As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Friday, May 01, 2009

Next Up, Banks Get To Torpedo Credit Card Reform

On a day that the banksters stopped cramdown in the Senate, the House bucked the trend, passing the Credit Cardholder's Bill of Rights by a wide, bipartisan margin.

In 2008, credit card issuers imposed $19 billion in penalty fees on families with credit cards and this year, card companies will break all records for late fees, over-limit charges, and other penalties, pulling in more than $20.5 billion. Credit-card debt in the U.S. has reached a record high of nearly $1 trillion — and almost half of American families currently carry a balance, and for those families the average balance was $7,300. One-fifth of those carrying credit-card debt pay an interest rate above 20 percent [...]

The Credit Cardholders’ Bill of Rights Act passed today levels the playing field between card issuers and cardholders by applying common-sense regulations that would ban retroactive interest rate hikes on existing balances, double-cycle billing, and due-date gimmicks. It would also increase the advance notice of impending rate hikes, giving cardholders the information they need and rights to make decisions about their financial lives. Our economic recovery depends on a shared prosperity — and we must put an end to these abusive practices that continue to drive so many Americans deeper and deeper into debt.

I'm glad this ends double-cycle billing, where cardholders pay interest on debt that they've already paid off, and forces credit card companies to allocate payment to the debt with the highest interest rate. But overall, these are very modest protections that simply prohibit the credit card companies from ripping off the American people. And 105 Republicans agreed yesterday.

(Among those who didn't: David Dreier, Michelle Bachmann, John Boehner, Eric Cantor, Tom McClintock, Paul Ryan.)

Of course, as Dick Durbin noted yesterday, the bankers who own the Senate will return to try and ditch this bill. They've killed the same legislation before, and Harry Reid didn't exactly sound confident this time around:

Reid said the Senate next week will take up the credit card reform bill, which would restrict companies’ ability to raise rates on balances. Asked if he had 60 votes, the majority leader said, “We’ll find out.”

Heaven forbid the Senate Majority Leader actually lift a finger to get the votes.

This will be a test of leadership, but will probably end as a test to the limits of bankster ownership.

...check out the juicy rationalizations from Democrats who sold out their constituents facing foreclosure.

...By the way, cramdown was only a part of the bankruptcy bill passed by Congress yesterday. Included in this bill, which was supposed to aid foreclosure victims?

The defeat clears the way for a final vote as early as Friday for the legislation, which has several features that the banking industry has sought. One provision would have the effect of reducing a proposed special premium the banks would owe the Federal Deposit Insurance Corporation later that year by more than 50 percent — a $7.7 billion saving. A second provision would make permanent the temporary increase in deposits guaranteed by the F.D.I.C., to $250,000, from $100,000.

That's right, their insurance will increase permanently (I actually agree with that part), and the premiums to the FDIC would LOWER. My insurance company has never told me they'd lower my premiums and increase my insurance. I don't have a lobbyist, however.

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