on the floor:
While I expect some battles in the coming days from credit card companies and their allies in an effort to diminish these strict new rules, I stand ready to fight against any attempt to weaken the strong consumer protections in this bill.
The debate is a timely one. The New York Times reported today that the banks are already bracing for potentially enormous losses in the credit card sector, as more and more borrowers struggle to pay their bills amid rising unemployment.
The banks are certain to push the case that Congress shouldn’t be doing anything further to hurt their bottom lines — even in the name of consumer protection. We’re about to find out where the Senate’s loyalties lie.