They Own Us: Senate preserves unlimited card rates

[marmar]

via MichaelMoore.com



May 20th, 2010 4:24 PM

Senate preserves unlimited card rates
Delaware banking law avoids being undercut by consumer protections

Delaware Online


WASHINGTON -- As the U.S. Senate debate on sweeping financial industry reforms stretches on, Delaware officials learned Wednesday evening they can exhale once again.

A provision that targeted the very heart of a banking law that lured major credit card companies -- and tens of thousands of jobs -- to Delaware 20 years ago was rejected 60-35.

The amendment to the financial reform bill would have allowed all 50 states to impose individual interest rate caps on out-of-state lenders -- meaning card companies would not be able to use one national rate set in the state where they are chartered.

States such as Delaware and South Dakota attracted credit card firms in droves 20 years ago when they removed credit card interest rate caps, allowing banks such as JPMorgan Chase, Bank of America and Discover to establish state charters and charge rates of their own choosing nationwide.

If the proposal by Sen. Sheldon Whitehouse, D-R.I., had been enacted, it would have "significantly" constrained the Delaware credit card industry's "ability to export interest rates from Delaware to some other state, and that would put Delaware at a competitive disadvantage," said Delaware Secretary of State Jeffrey Bullock.

Before the vote, Sen. Tom Carper, D-Del., said the amendment posed a "real and palpable" economic threat to the state. It also would have been "the wrong thing to do" because it would have undermined the banks' ability to price according to risk, he said. Carper and Sen. Ted Kaufman, also a Democrat, opposed the measure. .........(more)

The complete piece is at: http://www.michaelmoore.com/words/latest-news/senate-preserves-unlimited-card-rates

[RandomThoughts]

1. They don't own me. n/t

[SoCalNative]

2. Or me

[readmoreoften]

10. Yet.

[customerserviceguy]

3. Interest rates are about to take a jump

The euro zone crisis is going to slow that down, but recovery or not, rates are bound to go up.

Even Congress knows that, they don't want to offend their corporate masters, not when they need campaign bucks for this fall.

[Bryn]

4. I thought it was already passed that CC couldn't raise interest rates

while ago. I am not understanding this. What happened? Even Kerry supported this! Barbara Boxer voted against it. Blanche Lincoln, of course, voted for this as always for the Corporation.

[Wednesdays]

6. IIRC, the new law is the lender must notify you in advance of any increase

The bad news is, there's no limit to the increase...or, at best, it's a very high ceiling.

[Webster Green]

5. I've never had a credit card, and never will have one.

I use a couple of debit cards or cash, except for the occasional chicken barter, of course.

[Phoebe Loosinhouse]

7. Yes we know, many of you are too wise to ever need/use credit cards

And you always pay the balance in full every month and fly around the world for free on your frequent flyer miles and put in the bank for mad money all the interest you didn't pay to fund your grandkids education and buy third world goats for Christmas gifts.

We get it! You're smart and everyone else is just dumb.

Perhaps some of the poor dumb idiots HAD to use their cards to tide them over in times of illness and/or job loss and would like some protection from becoming carrion for the usurous, predatory banking industry.

[TheMadMonk]

8. Yes, some poor bastards get themselves caught up in CC debt, through...

...circumstances entirely beyond their control. Medical emergency, kid in jail overseas, and so on.

However, a good many people DID end up where they are because they borrowed to the limit of their ability to pay. To the point where even a minor crisis, or moderate change in official rates, is enough to tip them over the edge.

Others got caught up in the "investment property" game. How many allowed themselves to be talked into borrowing above their means on the "promise" that by the time the honeymoon/sweetheart period expired, the property will have appreciated by enough to pay off the loan immediately and turn a very tidy profit?

How many dickheads buy into no deposit, 2 years interest free, and then screw up their repayment schedule so that they find themselves facing a 25%+ interest burden, calculated back to the begining of the agreement? To be fair how many more got caught by a $2 closing fee, assessed after the final repayment which just happened to prevent the closing of the account?

