Credit Card Bill - What Got Left Out

Delay In Bill Could Add Up To More Money For Credit Card Issuers

(CBS)  Written by CBS News investigative producer Laura Strickler

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The credit card bill approved by the Senate today is expected to land on the President’s desk before Memorial Day. When he signs the bill, President Obama and the chairman of the Senate Banking Committee, Chris Dodd, D-Conn., will hail the bill’s passage as a victory for consumers. But they will likely neglect to mention the items the credit card industry successfully kept out of the bill.

Mr. Obama and Dodd are also unlikely to note how much money their respective campaigns received in 2008 from the finance/credit card industry. For Mr. Obama, it was $410,116 and for Dodd it was $209,100, according to The Center for Responsive Politics.

Credit card companies killed two proposals to impose caps of 15 percent and 36 percent annual percentage rate (APR) on credit cards and other loans. An industry lobbyist told CBS News that that’s because in many cases credit card issuers are already charging more than 36 percent -- if you add up the charges for things like late payments, insufficient funds, annual fees and cash advances. The industry says they could not survive if they were limited to 36 percent APR.

In a letter the American Financial Services Association urged all U.S. senators to oppose all rate caps and so far they have been successful.

Sen. Charles Grassley, R-Iowa, was the only Republican senator to vote last week for the rate cap amendment that would have set the cap at 15 percent. Even though the amendment failed, it was barely 9:00 a.m. the next morning before his staff got a call from a credit card lobbyist wanting to know why Grassley voted for the cap. He told CBS News that he voted along with 32 Democrats because he is against "usury,” the practice of lending of money at exorbitant interest rates.

So far the credit card industry has also succeeded in delaying the implementation of any regulatory changes for nine months in the Senate version or a year in the House version. Earlier versions of the bill had only a 90-day delay.

Bill Himpler, a lobbyist for the American Financial Services Association says the industry needs the time to implement the changes. "This is not like going to Comp USA and pulling software off the shelf and flipping a switch - all of our member companies computer systems need to be configured," Himpler told CBS News

"It’s incredible that their software only works in one direction and can’t be reversed," said Kathleen Day, spokesman for the Center for Responsible Lending, "I say that facetiously, because of course, that’s ridiculous," she said.

Critics like Day say this delay can mean more money for the credit card industry. Other critics note that an extra nine months gives the industry time to raise and lock in higher interest rates. When asked for a response, Himpler replied: "To our critics? You know, I’m not going to say anything."

Sen. Dick Durbin, D-Ill., recently told a local Chicago radio station that in his opinion the banking industry "frankly owns the place."

Sen. Bernie Sanders, D-Vt., offered some evidence to back that up in a recent floor speech. He cited a recent report from the Consumer Education Foundation that said the financial services lobby spent $5.1 billion on campaign contributions and lobbying in past decade. He also notes that they have five lobbyists for every member of Congress.

[jetranger7]

"URGENT - NOTICE" ~ Stay away from all Major Credit Cards- NEVER use any of them,, don't ever apply for one ever ~ !!! These Credit Card companies are out to RIP YOU Off by any means possible, and can and will change the contract at any time at their convience, with very little notification to you,,, essentially in the Looongg Ruunnn,, your going to get screwed majorly and,, your helping them to screw you by having any of their credit cards !! NO- THANKS,, don't need any of those Phony- Fraudualent - Deceptive cards ever ~ !

[Dgunner]

Here is a though. Live within your means and quit putting yourself into the bracket of the stupid masses who want to appear to have make and spend money they don't have or haven't earned at the time they spend. In america it has become normal behaviour to drive to the grocery store in a new mercedes or a automobile that thepayment on exceeds two to three weeks of your earnings just to buy a can of pork and beans and crackers to eat in your home with curtains drawn so the world can't see how a educated professional or a hard working blue collar cititens reveal thier stupidty.SYMPATHY CAN BE FOUND IN THE DICTIONARY BETWEEN SH---T AND SYPHILISS BUT NOT HERE.

