Amidst the bigger economic news on Wall St. and Washington this week, the efforts from the House to put in a “Credit Cardholders Bill of Rights” has gotten minimal attention — except, of course, from the White House, where if it says “Bill of Rights” it’s gotta be a pro-terrorist plot.
The White House said on Monday it opposes legislation called “the Credit Cardholders’ Bill of Rights” that would curb unfair and deceptive credit card practices, saying it would constrain banks’ ability to price risk.
Because, of course, banks have shown such a great ability to price risk to date. And because, of course, credit card costs are already so artificially low.
The White House said in a statement the bill would lead to less access to credit and higher interest rates for consumers.
Well, arguably reducing the credit extended to consumers isn’t all that bad an idea, given the amount of credit that has been over-extended to consumers that can’t pay for it.
“For the credit market to operate efficiently, creditors must have the flexibility to react to changes in customer risk and market conditions,” the White House said.
By asking for a bail-out.
The provision “would restrict when lenders may change terms of the credit agreement, significantly constraining the ability of financial institutions to adapt to changing credit risks and market conditions,” the White House said.
… and to sneak in extra language guaranteed to improve their revenue streams.
The legislation is in the House of Representatives. The full House is expected to pass the bill, but similar legislation is not expected to progress in the Senate due to preoccupation with the financial crisis and U.S. presidential election.
The bill, chiefly sponsored by New York Democrat Carolyn Maloney, is similar to proposed regulations the Federal Reserve is reviewing and expected to finalize later this year.
But we can’t allow a Democrat get credit for it.
Banks, reeling from the collapse of the U.S. housing and subprime mortgage markets and subsequent credit crisis, oppose the bill, which could limit their credit card revenue.
That this remains their soul reliable source of income indicate to me that it’s probably being exploited by them.
The bill would end double-cycle billing, in which card companies reach back to prior billing cycles to help calculate the interest charged in the current cycle.
But — but — that will restrict their ability to unexpectedly overcharge!
It also seeks to give cardholders more time to pay by forcing card companies to mail bills 25 days before the due date instead of the current 14 days.
Note that the banks almost certainly have “Net 30” agreements with their business partners.
The White House said it was concerned about unfair and deceptive practices and supports efforts to protect consumers, …
Of course they are.
… but added that regulations are better suited to address the issues instead of legislation.
“Because we control the regulations, and can change them whenever we want. Nyah!”