Greed ON BOTH SIDES is at fault.

[laughingliberal]

9. The moral equivalency thingie is old & tired

There's a hell of a difference between a consumer who went a little too far in debt and the predators in banking and finance who have bought our government and gotten laws passed making theft legal. Are we so far past Reagan that no one remembers there were once limits to what corporations were allowed to do? Does no one remember a time when 'bidness' wasn't almighty?

[Bluebear]

11. Thank you.

[1955doubledie]

13. Amen.

nt

[saracat]

12. +1000 K+R!

[TheMadMonk]

20. Nothing to do with moral equivalency. More to do with the old adage...

..."You can't cheat an honest person."

Don't get me wrong, I find what the banks (not to mention most of the rest of Wall St) do to be entirely reprehensible. However, it is unfortunately true, that one of the major reasons they have been so successful at ripping people off, is the sheer number of people who believe in "Free money now." and "Easy terms." later.

The banks don't simply bet on a certain percentage of desperate customers. They also bet that a very large percentage are too stupid to realise that instant gratification comes at twice the price later.

Virtually every single person I know with major financial problems is where they are not because of a shattering unforseen event, but because they chose to live a debt funded lifestyle. And a good many of them are/were of the type who would use times of low interest to expand their credit rather than pay down existing debt. The sort of idiot who banks on continued appreciation of investment assets, and even future promotions to keep their head above water.

There's also the idiots who make minimum repayments on their home loans (or even worse, borrow close to the absolute limit of their means) when interest rates are at historically low levels, then as rates rise back towards normal, bitch and moan about the lifestyle sacrifices they have to make to keep up with increasing repayments.

Desperate customers, driven into crippling debt by uncontrolable circumstances are not what the banks want. That's what bookiesinsurance companies are for. The customer the banks want is the one who is too stupid to be told he's stupid.

The sort of customer who buys The Abdominator, The Abswing, The Abcircle, and anything else with Ab in the name that promises a washboard tummy for no effort and a total time investment on a par with watching a feature film.

Dunno who said it, but it's most certainly true that "You can't legislate against stupidity." Virtually every "sucker" product offered by the banks: honeymoon rates; intrest free transfers of CC debt; interest free period; homeloan drawdown and/or offset facility, and so forth is a way for the smart customer to make out like a bandit. What the banks rely on is the sheer number of people who can be convinced to buy a "Handy dandy, dialamatic sponge sharpener"


You know you're doing well when the cubicle rat on the other end of the line tells you what a lousy customer you are, because you were damned if you were going to let a wrongly applied $1.76 interest charge ruin a five and a half year streak of accumulating reward points without having made a single interest payment.


People get caught because they don't use honeymoon periods to pay down as much principle as possible; because they pay off one card with another and then keep using the old card untill suddenly suprised (um why?) 6 or 12 months down the track by the first invoice for the new plastic that includes 6/12 months of back interest; because they don't clear their CC debt at the end of every month (or worse put cash on plastic); because they blythely take advantage of all the easy/convenient features that move money from their pockets to the bank's vaults, and fail to take advantage of those that gain no immediate benefit, and perhaps come at a small cost, but put tens or even hundreds of thousands in your pockets in the long run.


I make no argument against how thoroughly and painfully lenders can screw people when those people make mistakes. I note with little surprise that the degree of political collusion that has allows this to happen is proportional to the severity of the screwing. All I am saying is that one of the very first things the nasty predatory banks rely on, is the individual customer's desire for immediate gratification will make him his own worst enemy when it comes to accomplishing long term goals.

A few simple rules will take you a long way. First and foremost, NEVER BET WITH BORROWED MONEY. Know the diference between want and need. Figure out how to do it with cash and THEN how to make the bank pay for you not to. Never allow an interest free period to expire without clearing the debt in full. The only time to make a minimum payment is when you DON'T want to clear that last $1000 from a 3-10% (variable rate) loan with drawdown facility and 15 years left to run.

The difference between a $200,000 instant line of low interest credit and crippling debt can very easily be as little as forgoing a daily latte for the first 5 years of a thirty year loan.