[enriquecaliente]

http://www.pbs.org/wgbh/pages/frontline/shows/credit/view/

[feddupp]

Consumers, BEWARE!!! Every time the government does something for our "benefit," it ends up biting us YOU-KNOW-WHERE!!

When they RAISED the minimum payment percentage (so that we wouldn't take 100 years to pay off a balance), all it did was make those of us who could only PAY the MINIMUM have a HIGHER amount to pay each month!

I don't have high credit card balances because I have spent wildly on caviar and truffles.
I have them because I have spent wildly on GASOLINE, GROCERIES and monthly BILLS, such as electricity, phone, etc.!!

If you REALLY want to help us, Senators, Reps, etc.--then BAIL US OUT!! Give us HARD-WORKING AMERICAN people some $$$$$$$$!!

I know--it's not LEGAL to give $$ to everyday American workers! HAHAHAHAHAHA!

[primapatria]

And go broke because there is no accumulation of wealth. leasing is a stupid idea. It is the car companies idea of how to make you a life long customer with nothing to show at the end of your life
Posted by mrcrosbyll at 7:25 PM : May 19, 2009
*****
2 fallacies in this argument ... number 1 you don't build wealth with an asset that depreciates to zero (if you've ever tried to sell/trade a ten-year old car you won't dispute this point - take your $500 and run!); 2 - If you resist the temptation to upcharge - e.g. lease a car at the same price point you could have tolerated buying a car (e.g. don't lease the Mercedes when you could only buy the Honda) - then you could take the cash differential between the lower lease payment and purchase and save it to gain from the interest. Of course you have to be smarter than a fifth grader, not fall victim to your own excessive desires, and not be ready to blame your stupidity on someone elses greed. Three traits our society seems to be losing in this entitlement crazy, no personal responsibility, blame it on everyone else environment we find ourselves in.

[mypatch]

I just cut up all my credit cards and will not charge on them again. The law they just passed stinks. It won't do anything to protect us from higher interest rates or fees. I don't need credit if it puts me in bondage to the wealthy. I can live on what I earn. We should all boycott these credit card companies then they may sit up and take notice.

[rhs648]

I read study recently that found that only 15% of "luxury car" owners had :luxury" incomes.

So, 85% of luxury care drivers really can't afford what they're driving.


#1 choice among millionaires? - Ford.
Posted by formrusmcsgt

Leasing makes it easier to look wealthy. Small downpayment, reasonable monthly payment, and no equity at the end of the lease period. That way, you can fool your neighbors and friends into believing that you can afford an expensive car.

[formrusmcsgt]

I must take my leave.

Thanks, all.

As always, a pleasure.

[formrusmcsgt]

Amen. I for one am more impressed with having a nice sized bank account than I would be driving a POS beamer plus, I sleep well at night. Hell, I am even able to slip in a nice afternoon nap occastionally
Posted by mrcrosbyll at 6:00 PM : May 19, 2009

As I am proud to say, I can afford custom, but drive stock.....

[formrusmcsgt]

If they are your real friends, they will like you whether you drive a beamer or a yugo
Posted by mrcrosbyll at 5:41 PM : May 19, 2009

I personally view this "need to impress" as a sign of insecurity.

If you need to impress them with how much debt you've taken on, you don't have much going for you in the first place....

[formrusmcsgt]

Best advice I can give is start being concerned with personal happiness and stop worrying about what your friends think. If they are your real friends, they will like you whether you drive a beamer or a yugo
Posted by mrcrosbyll at 5:41 PM : May 19, 2009


A voice of reason in the darkness....

Look at what I've been accused of here for saying the same...

[formrusmcsgt]

I really have been forced to realize from the posts on these two "credit card" boards how ignorant so many are about money.

I read all kinds of excuses for being irresponsible with one's money.

"I lost my job" being the most common. So what? You thought you could never lose a job or what? Why didn't you restrain yourself from buying everything that's advertised and show some discipline by saving in case you lose a job?

I know, you "deserve" the vacations and new cars you bought, right? (even though you couldn't realy afford them?)

