Pyrrhic Victory On Credit Cards
We're going to get a credit card reform bill passing the Senate today, and the House will pick it up and pass it as well, even with the amendment allowing licensed gun owners to carry a concealed weapon in national parks. After a series of victories, the bank lobby could not hold back the tide on this issue, sparked by consumer anger.
The Senate on Tuesday is expected to pass the Credit Cardholders’ Bill of Rights, which would outlaw retroactive rate hikes and some penalty fees and give consumers more notice of rate changes and more time to pay their bills.
Similar legislation passed the House two weeks ago on a lopsided 357-70 vote. And President Barack Obama wants Congress to get a final version to his desk by Friday [...]
So, while praying for an eleventh-hour glitch (which can happen in the Senate), the once-dominant bank lobbyists are bracing for passage of the first credit card reform bill in history.
“We just have to be OK with people getting their pound of flesh out of us,” said one weary industry insider.
Now, as much as the banksters poormouth this, I wouldn't get crazy. The Fed already mandated most of these changes; the bill just codifies them into law. The lobbyists probably figure it's good to let the President win one for a change, especially one as inoffensive as credit card reform that would have taken effect anyway. On the big issues, like regulating derivatives (which the Treasury Department is pretending to do) and CEO compensation (which Geithner has no plans to touch), the banksters still own the place, and their millions of dollars in lobbying has most certainly paid off.
Meanwhile, here's the credit card industry's counter-move:
Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.
Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.
“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”
The more things change...
UPDATE: The bill passes 90-5.