[Spike from MN]

14. Here's the vote tally.

Wasn't even close. 35 yeas, 60 nays and 5 not voting. Yeah, having a huge Dem majority in the Senate sure pays off alright. For someone anyway. Just not us.

Grouped By Vote Position
YEAs ---35
Akaka (D-HI)
Begich (D-AK)
Bennet (D-CO)
Boxer (D-CA)
Brown (D-OH)
Burris (D-IL)
Cardin (D-MD)
Casey (D-PA)
Cochran (R-MS)
Dorgan (D-ND)
Durbin (D-IL)
Feingold (D-WI)
Feinstein (D-CA)
Franken (D-MN)
Gillibrand (D-NY)
Harkin (D-IA)
Lautenberg (D-NJ)
LeMieux (R-FL)
Leahy (D-VT)
Levin (D-MI)
McCaskill (D-MO)
Merkley (D-OR)
Mikulski (D-MD)
Nelson (D-FL)
Reed (D-RI)
Reid (D-NV)
Rockefeller (D-WV)
Sanders (I-VT)
Schumer (D-NY)
Stabenow (D-MI)
Udall (D-CO)
Udall (D-NM)
Webb (D-VA)
Whitehouse (D-RI)
Wyden (D-OR)

NAYs ---60
Alexander (R-TN)
Barrasso (R-WY)
Baucus (D-MT)
Bayh (D-IN)
Bennett (R-UT)
Bingaman (D-NM)
Bond (R-MO)
Brown (R-MA)
Brownback (R-KS)
Bunning (R-KY)
Burr (R-NC)
Cantwell (D-WA)
Carper (D-DE)
Chambliss (R-GA)
Coburn (R-OK)
Collins (R-ME)
Conrad (D-ND)
Corker (R-TN)
Cornyn (R-TX)
Crapo (R-ID)
DeMint (R-SC)
Dodd (D-CT)
Ensign (R-NV)
Enzi (R-WY)
Graham (R-SC)
Grassley (R-IA)
Gregg (R-NH)
Hagan (D-NC)
Hatch (R-UT)
Hutchison (R-TX)
Inhofe (R-OK)
Inouye (D-HI)
Isakson (R-GA)
Johanns (R-NE)
Johnson (D-SD)
Kaufman (D-DE)
Kerry (D-MA)
Klobuchar (D-MN)
Kohl (D-WI)
Kyl (R-AZ)
Landrieu (D-LA)
Lincoln (D-AR)
Lugar (R-IN)
McCain (R-AZ)
McConnell (R-KY)
Murkowski (R-AK)
Murray (D-WA)
Nelson (D-NE)
Pryor (D-AR)
Risch (R-ID)
Roberts (R-KS)
Sessions (R-AL)
Shaheen (D-NH)
Shelby (R-AL)
Snowe (R-ME)
Tester (D-MT)
Thune (R-SD)
Vitter (R-LA)
Voinovich (R-OH)
Wicker (R-MS)

Not Voting - 5
Byrd (D-WV)
Lieberman (ID-CT)
Menendez (D-NJ)
Specter (D-PA)
Warner (D-VA)

Taken from http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=2&vote=00159

[Phoebe Loosinhouse]

15. And there are my two guys - very predictable

Webb voting yes - I'm loving him for the most part

Empty suit Warner missing in action

[Greyskye]

16. Kerry? Really? How disappointing.

The whole vote is disappointing, but for Kerry to vote against it as well? Sigh.

[bvar22]

18. Whats Up with John Kerry?

Sure has been voting with the Republicans a lot lately.
I'm used to seeing him voting with the Good Guys.
.
.
.
:shrug:

[MisterP]

19. but the yeas were almost all Dems! that proves the loyalists' point!

what we need is less criticism and more votes and money!
:crazy:

[blindpig]

17. It's all getting so brazen it makes my head spin.

Democracy? Is that some kind of joke?

Politics by other means, the Greeks know what to do.

[amborin]

21. K&R