Trying to look rich keeps a lot of folks poor....

Sheesh.

[formrusmcsgt]

I still see what is wrong and I don't condemn another because they don't live the life I do.
Posted by clancy49 at 5:09 PM : May 19, 2009

Then feel free to pander to the insatiably materialistic.

Knock yourself out.

[armandbeni]

"The industry says they could not survive if they were limited to 36 % APR. " If this

[clancy49]

formrusmcsgt===Well young kid, I am 60 and drive an eleven year old car that is paid for. My car gets 25 to 30 mpg in the city and 36 to 40 on the highway. Does yours? I'm not really in any real financial problem and I pay my bills, even save a little. I still see what is wrong and I don't condemn another because they don't live the life I do. I understand that usury should be illegal and just because you can do something doesn't make it right. There are major economic problems that do affect all of us.

[formrusmcsgt]

formrusmcsgt= and because you have some money you think belongs to you usury is okay? Usury practice and obscene profits are perfectly acceptable?

Posted by clancy49 at 5:04 PM : May 19, 2009

Show me where I said as much. Otherwise, keep your words in your own mouth.

[clancy49]

formrusmcsgt= and because you have some money you think belongs to you usury is okay? Usury practice and obscene profits are perfectly acceptable? Well here is a fact, all that money you think you have isn't going to be worth anything except to burn to keep warm. If this usury practice continues unchecked the economy of the world will collapse. There will be a new monetary system and your money will have as much value as confederate script did in 1865. This does concern you and the little money you have nested. Usury hurts everyone including you. Obscene profiteering hurts everyone including you. Left unchecked the inflation will skyrocket until everything explodes including your precious nest. You will have to pay more and more for everything until your little nest is gone or useless. Wake up and stop drinking the burundanda.

[formrusmcsgt]

The banks start you off on a loan you can afford and then the up the interest, fees, and charges until you are bankrupt and you don't see that as a problem? Don't use credit cards? You better remain young - healthy- and employed to continue in your fantasy world.
Posted by clancy49 at 4:54 PM : May 19, 2009

Pesonaly, I'm 56.

I owe only my mortgage.

As I don't have half my future income already spent as most of you do, I have accident insurance, disability insurance, medical insurance, life insurance, and Mortgage Protection insurance and can still bank a good chunk at the end of the week.

I drive a 9 year -old Silverado which still looks new, and my wife drives a 10 year-old Explorer in great condidion as well.

I'm sure some shke their heads at our older and long-paid off vehicles, but I could care less.

I'll retire in 3 years, at 59, without a need for Social Security, and they'll be humping until they are 70.

Who wins?

[formrusmcsgt]

Why narrow minded people like you refuse to see what is happening is beyond me.
Posted by clancy49 at 4:43 PM : May 19, 2009

Fact is, I see EXACTLY what's going on, that's why I'm one who owes in life.

Only a fool is going to pay someone 10%,15%, 25%, because he was an idiot and saved no money whatsoever, but sprent every dime he makes and then wants to spend more as well.....

Stupid is as stupid does.

[clancy49]

derekeddy = that means you are 30 young and healthy with a good job. Good for you. Can you honestly agree that usury should be legal? Do you agree that simply because banks can charge outrageous interest, fees, and charges they should? Do you know that credit card companies actually target the people that are hurting with health issues, lower incomes, and high mortgages? Is that all right, just because they can? Should credit card companies wiggle a carrot in front of someone because they can without restrictions? Average car prices have gone up from 3,000 to 26,000 in two decades. Our incomes have gone down from an average of 39,900 to 36,900 in those same two decades and you still don't see a problem? Health care has gone up from 65,000 for a week in a hospital to 385,000 for a week in a hospital and you don't see a problem? A denture has gone up from 179 to 686 and you don't see a problem? You still blame it on a few living beyond their means? The banks start you off on a loan you can afford and then the up the interest, fees, and charges until you are bankrupt and you don't see that as a problem? Don't use credit cards? You better remain young - healthy- and employed to continue in your fantasy world.